China Exempts New Energy Ships from Tax

China has announced that “new energy” cars and ships will be exempted from vehicle and vessel tax, reports China Daily.

Cars exemptions include pure electric commercial cars, plug-in hybrid vehicles and fuel-cell commercial cars. Vehicle and vessel tax will also be halved for users of energy-saving cars and ships, said a government Department of Finance statement. Specific details for shipping have not yet been made clear.

China became the largest global energy consumer in 2011, and the move is a bid to reduce energy consumption and air pollution.

According to the Natural Resources Defense Council, studies conducted in Hong Kong and Shenzhen demonstrate that shipping is a significant source of air pollution and health problems, particularly in port cities. In 2010, China saw an estimated 1.2 million premature deaths caused by ambient air pollution. One container ship cruising along the coast of China emits as much diesel pollution as 500,000 new Chinese trucks in a single day, says the council.

However, the energy sector is a major contributor to air pollution in China. As a result of high coal consumption, China is the world's leading energy-related CO2 emitter, releasing 8,106 million metric tons of CO2 in 2012. China's government plans to reduce carbon intensity (carbon emissions per unit of GDP) by 17 percent between 2010 and 2015 and energy intensity (energy use per unit of GDP) by 16 percent during the same period, according to the country's 12th Five-Year Plan (2011-15). 

Coal supplied the majority (nearly 66 percent) of China's total energy consumption in 2012. The second-largest source was petroleum and other liquids, accounting for nearly 20 percent of the country's total energy consumption. Although China has made an effort to diversify its energy supplies, hydroelectric sources (8 percent), natural gas (5 percent), nuclear power (nearly 1 percent) and other renewables (more than 1 percent) account for relatively small shares of China's energy consumption. 

The Chinese government plans to cap coal use to 62 percent of total primary energy consumption by 2020 in an effort to reduce heavy air pollution that has afflicted certain areas of the country in recent years. In the energy sector, the government is moving toward more market-based pricing schemes, energy efficiency and pollution-controlling measures.