Incentives for Technical Reform of Energy Conservation raised by 20%(Financial News)

June 25, 2011

In order to accelerate promotion of advanced energy efficiency technologies and improve energy efficiency ratio, the Ministry of Finance and NDRC printed and issued Measures for Administration of Fiscal Incentives for Technical Reform of Energy Conservation (The Measures). Compared to 2007’s Provisional Measures for Administration of Fiscal Incentives for Technical Reform of Energy Conservation, the coverage of fiscal incentives expands and the level of incentives has risen by 20%.
　　
 The Measures defines the incentive winners shall be projects specialized in technical reform of energy efficiency for prior production process and equipment, and the incentive winners in the Provisional Measures are only projects related to coal-fired boiler (kiln) transformation, waste heat and waste pressure reclaim, petroleum saving and alternative products, energy efficiency of electrical motors and energy system optimization. The coverage of fiscal incentives has been extended from part of projects to all that are qualified.
　　
 In addition, the level of incentives has risen remarkably. The Measures specified that energy efficiency reform project in the East will be rewarded with lump-sum incentives equivalent to RMB240/ton of standard coal according to the annual saving capacity of as-built projects, and RMB300/ton of standard coal for those in the Middle West. In the original Provisional Measures, the standard quota of incentives for the East is RMB200/ton of standard coal, and RMB250/ton of standard coal for the Middle West.
　　
 The rigid index—saving capacity is also loosened. According to the Measures, all projects meeting the following requirement are entitled to incentives: approval, verification and registration as per applicable regulations; the reformer observing national industry policies with at least 3-year operation; the saving capacity equal to or exceeding 5000t of standard coal; pre-reform annual energy consumption of the owner exceeding 20,000t of standard coal; the project owner establishing complete energy measurement, assessment and management systems; saving capacity of project is detectable and verifiable. By contrast, the requirement on saving capacity in the Provisional Measures is 10,000t of standard coal only (provisional).