China to impose revamped coal tax in December

The new tax is expected to encourage a more efficient use of coal, which has been blamed for the nation’s severe air pollution troubles.

The Chinese government announced Monday a major overhaul of its current resource tax, adding that a new and simpler levy beginning Dec. 1.

The country’s Cabinet also said it would cancel a series of existing charges, including an environmental compensation levy, in a move aimed to help struggling coal producers.

“The implementation of coal resource tax reform … will not only be of benefit to resource-rich regions but will also promote coordinated regional development and the rational exploitation of resources,” the statement said, as translated by Reuters.

Two weeks ago China, the world’s biggest consumer of the fuel, announced it would ban imports of dirty coal, putting further pressure on the global coal market.

The country, which is vowing to lower its emissions relative to the size of its economy by as much as 45% by 2020, has already set up seven pilot markets in places such as Shanghai and Beijing as a trial before the national scheme is introduced.

Changes to the resource tax have long been part of China’s environmentally friendly agenda. They are expected to encourage a more efficient use of coal, which has been blamed for the nation’s severe air pollution troubles.

China’s dependence on coal is well known. Annual consumption exceeded 1 billion short tons per year in 1988 and has exploded since then, to about 4 billion tons last year. This means the Asian giant gets about 70% of its energy from the fossil fuel, a number the government hopes to reduce to 65% by 2017.

Creative Commons image by: Francisco Anzola