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China Raises Taxes On Oil & Gas

China announced a tax increase on oil and gas on Monday in an effort to spur investment in alternative fuels. It is unclear precisely how this will work, considering that China is a centrally-planned economy and companies can be ordered to use solar and wind, or invest in solar and wind, by the powers-that-be in Beijing.

China is the world’s leading producer of solar panels, but solar power is barely part of the national grid.

Despite alternative sources of power consisting of less than 10% of China’s energy matrix, the government has opted to raise the resource tax on oil and gas from 5% to 6% to force conservation. Coal taxes will range between 2% and 10%.

The change is the nation’s latest effort in pushing forward resource tax reforms after authorities announced on Saturday the new tax on coal that will be based on sales rather than production. All of these tax changes take effect on Dec 1.

China’s energy demand has turned it into the most polluted country in the world.

Last week, air quality was at one of its worst so far this year, pushing pollution to more than 20 times what the World Health Organization considers safe. Highways were closed in some cities. Beijing raised the city’s air quality alert system to orange. Only

A thick haze of smog has descended on parts of northern China, pushing pollution to more than 20 times what the World Health Organization considers a safe limit.

The heavy smog reduced visibility in some areas to such an extent Friday that highways were closed and residents were warned to stay indoors. Beijing authorities raised the city’s air pollution alert to orange, its second highest level.

Published on:
October 15, 2014
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