China Announces Tax Exemption for New Energy Cars and Ships


Published Date : May 20, 2015

In a move to reduce over usage of energy China has announced new regulations for tax exemption for New Energy cars and ships, according to a report in China Daily. This new development is a step towards energy conservation and reducing pollution, as China was the world’s largest consumer of energy in 2011.

Among the cars that will be included in the list for tax exemption are plug-in hybrid vehicles, fuel-cell commercial cars, and pure electric cars. The Department of Finance has announced in a statement that there will be a reduction of vehicle and vessel tax by half for energy-saving cars and ships. The actual details with reference to shipping have not yet been declared.

China has been facing serious pollution issues and health hazards due to pollution caused by shipping specifically in port cities, according to research reports conducted in Shenzhen and Hong Kong by Natural Resources Defense Council. A single cruising container ship along the sea coast in China has the capability of emitting diesel pollutants equivalent to 500,000 new Chinese trucks in a day according to the Council. China has experienced 1.2 million premature deaths due to air pollution, in 2010. 

Another major contributor to air pollution in China is the energy sector and the high coal consumption has made China the world’s topmost CO2 emitter and is known for releasing 8,106 million metric tons of CO2 in 2012. In a bid to reduce carbon emissions the Chinese government plans to decrease carbon intensity by 17 % and carbon emissions by 16% during the period between 2010 and 2015 according to China’s Five-Year-Plan (2011-15). 

There are plans to limit coal use to 62 % of total energy use by 2020 to prevent air pollution levels increasing in some regions of the country. The government wants to implement energy conserving measures and pollution control and move towards market-based pricing schemes in the energy sector.