Environmental Protection Tax law of the People’s Republic of China (Draft for Comments)

Chinese government released Environmental Protection Tax law for public comment on June 10, 2015 up until to 9, July, 2015, as a result of its increasing awareness of the long lasting effects of pollution on the country’s environment. The law represents a joint effort between the Ministry of Finance, the State Administration of Taxation, and the Ministry of Environmental Protection “to protect and improve the environment, to encourage energy conservation and emissions reduction by the society, and to promote the construction of ecological civilization.” 

Environment Minister Chen Jining said, "The Chinese environment is reaching or has reached its limit." Ma Jun, director of the Beijing-based Institute of Public and Environmental Affairs, said it would motivate companies to embrace clean technology. “It’s an issue whether the levy could be charged accurately based on the pollutants generated. It will take time to observe whether the levy will be as negotiable as pollution discharge fees," Ma said.

The 2015 legislation specifically listed: atmospheric pollutants, water pollutants, solid wastes, construction site noise, industrial noise, and other pollutants. The proposed legislation also allows for localities to add more taxable pollutants or impose higher tax for specific conditions to safeguard the environmental concerns in the area. The proposed legislation specifically calls out enterprises, public institutions, and producers or operators that discharge taxable pollutants within the PRC.

Once the environmental tax been carried out, the most affected enterprises would be thermal power companies. According to the draft, (pollutant-discharging) taxpayers under priority monitoring shall refer to taxpayers engaging in heavily-polluting industries such as thermal power, iron and steel, cement, electrolytic aluminum, coal, metallurgy, construction materials, mining, chemical, petrochemical, pharmaceutical industry, light industry, textiles, leather-making, etc., and enterprises under priority monitoring that engage in other pollutant-discharging industries.

China receives limited spot LNG offers for August, September

Independent buyers in China said sellers have not been forthcoming with their offers in the past month, with many traders and portfolio suppliers turning their attention to the Middle East, India and Pakistan. They are keen to buy at least one cargo in July, but many sellers told us they are out of August cargoes and supply might be tight for September.

Based on relevant report, the Bids for August and September deliveries are at $8.20-8.40/MMBtu, but state-owned LNG buyers said they are only interested if the offer is lower than mid-$7.00s/MMBtu. “If the price is any higher than $7.50/MMBtu, it cuts into our margins and becomes uncompetitive. It negates the purpose of buying LNG imports,” a private gas distributor said.

Terminal access has been a major issue for many private buyers in China and sellers want to avoid physical risk on the cargo. While there is buying interest from China, a source close to Malaysia’s PETRONAS said sellers are currently not interested in concluding a spot deal unless the buyer can show firm documentation of terminal access.

On the other hand, many independent Chinese buyers are not actively scouring the market for spot cargoes, as they deem domestic supply more than sufficient in meeting their August and September requirements. Separately, independent buyer Beijing Gas Group on 2 July signed a $110m deal with France-headquartered utility Engie to purchase three LNG cargoes for this winter, but it is still looking for spot volumes during the shoulder season. The company foresees that its downstream markets would be to absorb any additional natural gas in August and September, a source close to Beijing Gas said.

SGCC Won the Bid for 2nd Phase of Brazil’s Belo Monte Hydropower UHV Transmission Project

In the morning of July 17, 2015 in Brazil (local time), SGCC independently took part in the bidding of the 2nd phase of ±800kV Belo Monte Hydropower UHV Transmission Project (hereinafter refers to as “Phase 2 of Belo Monte Project”) and successfully won a 30-year concession right, outrunning Eletrobras and Spanish firm Abengoa. It’s SGCC’s second UHV transmission project overseas. The first one was the 1st phase of the Belo Monte Project. The Phase 2 represents the SGCC’s first overseas EPC project, including investment, EPC and operation.

The Phase 2 is the delivery project of Brazil’s second largest hydropower station Belo Monte Project with an installed capacity of 11GW, which will construct a 2,518km-long ±800kV UHV DC transmission line, convertor stations at both ends, and other auxiliary projects with a capacity of 4GW. The project investment exceeds 2.2 billion dollars and the project is expected to put into operation in 2020 with the return on investment exceeding 14%.

In July 2014, Chinese President Xi Jinping and Brazilian President Rousseff presented in the signing ceremony of the cooperation agreement, and in May 2015, Chinese Prime Minister Li Keqiang and Brazilian President Rousseff unveiled the ground-breaking ceremony of Belo Monte Hydropower UHV Transmission, which has become a paradigm of international energy cooperation.

In May 2015, the State Council issued On the Guidance of Promoting International Capacity and Equipment Manufacturing Cooperation, which pointed out those Chinese equipment corporations, should focus on developing countries and take initiative in expanding the market of developed countries. SGCC’s successful bidding for the Phase 2 project this time will facilitate the “going out” of China’s UHV technology, equipment and EPC, improving international cooperation and mutual benefits.

World's largest solar cell maker invests in Yunnan

Trina Solar announced an agreement with Yunnan Electric Power Design Institute to supply solar cells capable of producing 51 megawatts of electricity in July. These panels will be the first instalment of a larger plan to populate some tea-growing areas in Xishuangbanna with photovoltaic generators. The proposed solar farm will eventually reach a capacity of 100 megawatts (MW), enough to power roughly 36,000 homes annually.

In the first stage of the multi-pronged project, Trina Solar will deliver approximately 43,000 TSM-255 modules and 154,000 TSM-260 versions. Extremely durable and designed to withstand exposure to pesticides and herbicides, the glass panels represent only half of the solar farm's eventual size. With each panel measuring one meter by 1.65 meters, the 190,000 panels eventually covering the farm will take up an area of 660,000 square meters.

Yunnan province is already home to some of the largest photovoltaic power stations in Asia. Just 70 kilometres southeast of Kunming on the outskirts of the Stone Forest, a 166 MW solar farm is expected to complete construction this year. Once fully underway, the project will generate 188 million kilowatts of energy per hour, eliminating 175,000 tons of carbon dioxide emissions each year. The 9.1 billion Yuan (US$1.45billion) project is just one of many reasons Kunming carries the unofficial title of China's 'Solar City'.

Outside of Yunnan, massive endeavours throughout China are underway to reinforce the importance of wind and solar energy while tackling the country's crippling pollution issues. Although often overlooked, China already leads the world in terms of renewable electricity production, currently spending more than US$80 billion annually on enhancing its green energy sector — funding which has facilitated a 100-fold increase in the country's use of solar cells since 2005.