Tax policy paving the way for China to seek renewable energy development and utilization

"The technological development of renewable energy is the latest round of international competition in the energy sector. Whoever has mastered renewable energy equipment and technologies in the future will have the initiative to develop and utilize renewable energy." The Energy Research Institute of the National Development and Reform Commission may Wang Zhongying, director of the Renewable Energy Development Center, said.

At a recent China International Summit on Alternative Energy, experts at the conference proposed that we not only attach great importance to the development of renewable energy from the national strategy, but also formulate relevant policies from the national fiscal and taxation policies, corporate investment mechanisms, etc. Energy may be developed and utilized.

The development of renewable energy has become a consensus

With the depletion of fossil fuels, such as oil and coal, and the continuous deterioration of the environmental climate, the global economic development is facing severe challenges, especially in the Chinese economy.

"Since this century, China's energy consumption growth rate has been much higher than the economic growth rate. If energy and environmental issues are not well resolved, it will have an important impact on China's future development." Counsellor of the State Council, director of the China Renewable Energy Society Dingshi Dingshi said that on the one hand, China’s current dependence on foreign oil is close to 50%, and China’s oil dependence on foreign countries may reach 60% to 70% by 2020, which poses a severe challenge to China’s economic and social development in the future; on the other hand, About 70% of China's energy structure comes from coal. Although the government has done a lot of work on energy conservation and emission reduction in recent years, in the long run, the issue of greenhouse gas emissions can not be ignored.

“This brings opportunities for the development of clean and efficient renewable energy.” Shi Dingxi said that China’s energy strategy is a priority for conservation, emphasizing that energy consumption is based on the domestic market, and that diversified energy development will be achieved, and changes currently rely mainly on fossil energy, especially The situation of coal, vigorously develop renewable energy including water and nuclear power.

“The State Council has explicitly proposed the 'three alternatives' strategy, of which the most important one is the replacement of fossil fuels with renewable energy.” Wang Zhongying said, looking at the status of renewable energy in the near, medium and long-term energy strategies, from 2010 Supplementary energy will rise to alternative energy sources by 2020, and will become an important energy source by 2030. Renewable energy technology development is the latest round of international competition in the energy sector. Whoever has mastered renewable energy equipment technologies in the future will have development and utilization. Renewable energy initiative.

In fact, China has great potential for renewable energy development. The hydropower economically exploitable resources amount to 400 million kilowatts, and by the end of 2007, only 145 million kilowatts have been developed, which is less than 1/3; the amount of wind power development resources is at least 3 billion kilowatts, and only 5.9 million kilowatts were developed by the end of 2007; Currently, the amount of resources that can be exploited is between 800 million and 1 billion tons of standard coal, while the current development and utilization is only about 15 million tons of standard coal. Solar energy has unlimited resource potential.

"Not only is there a resource advantage, but China's renewable energy companies are also growing at an alarming rate and have emerged among the world's leading suppliers." Xu Haoyun, a global managing partner at McKinsey & Company, said that China has more than many mature markets. Low labor costs, transportation costs, metal prices, more flexible production processes and simple design. According to statistics, in the solar power industry, the production cost of Chinese companies is 25% to 50% lower than in Europe. In the wind power industry, the profits of Chinese companies are 3 times that of other countries.

Tax policy paves the way for the development of renewable energy

According to the researcher Cha Aijun of the Department of Economic Development of the Ministry of Finance, in order to solve the problems of higher costs, higher risks, and immaturity of related technologies in the development of renewable energy, relevant government departments have successively introduced a series of system measures in recent years. A preliminary set of fiscal and taxation policy frameworks to promote the development of renewable energy has been initially formed, which has effectively promoted the development of renewable energy.

The first is to steadily promote non-food bio-energy development, provide appropriate financial interest subsidies for non-food demonstration projects during the construction period, and give appropriate incentives after meeting the standards after completion of production; second, actively support the development of wind power industry, especially for the development of wind power in China. The assessment and planning of wind energy resources lags behind, the wind power industry system is incomplete, the technological innovation capability is not strong, and the key technologies and equipment have been imported. The Ministry of Finance in conjunction with the National Development and Reform Commission issued the “On the Promotion of Wind Power Industry Development” in 2006. The notice of “Opinions” mainly supports basic work such as evaluation of wind energy resources, planning and establishment, knowledge of wind power industry system, and industrialization system construction; Third, support for the application of large-scale energy in the construction field; fourth, actively support straw biomass energy Comprehensive utilization.

In addition, the reporter learned that China has also adopted a series of measures in its taxation policy system.

In terms of income tax, new renewable energy projects such as wind power generation and solar photovoltaic power generation will be included in the scope of the corporate income tax preferential list for public infrastructure projects, and renewable energy technologies such as wind power generation and solar photovoltaic power generation will be incorporated into the high-tech fields supported by the state; And find qualified renewable energy companies, according to the law to enjoy preferential corporate income tax reduction policies.

In terms of tariffs, this year the Ministry of Finance issued a circular on the "Adjustment of Imported Tax Policies for Imports of High-Power Wind Turbine Generators and Their Key Components and Raw Materials," which stipulates that since January 1, 2008, domestic companies will develop and manufacture products that meet the specifications. The import tariffs and value-added tax of imported key components, raw materials, and import value-added tax of high-power wind turbines are subject to advance retreat. The tax refunds are mainly used for the development of new products, production, and financing of innovative capacity; at the same time, Since May 1, 2008, newly approved wind power generators with rated power of not more than 2.5 MW imported from domestic and foreign investment projects have ceased to implement import tax exemption policies.

Actively seek renewable energy investment opportunities

How to promote the healthy development of renewable energy? Experts believe that the government should give appropriate financial support for renewable energy, and gradually establish a long-term mechanism for promoting the development of renewable energy; enterprises should strengthen investment in technological innovation, enhance technological content, eliminate supply bottlenecks, and enhance industrial competitiveness.

Zhao Aijun, researcher of the Department of Economic Development of the Ministry of Finance believes that at present, the government should mainly establish three effective mechanisms.

The first is to establish a cost-sharing mechanism and give appropriate support in taxes, funds, and prices so that the high cost of renewable energy development can be shared by all fossil energy consumers in order to solve the problem of market failure.

The second is to establish a risk sharing mechanism. Changes in oil prices are the greatest risks facing the development of renewable energy. In recent years, due to changes in the international political situation, the weakening of the U.S. dollar, speculative factors, and other factors, the international crude oil price has fluctuate greatly, making renewable energy development facing greater instability. In the absence of a stable market expectation, market players dare not invest in renewable energy rashly. This requires the use of fiscal functions, the establishment of risk sharing mechanisms, and the stabilization of market expectations.

The third is to establish a research and development investment mechanism. Solar photovoltaic power generation, wind power generation and other renewable energy technologies have high technological content. The core technology research and development often requires huge human, material, and financial resources. This requires financial investment in basic research and industrialization to provide renewable energy. Effective technical support.

“Chinese companies should actively seek investment opportunities in renewable energy and obtain returns through the establishment of an integrated operating model.” Xu Haoxi said, “China should formulate targeted basic industries and energy industry development through systematic research and comprehensive demonstration. Strategy, identify clear investment priorities, change the situation of high concentration of the industry and low idle capacity in the bottleneck of the supply chain, and at the same time, shape the pattern affecting the whole industry in the field of renewable energy, and create energy prices that affect the world, for Chinese companies Create value and achieve the win-win results of the world, China and the company."