China Drops Tariffs to Encourage CBM Growth

China is set to eliminate tariffs and value-added taxes on equipment and components used to develop coal bed methane (CBM) refining in mines starting this year, a joint statement issued by the country's finance ministry and other central government departments said on Tuesday.

The move is aimed at accelerating the CBM exploration in the coal mines, the statement said.

China CBM Group Co Ltd, a Chinese company engaged in prospecting and developing the country's CBM resources, and its domestic and foreign partners will be exempted from tariffs and value-added taxes on imports of machines, instruments and components that are used in CBM exploration operations from 2011 to 2015, it said.

The facility will be offered to other domestic companies engaged in CBM exploration subject to the clearance of their applications by the ministry, the General Administration of Customs and the State Administration of Taxation, the statement clarified and further noted that these companies must ensure filing of their applications before arrival of their imports at Chinese ports.

China which observers a strict formula for market access to its CBM industry, planned to extract 10 billion cubic meters of CBM from its mines during the 11th Five-Year Plan period (2005-2010), but extracted only 2 bcm during the period.

Source: Xinhua