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ENERGY CONSERVATION SERVICES
The amendments to the Energy Conservation Law of the PRC (《中華人民共和國節約能 源法》) (the “Energy Conservation Law”) on July 2, 2016, were implemented on September 1, 2016. Under this legislation, energy conservation is a basic national policy of China and the PRC Government implements energy development strategy that concurrently promotes energy conservation and energy exploitation and prioritizes energy conservation. Under the Energy Conservation Law, the PRC Government shall implement industrial policies that are favorable to energy conservation and environmental protection, restrict the development of high-energy consumption and high pollution industries and develop industries that are energy-efficient and environmental-friendly. The law requires the grid operator to arrange for on-grid connection of electricity generated by heat and power cogeneration appliances, waste heat or waste pressure recovery appliances or other energy-conservation appliances. The PRC Government also encourages the use of energy-efficient and energy conservation equipment and the application of energy conservation technologies including cogeneration of heat and electricity, waste heat recovery, clean coal and energy consumption monitoring and control systems. Moreover, the Energy Conservation Law mandates enterprises to carry out technological transformation for energy conservation. The law also sets out an incentive scheme to encourage the development and use of energy conservation technologies and appliances.
Launched on November 10, 2004 by NDRC, the Medium and Long-term Plans of Energy Conservation (《節能中長期專項規劃》) details energy conservation goals and implementing plans for China during the period from 2006 to 2020. According to the plan, China shall continue to prioritize and promote energy conservation, and reinforce energy conservation regulations on high energy consumption sectors. Necessary expenses for energy conservation management and energy conservative renovations shall be included in the relevant government fiscal budgets to provide funding and subsidy to support major energy conservation projects such as upgrading of fossil-fired industrial boilers and the improvement of waste heat recovery.
The Action Plan for Upgrading and Retrofitting of Energy Conservation and Emission Reduction of Coal-fired Plant (2014–2020) (《煤電節能減排升級與改造行動計劃 (2014–2020 年)》) was issued by the NDRC, the MEP and the NEA on September 12, 2014 and the Implementation Plan for the Comprehensive Project of Coal-burning Furnaces Energy-conserving and Environment-friendly Improvement (《燃煤鍋爐節能環保綜合提升工 程實施方案》) was issued on October 29, 2014 by 7 authorities, including the MIIT, the NDRC, the MEP, the MOF, the General Administration of Quality Supervision, Inspection and Quarantine, the National Government Offices Administration and the NEA, to specify the regulations on retrofitting of energy conservation of furnaces and other environmental protection of equipment, especially mature and applicable retrofitting techniques of energy conservation, such as recycling the waste heat in the furnaces, frequency conversion motors and refined heat supply.
The NDRC, the MOF, and the People’s Bank of China and the SAT jointly promulgated the Opinions on Accelerating to Promote Energy Management Contracting to Facilitate the Development of Energy Conservation Service Industry (《關於加快推行合同能源管理促進節能服務產業發展的意見》) on April 2, 2010. The opinions stipulate that the PRC Government will implement policies and measures promoting the development of energy saving industry including providing financial support, tax benefits, improving accounting system and financial services. The opinions also provide that the PRC Government shall support the growth of energy conservation solution companies.
On June 29, 2010, the MOF and the NDRC jointly released the Notice of Requirements of Financial Incentive Funds for Energy Management Contracting Projects and Approval and Filing of Energy Conservation Service Company (《關於合同能源管理財政獎勵資金需求及節能服務公司審核備案有關事項的通知》) to set out a dynamic administrative system of approval and filing for the energy conservation service companies which apply for financial incentive funds. The Supplementary Notice for Fiscal Incentives for Energy Management Contracting Projects (《關於財政獎勵合同能源管理項目有關事項的補充通知》) issued by the NDRC and the MOF on October 19, 2010 clarifies the projects and their technology, techniques and products support by the fiscal incentives include modification project of furnaces, and recycling of residual heat and pressure, with together the projects the funds do not support.
On May 12, 2015, the MOF issued the notice on the Interim Measures for the Administration of Subsidy Funds for Energy Conservation and Emission Reduction (《節能減 排補助資金管理暫行辦法》). For the purposes of the notice, “Subsidy Funds for Energy Conservation and Emission Reduction” refers to special funds allocated from the PRC central financial budget to support the development of energy conservation and emission reduction. The key supporting scope of the subsidy funds for energy conservation and emission reduction includes innovative systems and mechanisms of energy conservation and emission reduction, fundamental ability and construction of public platforms of energy conservation and emission reduction, comprehensive demonstration of financial policies of energy conservation and emission reduction, energy conservation and emission reduction in key fields, key industries and key regions, demonstration, promotion, improvement and upgrading of key energy conserving and emission reducing techniques, and other relevant projects as approved by the State Council.
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