CSRC to ease regulations for QDII applicants

Date Mar 27 2013 10:56:57

The China Securities Regulatory Commission proposed lowering the requirements for applicants for the Qualified Domestic Institutional Investor program, such as fund companies and brokerages, in terms of capital and other requirements, the CSRC said on its website on Thursday.

Analysts said the move will encourage and help brokerages to increase outbound investment, deliver better performance and benefit as business channels expand.

QDII investors will also be allowed to invest in derivatives listed on foreign exchanges that have signed memorandums of understanding with the CSRC, increasing the number of foreign investment outlets from the current approved list.

In 2012, the average yield of QDII funds was 9.87 percent, more than the double that of stock-oriented funds in the domestic market.

A pilot QDII program started in June 2007. Thirty-two fund management companies and 12 brokerages had qualified as QDII by the end of 2012.(chinadaily)

Report by SHMET

China to release new policies to support shale gas development: report

Date Mar 26 2013 17:10:33

China will soon release new policies to support the development of its nascent shale gas sector, local media reported Tuesday, citing officials from the Ministry of Land and Resources.

Policies formulated by the National Energy Administration and the MLR have been finalized and are likely to be unveiled soon, according to a report in the 21st Century Business Herald on Tuesday.

These include guidelines regulating the award of mineral rights and bids for acreage, the report said, citing Yang Lei, an official from the NEA who was at a conference on Monday.

The new policies will address technology, research and infrastructure aspects of shale gas development to support continued investment.

The next step of development is to open the market and increase competition among players, said Che Changbo, deputy head of the MLR's geological exploration division, who was also at the conference.

"The next step ... has to involve continued improvement in the guidelines for shale gas in terms of players involved and technology, both to attract funding and to avoid overheated investment," he said.

The new policies would likely set stricter thresholds for market entry and impose tightened environmental regulations, he said.

China's Ministry of Finance had in November announced a subsidy of Yuan 0.40/cubic meter (6 cents/cu m) of shale gas production to producers in China from 2012 to 2015 in a bid to promote exploration and incentivize production.

Che said following the introduction of the subsidy, the MLR and other relevant departments are studying more incentives and measures.

The shale gas sector in China faces numerous challenges, including geological difficulties, a lack of drilling technology and a shortage of midstream pipeline infrastructure to bring gas to the market. The expected high costs of development and production are also a deterrent to potential entrants, particularly when natural gas prices are currently controlled by the government.

"The lack of natural gas pipeline infrastructure and high investment required are considered to be major barriers to shale gas development, considering that the current subsidy for shale gas does not even cover the early stage investigation," investment bank North Square Blue Oak said in a report on Tuesday. "Greater fiscal support is therefore needed to offset this."

Anxious to retain control of a vital domestic resource, the government has also restricted foreign participation in the sector. Foreign companies could not directly participate in China's latest shale gas bid round in December last year and 19 blocks were ultimately awarded to 16 domestic companies, none of which had any oil and gas experience.

Given the existing factors, China will likely not meet its official target to produce 6.5 billion cu m/year (628,600 Mcf/day) of shale gas by 2015, from zero currently, analysts have said.(chinamining)

Report by SHMET

New rules to boost coal ash recycling

Date Mar 14 2013 12:24:40
Mar.14,2013(SHMET)--A new regulation that aims to stimulate the recycled use of coal ash, the main waste product of coal burning, will take effect on Friday.

China has witnessed continuous growth in disposal of coal ash, the solid waste generated by burning coal. Its annual output of the material is expected to jump from the 480 million tonnes in 2010 to 570 million in 2015, posing environmental threats.

The regulation encourages the application of coal ash in producing wall materials, cement and concrete. Alumina extraction from high-aluminum coal ash is also suggested.

Relevant government departments will subsidize the research and study of integrated use of coal ash, according to the new rules.

Based on a previous management code created in 1994, the new regulation was revised by the National Development and Reform Commission, Ministry of Science and Technology, Ministry of Finance and seven other ministerial organizations.

It is the latest effort to promote the recycling of coal ash in China, the largest coal consumer in the world.

Figures show that the country's integrated utilization rate of coal ash rose from 35 percent in 1994 to 68 percent in 2011, surpassing that of many developed countries (Chinamining).

Report by SHMET

Deputy appeals for greener coal mining policies

Date Mar 14 2013 12:23:01

A legislator has called for more policies to encourage greener exploration of coal in an attempt to improve energy efficiency and reduce pollution.

"Society is now striving to stop extravagance on the dinner table, but what should draw more attention is energy waste," said Bu Changsen, chairman of Shandong Energy Group, the country's second-largest coal producer.

Bu, also a deputy to the country's top legislature, said energy waste is extremely severe in the coal production process, which also discharges a large amount of solid waste and dust.

He said coal burning generates 70 percent of the emissions of suspended particulate matter, a major source of air pollution in China.

"Waste on a dinner table may cost money, but energy waste kills. We can grow vegetables and breed cattle, but fossil fuels are non-renewable resources."

He also said coal mining has led to the collapse of as much as 600,000 hectares of land. To reduce such damage, Bu suggested mining should use a method where waste rock is used as filler material during the exploration process.

This process could even use sediment from the Yellow River, and such a program is likely to first be rolled out at Heze, in Shandong province, Bu said.

Companies should also improve efficiency during the washing and dressing process in coal mining, he said, and advanced technology should be introduced, such as integrated gasification combined cycle technology.

This technology uses a gasifier to turn coal and other carbon-based fuels into a gas known as synthesis gas, or syngas. It then removes impurities from the syngas before it is combusted. Some of these pollutants, such as sulfur, can be turned into reusable byproducts.

Some of these measures have been adopted by companies, but Bu called in his motion for more government support to widen such operations to the entire industry.

Bu suggested the government should offer more financial support to enterprises using the filler method.

He said long-distance (more than 500 km) transportation of coal should be banned, along with the direct burning of rough coal. The introduction of new techniques will also improve work efficiency and reduce working hours, he said.

According to the National Bureau of Statistics, China's coal production stood at 3.65 billion tons in 2012, accounting for 50 percent of the world's total, and 500 million tons more than the combined volume of the other nine countries on the list of the top 10 producers.

In 2011, coal contributed to 68.4 percent of China's total energy consumption. The National Energy Administration estimates the proportion will still be above 50 percent by 2030, when annual coal consumption reaches 4.5 billion tons.

"Coal will be a major component in China's energy structure in the long term," Bu said.

Many developed countries no longer explore highly polluting resources but China has to do so to fuel its economic growth.

However, "the 'golden age' for China's coal industry in the past 10 years has passed, and it will never come back," Bu said (Chinamining).

Report by SHMET

China to introduce carbon tax: official

Date Feb 21 2013 10:08:52

China will proactively introduce a set of new taxation policies designed to preserve the environment, including a tax on carbon dioxide emissions, according to a senior official with the Ministry of Finance.

The government will collect the environmental protection tax instead of pollutant discharge fees, as well as levy a tax on carbon dioxide emissions, Jia Chen, head of the ministry's tax policy division, wrote in an article published on the MOF's website.

It will be the local taxation authority, rather than the environmental protection department, that will collect the taxes.

The government is also looking into the possibility of taxing energy-intensive products such as batteries, as well as luxury goods such as aircraft that are not used for public transportation, according to Jia.

To conserve natural resources, the government will push forward resource tax reforms by taxing coal based on prices instead of sales volume, as well as raising coal taxes. A resource tax will also be levied on water.

The article did not specify when the new measures will be implemented.

In 2010, MOF experts suggested levying a carbon tax in 2012 at 10 yuan per ton of carbon dioxide, as well as recommended increasing the tax to 50 yuan per ton by 2020.

China is among the world's largest emitters of greenhouse gas and has set goals for cutting emissions. The government has vowed to reduce carbon intensity, or the amount of carbon dioxide emitted per unit of economic output, by 40 to 45 percent by 2020 in comparison to 2005 levels (Chinamining).

Report by SHMET