CHINA may offer tax breaks to companies that support energy conservation, Finance Minister Jin Renqing said.

China will back new projects in solar energy, wind power and biofuel production, Jin told reporters during a briefing at the National People’s Congress in Beijing on Friday.

The government has set a target of reducing the amount of energy consumed to generate each unit of gross domestic product by a fifth by 2010 and reduce the emission of harmful pollutants by 10 percent.

“Fiscal policy can use tax tools to help,” Jin said. “For example, tax incentives can be given to companies in energy conservation. We are discussing new tax tools to encourage energy conservation and protect the environment.”

China’s leaders at the annual meeting of the National People’s Congress are highlighting the social and environmental costs of an economic expansion that last year accounted for nearly a 10th of global growth.

The government plans to introduce retail fuel taxes “as soon as possible” as part of efforts to reform the country’s system of road tolls and maintenance charges, Jin said.

Authorities will take measures to ensure manufacturing projects meet targets to reduce energy use, Ma Kai, head of the National Development and Reform Commission, said in his annual work report presented to the National People’s Congress on March 5. China last year met less than one-third of the energy-saving goal set for 2006.

“The government’s restatement on energy saving during the National People’s Congress does show its determination to realize the ambitious energy conservation target, though it will be very hard to achieve,” Duncan Chan, a Hong Kong-based analyst with Everbright Securities Co., said by telephone Friday.

China will use “an energy- saving evaluation and examination system for fixed-asset investment projects and make energy efficiency a mandatory criterion” for their approval, Ma said March 5.

The country will “gradually and prudently” reform the way resources are priced to reflect the scarcity and environmental cost of consuming resources, he said March 7.

China, the world’s biggest energy consumer after the United States, may consume 7.56 million barrels of oil a day this year, a rise of 6.1 percent compared with that of 2006, the International Energy Agency said in a February forecast.

The country imported a record 13.7 million tons of oil in January. Oil imports last year rose 14.5 percent to 145.2 million tons, according to customs data. Growth in imports may slow to 10 percent this year, China Petrochemical Corp., the nation’s second-biggest oil company, said Thursday.

The nation plans to spend 1.5 trillion yuan (US$193 billion) by 2020 to expand renewable energy use such as solar and wind power to 16 percent of total supply from 7 percent now. The country will subsidize biomass projects, especially those in bio-diesel and ethanol, the Ministry of Finance said Nov. 10. 

(SD-Agencies)