China will impose a tax on energy usage of eight industrial sectors which have the highest energy usage in the country it recently announced. The eight sectors include iron and steel, aluminum and cement. The Chinese agencies have divided the industrial units into two categories, seemingly according to their energy usage and efficiency.
The units which lag others in energy efficiency and has very high energy usage will be taxed ¢20 per kWh of the electricity consumed. While the second category of relatively more efficient units will face a surcharge ¢5 per kWh of electricity consumed.
The energy tax is the latest in a series of efforts launched by the Chinese agencies. China had announced that it aims to reduce its carbon intensity (carbon emissions per unit GDP) by 20 percent by 2020 from 2005 levels. As an intermediate goal, China aims to reduce carbon intensity by 17 percent between 2011 and 2015.
Xie Zhenhua, the vice chairman of national development and reform, said that China has launched pilot carbon emission trading schemes in some of the provinces but no decision has yet been taken regarding the carbon price or the entities which would be part of the trading scheme.