The Law of Renewable Energy Resources of China

The use of renewable energy sources has gained widespread support from the State Council and the Ministry of Science and Technology. The “Eleventh Five-Year Plan” Development of petroleum substitutes, including bioliquid fuel is one of the goals of the “Eleventh Five-Year-Plan”.

With the objectives of increasing energy supply, preserving natural environment and promoting the use of renewable energy sources, the National People’s Congress on February 28, 2005 passed the Law of Renewable Energy Resources of the People’s Republic of China which came into effect on January 1, 2006. Pursuant to this law, the State encourages the manufacturing and application of bioliquid fuel, and mandates petroleum selling enterprises to include bioliquid fuel that meets with the standards prescribed by the State into their fuel selling system.

If any petroleum-selling enterprise fails to do so, the petroleum-selling enterprise will be liable to the economic loss suffered by the manufacturers of bioliquid fuel. Financial institutions may provide funding to renewal energy projects admitted to the Guidance Catalogue for Renewable Energy Resources Development on favorable terms and the State will also provide tax incentives to projects.

The Law of Renewable Energy Resources also provides that the State shall set up a special fund for the development of renewable resources (the “Special Fund”). The Ministry of Finance issued the Temporary Regulation on the Management of Special Fund for Development of Renewable Resource on May 30, 2006. Pursuant to this regulation, the Special Fund shall mainly provide assistance to enterprises that engage in the development and use of renewable resources, including petroleum substitutes, which have great potential and bright prospects.

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