China reduces coal import tax to 0%, the obsession with power shortage is returning? China’s leaders have been obsessed with how to increase coal supply since July 2021. At that time, the country fell into the most severe widespread blackout in more than 10 years.
According to Bloomberg, the Ministry of Finance of China said it will reduce coal import tax to 0% from May to the end of March 2023 to ensure energy supply.
The current tax rate ranges from 3-6% depending on the type of coal applied since 2014. In the first quarter, China’s coal imports fell 24% due to soaring global prices.
China is the world’s largest coal importer, and any move to boost its purchases would put further pressure on fuel prices, which have surged in recent months due to the conflict. Russia – Ukraine. In early April, the European Union and Japan banned coal imports from Russia.
“We see Russian coal as likely to be the main beneficiary, and China’s move to lower import tariffs is aimed at addressing supply chain disruptions,” said Morgan Stanley analysts including Sara Chan. coal at Qinhuangdao port (Hebei province)”.
Qinhuangdao, China’s largest coal import port, has been blocked since yesterday due to the record of a number of new COVID-19 infections.
Indonesia, China’s biggest coal supplier, enjoyed zero import duties thanks to an earlier agreement. So does Australia, but China has stopped importing from the country in 2020 due to serious disagreements between the two countries surrounding the alleged origin of the COVID-19 pandemic.
After Indonesia, Russia was China’s second-biggest supplier last year. In March, Chinese importing companies began paying for part of coal purchased from Russia in yuan to avoid Western sanctions.
China’s leaders have been obsessed with how to increase coal supply since July 2021. At that time, the country fell into the most severe widespread blackout in more than 10 years as electricity demand skyrocketed because of the heat but supply could not keep up, in part due to soaring coal prices.
China is heavily dependent on domestic miners. Authorities are asking them to increase capacity by 300 million tonnes this year after hitting record output last year.
However, imports fell due to rising freight rates even as China imposed a ceiling on domestic fuel prices. China’s southern coastal provinces, located far from the northern mining hub, are particularly dependent on imports.
In early April, an executive at the China Coal Transport and Distribution Association warned that many regions will once again be at risk of fuel shortages for thermal power if domestic coal production declines. reduction.
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