Since 2011, energy management contracting projects carried out by energy services companies of our country will enjoy many preferential tax policies, such as, value-added tax, business tax, business income tax, etc. implementation of the finance and taxation policy has greatly intensified the execution of new deal of energy management contracting .

 “Whether market or policy environment, energy conservation service industry are faced with an unprecedented good environment during “Twelfth Five-Year” period’, said Wu Daohong, director of ESCO Committee of China Energy Conservation Association.

 What is valued by Wu Daohong is Notice on Policies to Promote Energy Conservation Service Industry to Increase Value-added Tax, Business Tax and Business Income Tax which was issued a few days ago by Ministry of Finance of the People’s Republic of China together with State Administration of Taxation to encourage enterprises to apply energy management contracting mechanism and intensify technical transformation of energy conservation and emission reduction. The specific preferential tax policies on China's energy management contracting projects have been specified and identified in the notice. Since 2011, energy management contracting projects carried out by energy services companies of our country will enjoy many preferential tax policies, such as, value-added tax, business tax, business income tax, etc.

 Meanwhile, National Development and Reform Committee and Ministry of Finance of the People’s Republic of China announced the second batch of energy services company record list on March 14, including 523 energy services companies in total, 62 enterprises more than that of the first batch. It was mentioned in the announcement that the eligible energy management contracting projects signed after Jan.1, 2011 listed in the second batch of record list could apply for national financial reward.

 As far as Wu Daohong is concerned, implementation of the finance and taxation policy has greatly intensified the execution of new deal of energy management contracting. In current China with better and better policy environment and huge market of energy conservation and emission reduction, finance and taxation subsidy has added thick and heavy colors to bright prospect of industry in future.

 Policy is not Advertising

  The country supported energy services companies in terms of fund, tax reliefs, financial accounting system, financing, etc.

 According to incomplete statistics, more than 3,000 energy services companies have officially been registered in Administration for Industry & Commerce since 2009. Wu Daohong said to reporter, “domestic energy services companies will be doubled in 2011.” However, under the current situation, the increase of energy services companies doesn’t really mean that they have good condition in profit. Reporters found that in interview that some energy services companies were not as excited as we expected on hearing the news of good policies. “We’ll make the situation clear and then set about preparing related data for declaring reward fund”, Wang Shumao, executive director of the World Bank Energy Conservation Promotion Project Office, repeated what an insider thought to the reporter.

 
On Apr.2, 2010, four ministries and commissions united to issue Opinions on Accelerating Energy Management Contracting and Promoting Energy Services Industry Development, this time, the country supported energy services companies in terms of fund, tax reliefs, financial accounting system, financing, etc. However, not many enterprises really enjoyed the privilege brought from policies. In China’s energy services industry annual summit held on Jan.13 of this year, Zha Aijun of Economic Construction Department of the Ministry of Finance indicated, “the expenses of energy management contracting have been arranged, but not been spent. Only 1.2 billion Yuan has been transferred from the budget layout of 2 billion Yuan.”

 Why? Jia Kang, head of Research Institute for Fiscal Science, Ministry of Finance, P. R. China, said to reporter, “first, it is not caused by lack of capital, but longer duration of energy management contracting projects”. He explained, “because many projects have lag phase in the first year, the reward can be offered after implementation according to amount of energy saving, the financial fund is offered late due to lag of project.”

Meanwhile, Jia Kang considered that year of 2010 was the first year when energy management contracting had enjoyed national reward, and local government shall also formulate relevant supporting facilities and clarify the central and local specific enforcement regulations. The tax preference of “3 exemptions and 3 halving” was surely very hard to carry out, therefore, the implementation of the finance and taxation policy must be vigorously strengthened so that it could support the industry.

“Compared with more financial policies and finance and taxation policies support, what energy management contracting companies need more is the implementation of the existing policies. When the Centre issues a policy, it will take a long time to carry it out in local regions and industries”, Wu Daohong sighed with emotion.

Record list also became “obstacle” to impose restrictions on development of some enterprises. Wang Shumao told the reporter that many owners would like to give preference to the enterprises in the list after the list was published. As far as he was concerned, record list is more an effect of a brand. Wang Shumao considered, “the country declares record list irregularly, many small energy management contracting companies in pioneering period have missed the declaration last year due to various reasons, it is believed that industry companies’ participation in declaration this year will bring larger motive power.”