Posted Dec. 29, 2010

The People's Republic of China has taken action to make biodiesel production within the country more economical. In late December China's Ministry of Finance and State Administration of Taxation announced that pure biodiesel made from waste animal fats or vegetable oils is now exempt from consumption taxes.

The new policy has been enacted retroactively, effective Jan. 1, 2009. According to information released by the People's Republic of China, consumption taxes paid on biodiesel since that time will be refunded.

The action aims to boost the renewable resources sector, easing demand for petroleum and protecting the ecological environment, said the government in a statement. Biodiesel producers are expected to save approximately 900 yuan ($135) per metric ton due to the action. According to the statement, this should help make biodiesel producers more competitive in the fuel sector while guarding against waste edible oils from being reused for human consumption, which will help ensure food safety.

Biodiesel producers within the country are already reacting to the news. On Dec. 28 Chinese biodiesel company Gushan Environmental Energy Ltd. announced that it is currently in the process of assessing the effect of the new policy. "Gushan is in the process of assessing the immediate impact of this notice on its business operations and production plans and expects to make an announcement regarding the implications of this notice following further evaluation by its management," said the company in a press release. Biodiesel Magazine was unable to reach a representative of Gushan for further comment on the development.