BEIJING // China announced yesterday it will ban new coal-fired power plants in three key industrial regions around Beijing, Shanghai and Guangzhou in its latest bid to combat the country’s notorious air pollution.
The action plan from the state council, China’s cabinet, also aims to cut coal’s share of the country’s total primary energy use to below 65 per cent by 2017 and increase the share of nuclear power, natural gas and renewable energy. According to Chinese government statistics, coal consumption accounted for 68.4 per cent of total energy use in 2011.
New coal-fired power plants will be banned for new projects in the region surrounding Beijing, in the Yangtze Delta region near Shanghai and in the Pearl River Delta region of Guangdong province, the state council said.
Martin Adams, Hong Kong-based energy editor for the Economist Intelligence Unit, said coal’s share of China’s energy consumption was already expected to fall below 65 per cent by 2017 and that utility companies had noticed approvals for coal plants were no longer being given.
Mr Adams also noted that, while coal would account for a smaller proportion of total energy production, the absolute amount of coal burning would continue to rise.
Speaking about the new action plan, Mr Adams said: “There is less to it probably than meets the eye. Of course, saying it out loud does send a signal that the government is serious about, at least, decreasing the rate at which coal consumption grows and about getting more renewables and natural gas and nuclear.
“I think possibly just as important, if not more important, is the signal that it sends to the Chinese people that, ‘we are trying to control pollution levels on the eastern seaboard’.”
The government has come under increasing pressure from the growing middle class to clean up China’s air pollution, much of which comes from the burning of coal.
The action plan calls for the density of fine particulate matter – a gauge of air pollution – in Beijing to drop by 25 per cent by 2017 from 2012 levels and by at least 10 per cent in cities nationally.
It aims to raise the share of non-fossil fuel energy such as solar and wind power to 13 per cent by 2017. It was 9.1 per cent last year.
The environmental campaign group Greenpeace welcomed the plan, saying it would set an important precedent that should be extended throughout China and followed by other major countries.
“China’s political leadership has set an ambitious timeline to solve China’s air pollution crisis, responding to the mandate set by the Chinese public,” Li Yan, climate and energy campaign manager at Greenpeace East Asia, said. “The targets can only be met by tackling China’s coal consumption growth and the plan takes very important steps in that direction,” she said.
* Associated Press
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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