China tightens carbon emission laws, offers eco-car subsidy

China issues the "fifth standard" which comprises more stringent laws on light vehicle emissions, as well as introduces subsidies to promote the use of environment-friendly vehicles nationwide.

China has issued more stringent laws on light vehicle emissions while introducing subsidies to promote the use of environment-friendly vehicles in the country. 

Manufacturers of electric vehicles will be eligible for government subsidies.

The Ministry of Environmental Protection on Tuesday unveiled the country's "fifth standard" which further tightens emission control requirements, including stricter control on nitric oxide and particles as well as a new indicator for pollutant control. Slated to be fully implemented nationwide from January 2018, the fifth standard is equivalent to current light vehicle emission regulations in Europe, the ministry said in a report by Xinhua Agency

Beijing currently has a supply of low-sulphur fuel and has been approved by China's State Council to deploy the new regulation. Cities with such fuel supply are encouraged to lead the implementation of the fifth standard, the ministry noted.

To comply with the fifth standard, new vehicles in the country will need to go through tougher tests such as doubling their mileage in emission tests.

Incentives to use eco-friendly cars

While one ministry clamps down on carbon emissions, another ministry has stepped up to offer incentives to drive the use of environment-friendly vehicles in China.

The Ministry of Finance said on Tuesday it will offer subsidies starting 2013 to 2015 to promote the use of new-energy vehicles. According to a Xinhua Agency report, manufacturers of electric, plug-in hybrid electric, and fuel-cell vehicles will be eligible for the subsidies. Government agencies, public institutions, and the public transport system will be key targets to adopt the new policy, stated a notice jointly released by the Finance Ministry, Ministry of Science and Technology, Ministry of Industry and IT, and the National Development and Reform Commission. 

The subsidies will be measured based on price differences between new-energy alternatives and traditional vehicles, but these amounts will decrease each year with production scale and technological advancement.

China's central financial authorities will also reward pilot cities with subsidies according to the amount of their investment in developing electric-charging equipment. Key target locations include the country's mega-cities or city clusters which face pressures to save energy and cut emissions, such as the Beijing-Tianjin-Hebei cluster, Yangtze River Delta area, and Pearl River Delta region.