IMO2020-compliant fuel oil: tax rebate. File image/Pixabay.
An executive with oil refiner Sinopec has asked the Chinese government to introduce tax rebates and a quota system to boost domestic production of cleaner shipping fuel ahead of the 0.5% sulfur cap on bunker fuel which applies globally from the start of next year.
According to Reuters citing Chinese news agency China Energy News, Zhang Chunsheng, chairman of Sinopec's Jinling Petrochemical, whicih is one of the country's largest oil refineries, made the proposal during the annual parliament meeting in Beijing this week.
China imports nearly 90% of the currently 10 million metric tonnes (mt) per year of the marine fuel it consumes, with domestic refineries facing comparatively high taxes on the fuel, the report said.
Zhang called for rebates of value-added tax and a waiver of consumption tax for 0.5% sulphur fuel oil. He also asked the government to consider setting export quotas specifically for the fuel to boost overseas shipments.
Two Chinese plants have already produced cargoes of IMO2020-compliant fuel.