China Shines Light on New Energy

The PRC Environmental Tax Law is the first tax law that targets “Green Taxation System” of China. It is also part of a broader regulatory trend to replace the fee systems with tax; the law will replace the pollution discharge fees, which have been collected for more than 30 years. And because the levying scope, tax base, and rates are flat with the previous discharge fees, the environmental tax does not impose a substantial financial burden on enterprises. Moreover, enterprises can enjoy certain benefits and opportunities for reduced rates through the tax breaks provided by the law.

That said, the mandatory tax entails higher costs and serious consequences for breaching the law and making inadequate payments, meaning enterprises must pay greater attention to compliance and risks.

3. What were the major energy-related deals (inbound and outbound) from the past year?

In March 2017, the Hong Kong jewelry conglomerate Chow Tai Fook announced its acquisition of Australian gas and electricity company Alinta Energy Holdings for approximately AUD4 billion. The deal secured regulatory approval from the Australian authority this April. In January 2017, the State Grid Corporation of China acquired 54.6% of shares in Brazil's largest power distributor CPFL Energia SA for approximately Rmb14.2 billion, marking State Grid's largest purchase yet.

4. Can you describe the impact of the power grid sector opening up?

China's opening up of the power grid sector has much practical significance. Restructuring will allow state-owned enterprises (SOEs) to improve their management and economies of scale. Breaking the sector's monopoly will be conducive to achieving neutrality and professionalism in the power grid planning process. Particularly for national networks, the move helps to reduce disputes and encourage scientific decision-making. It also benefits government regulation by promoting information disclosure, which not only enhances the transparency but also allows for comparison among enterprises. Further, a more balanced market spectrum ensures more effective implementation of industrial policies, and reorganizing the national power grid into an optimal structure creates equal opportunities for new technologies and industries, improves local relations, and guarantees power supply at the basic level. Opening up the power grid also speeds up the modernization of enterprises in the sector, allowing them to evolve and be more sophisticated by exploring means such as listing financing and mixed ownership, further deepening the reform of China's electricity industry.

5. What are the latest regulations affecting (particularly the producers, distributors, and customers of) alternative energy vehicles?

China's existing environmental and energy policies are encouraging for alternative energy vehicles. The latest regulations included:

• PRC Law on the Prevention and Treatment of Air Pollution;
• PRC Energy Conservation Law;
• PRC Vehicle and Vessel Tax Law;
• State Council, Circular on Continuing the Promotion of the Use of Alternative Energy Vehicles;
• State Council, Circular on Incentives for the Building of Charging Facilities for Alternative Energy Vehicles; and
• State Council, Circular on 2016-2020 Financial Support Policies for the Promotion of the Use of Alternative Energy Vehicles

6. Have there been any recent changes to foreign investment access restrictions in certain energy and natural resources industries?

On June 28, 2017, the National Development Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) published the Foreign Investment Industrial Guidance Catalogue (Amended in 2017) (Catalogue). The Catalogue explicitly states that the Chinese government encourages foreign investors to invest in energy conservation, environmental protection, and other high-tech industries. Foreign access restrictions on the mining, services, and manufacturing industries have also been relaxed to a certain extent, while foreign restrictions in fields including unconventional oil and gas, precious metal, lithium, and rare metal smelting have been canceled altogether. In manufacturing, ownership requirements in steel, ethylene, oil refining, power transmission and transformation equipment, and coal chemical equipment have been abolished as well.

7. Can you describe the progress in development and legislation of renewable energy in China?

China pays great attention to the utilization of renewable energy resources. The Renewable Energy Law was enacted in 2005 and amended in 2009, and the government has made substantial progress so far in the exploration and utilization of renewable energy, which includes hydropower, wind power, solar, biomass, geothermal, and marine energy. By the end of 2016, China had installed a hydropower capacity of 330 million kW, ranking highest in the world. It has also held the world's leading position in wind power for seven consecutive years, with an installed capacity of 149 million kW by the end of 2016 and accounting for close to 4% of total social electricity consumption. From 2013, China's solar energy industry has become the world's largest new photovoltaic (PV) market. In 2016, the PV grid connected capacity stood at over 78 million kW, and the total area dedicated to solar energy utilization covered more than 400 million m². Meanwhile, biomass energy usage reached 35 million tons standard coal, and China's scale of development and construction in this resource has been at the global forefront.

The government has also introduced supporting regulations and policies for developing the PV industry and securing power consumption, further promoting the construction of standard systems in hydro, wind and PV energy.

8. What about nuclear energy?

By December 31, 2016, China had put 35 sets of nuclear power units into commercial operation, with an operating capacity of more than 33,600MWe (rated installed capacity) and accounting for approximately 2% of the nation's power supply. The Nuclear Safety Law has been released in 2017; the Atomic Energy Law has been incorporated into the government's legislative agenda, and the State Council is expected to introduce the Nuclear Safety Regulations and the Regulations on the Administration of the Nuclear Power Market soon.

9. What opportunities do foreign investors have in 'green' sectors such as clean energy, treatment systems, and environmental monitoring technology? Are there any incentives to invest in these areas?

China is actively encouraging investment in fields such as advanced manufacturing, high tech, energy conservation, environmental protection, and modern service industries. This entails opportunities for foreign investment in green areas like energy-saving technology, sewage treatment, and clean energy. There is currently much cooperation between the government and private capital nationwide, and foreign investors can seek the support of China's government in securing concessions for energy, environmental protection, municipal infrastructure projects, and other public infrastructure construction and operation projects.

Foreign investors can enjoy tax breaks and benefits if they meet certain legal and policy requirements. For instance, when investing in encouraged industries in western China, they can enjoy discounted rates in corporate income tax. Foreign-invested enterprises (FIEs) that relocate to the mid- or north-western regions of the country can enjoy preferential policies for state support, such as industrial transfer, processing trade funds, and land grants. For example, in Zhejiang province, qualified energy-saving companies and manufacturers of new energy vehicles and critical components that are recognized as high-tech enterprises will be given priority, as well as enjoy a reduced enterprise income tax rate of 15%.

10 .  What are the biggest opportunities in 2018 for foreign investors in China's energy sector?

Against the backdrop of China's welcoming of new technologies and high-tech industries, there is significant potential for foreign capital contribution in fields such as the construction, operation, manufacturing of new energy power stations, and manufacturing of critical components and solar energy batteries. The construction and operation of nuclear power plants are under the restricted category, and the Chinese investor must be the controlling party of the plants. The Regulations on the Administration of the Nuclear Power Market encourages investment diversification of nuclear power projects, supports foreign participation, as well as involvement from all types of capital with nuclear power equipment manufacturing technical services. When introduced, the regulations will play an active role in guiding foreign investors to enter China's nuclear power industry.

Jihong Wang, Partner

Zhong Lun Law Firm

Jihong Wang is head of Zhong Lun Law Firm's Real Estate and Infrastructure Practice Group and an experienced arbitrator of the China International Economic and Trade Arbitration Commission. She currently serves as the Deputy Chair of the ICC China Committee on Environment and Energy, Vice-chair of the IPBA Energy & Natural Resources Committee, Deputy Director of Environment, Resources, and Energy Law Committee of the All China Lawyers Association, and the Legal Counsel of the Ministry of Environmental Protection.

As a renowned legal expert in the environmental, energy, and urban infrastructure fields, Ms. Wang advises on various energy, natural resources, and environmental projects and provides legal services for the financing and acquisitions of, and the resolution of disputes relating to, numerous domestic and foreign energy and resource projects. Her clients include CNNC, PowerChina, CNNC China Zhongyuan Engineering Corp., China Nuclear E&C Group, CGGC, China Gezhouba Group International Engineering Co., Ltd., Chevron, CNOOC, Datang Environment, China Gold International Resources Corp., Ltd., CFIG, Sinochem International Petroleum Co., Ltd., the National Institute of Clean-and-Low-Carbon Energy, Fuel Tec, Stellar Energy, Datang Environment Industry Group, Beijing Drainage Group and CMIG. On several occasions, Ms. Wang has been invited by the Ministry of Environmental Protection to participate in legal validation in major environmental incidents, as well as in the drafting and release of its policies and regulations.

Ms. Wang has been highly praised by clients for her accurate identification and control of project risks and ability to deal with difficult and complex issues in a flexible and pragmatic manner. She has been nominated as an outstanding lawyer by authoritative international rating agencies for many consecutive years.

1. 在中国政府加强环保的政策下，企业面临哪些最大的合规难题？

随着近年来我国在环境保护领域立法、司法与执法力度显著增强，企业在承担环保责任进一步加大。尤其是2015年1月环保法实施后，增设了许多新的环保制度，企业环境合规成本提高；行政处罚力度也较之前有所提高，被称为“史上最严环保法”。

在司法方面，最高院出台《关于审理环境民事公益诉讼案件适用法律若干问题的解释》，总体上鼓励相关公益组织积极提起公益诉讼，且在环境民事公益诉讼的判例中，已出现相当高昂的赔偿数额，这增加了企业承担环保责任的后果严峻性。

2. 新的《环境保护税法》有哪些实际的影响？

《中华人民共和国环境保护税法》是我国第一部专门体现“绿色税制”单行税法。但因其更多属于“费改税”的立法行为范畴，代替了此前征收了三十余年的排污费，环境保护税的征税范围、纳税的税基与税率和此前的排污费基本持平，故对于排污企业而言，其税负压力并未因此有所增加，反倒因其在减税措施方面有所加强，而可能减少纳税。

但是，费改税后，因税的强制性，违法的成本更高，企业不及时足额缴纳税款的法律后果也较此前排污费时更为严重，对企业照章纳税的约束力有所提高。

3. 去年有哪些重大的能源交易（境内及境外）？

2017年3月，香港企业周大福宣布将收购澳大利亚能源公司Alinta Energy，交易价值约40亿澳元，此交易于同年4月已获得澳大利亚监管机构的审批。2017年1月，国家电网以约142亿元人民币收购巴西最大的私营电力公司CPFL公司的54.6%股权，该项目是国家电网迄今为止最大的境外投资项目。

4. 您可以讨论一下电网业务开放带来的影响吗?

开放电网产业具有现实的意义。重组全国电网企业，可以直接改善企业经营、获得规模经济效益；打破企业垄断之后，有利于在电网规划环节提高中立性与专业性，特别是在全国联网领域有利于减少利益纠葛、实现科学决策；促进信息公开，不但信息更加透明，而且直接增加了可比性，有利于政府的管制与决策；打破企业垄断之后，各市场主体更加均衡更加平等，可更有利于落实国家产业政策；优化产业格局，实现电网向新技术新产业的无歧视开放，也利于改进地方关系保障基层供电；有利于电网企业更快建立现代企业制度，实现上市融资、混合所有制等多项探索，也利于进一步深化电改。

5. 最新影响新能源汽车（特别是制造商、分销商和顾客）的法规有哪些？

中国现有的环境及能源政策均对替代性能源汽车持鼓励态度，这些新的法律法规主要包括：《中华人民共和国大气污染防治法》、《中华人民共和国节约能源法》、《中华人民共和国车船税法》，以及国务院《关于继续开展新能源汽车推广应用工作的通知》，国务院《关于新能源汽车充电设施建设奖励的通知》，和《关于新能源汽车充电设施建设奖励的通知》。

6. 在特定能源和天然资源行业对外资的准入限制近来有没有改变？

2017年6月28日，国家发改委和商务部共同发布了《外商投资产业指导目录（2017年修订）》，进一步明确了中国政府鼓励外资投向节能环保、高新技术等领域，并一定程度上放松了在采矿业、服务业和制造业的限制。进一步放宽采矿业外资准入，取消了非常规油气、贵金属、锂矿、部分稀有金属冶炼等领域的外资准入限制。在制造业领域，主要是取消钢铁、乙烯、炼油、输变电设备、煤化工设备等的股比要求。

7. 您可以介绍一下中国可再生能源方面的发展和立法进程吗？

中国较为重视可再生能源的利用，在2005年通过了《可再生能源法》，并在2009年对其进行了修订。目前，中国的可再生能源，包括水能、风能、太阳能、生物质能源、地热和海洋能源的开发和利用方面都取得了长足进步。到2016年底，全国水电装机达到3.3亿千瓦，位居世界首位。风电并网容量连续7年领跑全球，到2016年底，全国风电并网装机1.49亿千瓦，占全社会用电量比重达到4%。从2013年起，我国太阳能产业成为全球最大的新增光伏应用市场，2015、2016年连续两年位居世界首位。2016年全国光伏并网装机容量超过7,800万千瓦，太阳能热利用面积超过4亿平方米。另外，生物质能利用规模达到3500万吨标准煤，开发建设规模已经走在世界前列。

除了上述法律，中国还出台了扶持光伏产业发展、保障电力消纳等一些规章制度，推进了水电、风电、光伏领域的标准体系的建设。

8. 核能源方面又如何？

截至2016年12月31日，中国已投入商业运行的核电机组共35台，运行装机容量超过33,600MWe(额定装机容量)，占全国电力装机约2%。在核能立法领域，《核安全法》已于年内出台，《原子能法》已经列入立法计划，国务院的《原子能法》和《核电市场管理条例》有望近期出台。

9 . 在绿色领域例如清洁能源、排污处理和环保监察技术等方面，外商有哪些商机？在这些范畴有没有投资优惠政策？

中国鼓励外资投向先进制造、高新技术、节能环保、现代服务业等领域，因此，外资在节能技术、污水处理、清洁能源等绿色领域有很多机会。目前政府与社会资本合作项目遍地开花，中国政府也支持外资依法依规以特许经营方式参与能源、环保、市政公用工程等基础设施建设以及运营。

符合相关法律和政策的外商企业，可以享受一些税收优惠而言，比如，对符合条件的西部地区鼓励类产业外商投资企业实行企业所得税优惠政策。向中西部地区、东北地区转移的外商投资企业享受国家支持产业转移与加工贸易的资金、土地等优惠政策。再比如，一些地方，如浙江，对于符合条件的节能与新能源汽车及关键零部件生产企业，优先认定为高新技术企业，减按15%的税率征收企业所得税。

10. 2018年，外资在中国能源领域的最大机遇有哪些？

新能源电站的建设、经营、新能源发电成套设备或关键设备制造、太阳能电池等行业属于鼓励外商投资的领域，在中国鼓励引进新技术、高科技的大背景下，外资在这些领域大有可为。核电站的建设、经营属于限制类，须由中方控股。《核电市场管理条例》鼓励核电项目投资主体多元化，支持境外投资者参股投资核电项目，支持各类资本参股、控股核电装备制造、技术服务等领域，一旦出台，对于外国投资者进入核电领域也将有积极作用。

王霁虹 合伙人

中伦律师事务所

王霁虹律师是中伦房地产和基础设施部联席负责人，中国国际经济贸易仲裁委员会仲裁员资深仲裁员，目前担任国际商会（ICC）中国国家委员会环境与能源委员会副主席、环太平洋国际律师协会（IPBA）能源与自然资源委员会副主席、中华全国律师协会环境、资源与能源法专业委员会副主任、中华人民共和国环境保护部法律顾问。

作为环境、能源和城市基础设施领域的知名法律专家，王霁虹律师广泛服务于各种能源、自然资源、环境项目，为多个国内外资源、能源项目的融资、并购、争议解决提供法律服务。王律师服务的众多资源、能源客户包括中核集团、中电建集团、中原对外工程公司、中核建、葛洲坝集团、葛洲坝国际公司、雪佛龙、中海油、大唐环境、中国黄金国际资源有限公司、中金国际、中化国际石油有限公司、北京低碳清洁能源研究所、Fuel Tec、Stellar Energy、大唐环境、北排集团、中民新能源等。王霁虹律师曾多次受邀参加环保部重大环境事件的法律论证，参加环保部诸多政策法规的出台、修改与论证。

作为专家级的著名律师，王霁虹律师对项目风险的精准识别与把控，对疑难复杂问题灵活务实的处理能力，深得客户认可和赞扬，多年来连续被国际权威评级机构推荐为杰出律师。