CBM subsidy standards will increase

After many years of silence, China's coalbed methane industry may usher in a spring of renewed awakening. The General Office of the State Council issued the "Opinions on Further Accelerating Gas Drainage and Utilization in Coalbed Methane Coal Mines", clarifying that subsidies for CBM mining will be further improved, market pricing will be implemented, CBM power generation will be encouraged to access the Internet, and feed-in tariffs will be raised in due course.

The industry believes that this opinion is called the most "powerful" CBM policy to date, and the next step is to focus on the specific implementation details of the opinions. In the short to medium term, the increase in exploration and development will bring in a large influx of investment, which will directly benefit related technology and equipment suppliers.

Subsidy standards will increase

In March of this year, the National Energy Administration issued the "CBM Industry Policy", which initially clarified the relationship between coal and coalbed methane resources, and proposed to accelerate and properly solve the problem of overlapping coalbed methane and coal mining rights, and form a coordinated development mechanism for coalbed methane and coal resources. . This policy is considered to be a major step forward in addressing the “unclear property rights” of CBM development.

The opinions issued by the State Council focus on further strengthening the use of financial funds, strengthening tax and fee policy support, improving CBM prices and power generation access policies, and further exploiting and exploiting CBM. Among them, raising the subsidy standard for coalbed methane mining is the most attractive.

The opinion puts forward that it is necessary to comprehensively consider factors such as extraction and utilization costs and market sales prices to improve the central government subsidy standards for the development and utilization of gas in coalbed methane mines.

At present, Chinese enterprises develop and utilize coalbed methane, and the central government subsidizes 0.2 yuan per cubic meter. Since 2007, the cumulative subsidy has reached 720 million yuan. At the same time, the local subsidies for the development and utilization of coalbed methane per cubic meter are 0.1 yuan. According to industry sources, the standard plan for subsidies for coalbed methane extraction has taken shape and will be raised from the current 0.2 yuan/square to 0.6 yuan/square. This may be an important reference for raising the subsidy standard proposed in this opinion.

In addition, future CBM development will also receive tax benefits. The opinion pointed out that it will speed up the reform of business tax to VAT reform, expand the scope of VAT input tax deduction for coal mine enterprises, and study and formulate the VAT preferential policy for CBM power generation; increase the income tax concessions, and finance subsidies for CBM development and utilization. As regards the provisions on the treatment of enterprise income tax for special purpose fiscal funds, it shall be treated as non-taxable income of corporate income tax. The Ministry of Finance, the State Administration of Taxation, the General Administration of Safety Supervision and other departments have promptly revised and improved the list of corporate income tax concessions for special equipment for safety production.

Market loosening

It is worth noting that the opinions released this time have also made great breakthroughs on the road of “marketization” development and utilization of coalbed methane. The opinion puts forward that the pricing mechanism of the CBM market should be implemented. All localities must strictly implement the policy of releasing the ex-factory price of coalbed methane, which has been included in the management of local governments to release the price as soon as possible. The sales price of the urban public pipe network that has not entered the city is negotiated and priced by the supply and demand sides. The sales price of coal-bed methane entering the urban public pipe network is Not less than the same calorific value of natural gas prices.

At the same time, it is necessary to support coal-bed methane power generation, coal mines use coal-bed methane to generate electricity for their own use, and surplus electricity needs to be connected to the Internet, which will be acquired by power grid enterprises; further simplify the procedures for coal-bed methane power generation grid-connected projects, speed up the review and handling; The power generation price policy, in accordance with the principle of reasonable cost plus reasonable profit, timely increase the benchmark price of coal-bed methane power generation.

The industry believes that for a long time, the low price of natural gas is another major constraint that leads to insufficient coalbed methane mining. According to the opinion, in the future, coalbed methane will be market-priced in the same way as shale gas. In addition, since July this year, various localities have increased the price of non-residential natural gas thresholds, and the development of coalbed methane will be “profitable”.

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