Subsidies to Coal Production in China

The report identifies 18 subsidies to coal extraction in China for the 2013–2015 period, quantifying 11 of them. For 2013, quantifiable subsidies (excluding credit support) totaled CNY 35.7 billion (USD 5.8 billion). The most significant quantified measures include temporary tax and fee relief from provincial and local governments (USD 1.65 billion), state budget investment in fixed assets (USD 1.27 billion), and compensations for mine shutdowns under phase-out plans (USD 1.03 billion). Credit support is identified as a potentially massive but uncertain subsidy, estimated between CNY 3.5 billion and 35.7 billion annually depending on the scenario. The report argues that these subsidies, particularly those driving long-term investment, lock in coal use and act as barriers to renewable energy deployment.

• In 2013, quantifiable subsidies to coal production in China totaled CNY 35.7 billion (USD 5.8 billion), excluding preferential credit support.
• The most valuable quantified subsidies in 2013 were temporary tax and fee relief from provincial and local governments (USD 1.65 billion), state budget investment in fixed assets (USD 1.27 billion), and compensations for mines shut down under the coal phase-out plan (USD 1.03 billion).
• Credit support is a significant but data-limited subsidy; estimates for 2013 range from CNY 3.5 billion (based on a 0.6% interest rate discount) to CNY 35.68 billion (based on a 5% discount compared to private producers).
• The coal phase-out plan, which uses subsidies to shut down, upgrade, or consolidate mines, reduced the number of mines from over 70,000 in 1995 to under 15,000 by 2013, contributing to improved mine safety.
• Subsidies for coal railway transportation in Inner Mongolia were estimated at approximately CNY 7.2 billion in 2013, representing the most significant subsidy for producers in that province.
• Resource tax reforms implemented in December 2014 shifted the tax from volume-based to value-based (ad valorem), which effectively acted as a subsidy due to low coal prices at the time of implementation.
• The government has provided a fixed annual VAT rebate of CNY 1.71 billion to coal producers since 1995.
• Coalbed methane production received both state budget subsidies (CNY 276 million in 2013) and matching provincial/local subsidies (CNY 0.1/m3), totaling CNY 414 million in 2013.
• Import tariffs were raised in October 2014 for steam coal (6%) and coking coal (3%) to protect domestic producers from international competition.
• State-owned enterprises (SOEs) receive significantly better credit terms than private coal producers, who often face interest rates over 10%.

APA

Xue, H., Wang, H., Bridle, R., Gerasimchuk, I., & Attwood, C. (2015). Subsidies to Coal Production in China. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/subsidies-coal-production-in-china.pdf

Chicago

Xue, Hao, Hanjie Wang, Richard Bridle, Ivetta Gerasimchuk, and Clement Attwood. Subsidies to Coal Production in China. International Institute for Sustainable Development, 2015. https://www.iisd.org/system/files/publications/subsidies-coal-production-in-china.pdf.

Wikipedia

{{cite report |last1=Xue |first1=Hao |last2=Wang |first2=Hanjie |last3=Bridle |first3=Richard |last4=Gerasimchuk |first4=Ivetta |last5=Attwood |first5=Clement |title=Subsidies to Coal Production in China |publisher=International Institute for Sustainable Development |date=December 2015 |url=https://www.iisd.org/system/files/publications/subsidies-coal-production-in-china.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{xue2015subsidies, author = {Xue, Hao and Wang, Hanjie and Bridle, Richard and Gerasimchuk, Ivetta and Attwood, Clement}, title = {{Subsidies to Coal Production in China}}, institution = {International Institute for Sustainable Development}, year = {2015}, month = dec, url = {https://www.iisd.org/system/files/publications/subsidies-coal-production-in-china.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }