Singapore (Platts)--4Sep2008

China's long-awaited new energy law has not yet been submitted to the
State Council due to the reorganization of government's institutions early
this year, a source close to the National Development and Reform Commission
said Thursday at the 2008 China power, oil and gas conference in Guangzhou,
south China.

"The public consultation of the draft new energy law finished early this
year, in late-February, but the draft law is still held in the National Energy
Administration, which was recently [created] to strengthen the government's
management of the energy sector," the source said.

"There is no detailed timetable of submission yet," the source added.
The new energy law was drafted in 2006 and circulated for public
consultation in December 2007.

"The earliest effective time of the new energy law is expected in 2009,"
said another industry source from the conference.

The draft of the new energy law covers all forms of primary energy,
including coal, oil, natural gas, renewable energy and nuclear energy, and
also secondary energy, which includes electricity, thermal power and petroleum
products.

The law would guide and co-ordinate other laws in China's energy sector.
In addition, the draft also covers specific energy laws such as the
Renewable Energy Law, Energy Conservation Law and the Electric Power Law and
their associated regulations and measures.

All parties involved in the development, use and administration of
energy, including renewable energy, are expected to be affected by the new
energy law, according to market sources.

According to the draft law, China will establish energy pricing systems
mainly determined by market forces, and reduce government's regulation of
prices. "Pricing should reflect the scarcity of resources and costs of
damaging the environment," according to the draft law.

The government will also adopt tax policies encouraging development and
use of renewable energy, energy-saving products and imports of related
technologies.

It will improve the energy resource tax regime and expand consumption
taxes to adjust energy consumption and promote efficient use, according to the
draft law.