China to Suspend Urban Land Use Tax Collection to Promote Shale gas, CBM

China is expected to suspend collection of urban land use tax to support the development of shale gas and coal bed methane (CBM) starting July 1, Xinhua Finance reported citing a notice issued by the Ministry of Finance on Monday.

Temporary use of land for geological exploration, drilling, downhole operation, and surface projects with oil and gas fields would be exempt from collection of urban land use tax, the news agency said adding that use of land for special railways, roads and pipelines and outside plants and factories would be free from urban land use tax temporarily.

Land used for long-distance pipelines also would be exempted from collection of urban land use tax temporarily, Xinhua Finance added.

China is keen to boost investment in unconventional hydrocarbon space to meet its growing domestic energy demand. The country has set ambitious target for shale gas production. Beijing aims to increase shale gas output to 30 billion cubic meters by 2020.

According to statistics from China Geological Survey, China added 106.75 billion cubic meters of proved shale gas reserve in 2014, and total shale gas output hit 1.3 billion cubic meters in the year.