China Quickens $11 Billion Fuel Quality Upgrade Amid Smog Fight

China, the world’s largest carbon emitter, has pushed up its timetable for an $11 billion project to improve the quality of fuel used by cars and trucks.

China will cap sulfur content in gasoline and diesel at 10 parts per million starting in 2017, one year before an earlier deadline, the State Council said after a meeting presided over by Premier Li Keqiang. The number of regions expected to adopt the standards next year was also expanded. The plan will cost refiners about 68 billion yuan ($11 billion), the council said.

China has been struggling to fight pollution, a byproduct of the nation’s economic boom over the past 30 years, as dirty air and water generate public discontent. President Xi Jinping pledged in March at the annual session of the National People’s Congress to punish violators of the nation’s environmental laws with an “iron hand.”

China Petrochemical Corp., the nation’s top refiner, said in 2013 it will spend 30 billion yuan annually to improve fuel quality. China National Petroleum Corp. plans to spend 15 billion yuan.

The State Council also announced a trial program to cut import tariffs for some staple consumer goods by the end of June to boost household consumption. China’s cabinet will improve tax policies by adding duty-free shops at customs checkpoints and expanding duty-free categories to facilitate consumption of foreign goods by domestic consumers, it said. The government plans to adjust the consumption tax policy for consumer goods including clothing and cosmetics.

The government will also switch the resource taxes for rare earth, tungsten and molybdenum to a price-based system from a quantity-based one, starting from May 1, according to the statement.

— With assistance by Sarah Chen

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