China sets tariff on low grade coal imports

China has announced a 3 percent import tariff on coal with low calorific value, but details of the new policy remains unclear, local media reports said.

The State Council of China approved last week a proposed 3 percent tariff on lignite imported from countries under the most-favoured nation trade status. The new ruling came into effect on August 30, according to a government statement.

The statement, however, did not specify the grades of lignite that would be affected by the new policy. As such, it remains unclear how the new policy would affect Indonesia, the largest exporter of thermal coal for power stations to China. Reports said China customs officials classify coal with calorific value of between 3,800-4,200 kcal/kg as lignite.

There are questions whether China would truly be able to apply the import tax policy Indonesian on coal as the country has already signed a free trade agreement (FTA) with member countries of the Association of Southeast Asian Nations (ASEAN), which has brought import tariffs for lignited to zero percent since 2012. (*)