China: 30 Percent of State Vehicles Must Be 'Green' by 2016

Jul 14, 2014 05:00 PM EDT | Jordan Ecarma

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China is hiking regulations when it comes to green vehicles as officials continue to battle smog in major cities like Beijing.  

The country has announced a mandate that electric cars compose at least 30 percent of vehicles purchased by the Chinese government by 2016, Bloomberg News reported. After 2016, the ratio of green vehicles to traditional, completely gasoline-powered autos will change again when local provinces fall under the restriction.

While requiring 30 percent of government vehicles to be electric is a step forward, it may not actually do much to clear China's skies.

"This is a laudable aspiration," said Yang Song, a Hong Kong-based analyst at Barclays Plc, as quoted by Bloomberg News.

The analyst estimates that government car purchases constitute less than 10 percent of total new vehicle sales in China, telling Bloomberg News, "Government purchases are not growing as fast as private consumption. So just to rely on the government purchase would be a challenge."

China has also been introducing various incentives to encourage the purchase of green vehicles including electric, hydrogen and plug-in hybrid autos. The central government last week announced a waiver of a 10 percent purchase tax for "new-energy" vehicles. The tax exemption starts Sept. 1 and goes to the end of 2017.

Dangerous levels of smog caused Beijing officials to issue an "orange" alert in February.

"China's pollution is at an unbearable stage," Li Junfeng, director general of the National Center for Climate Change Strategy and International Cooperation, said at the time, as quoted by Bloomberg. "It's like a smoker who needs to quit smoking at once otherwise he will risk getting lung cancer."

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