Does Energy Tax Subsidy Policy Promote the Development of the Biomass Energy Industry? A Case of Biomass Molding Fuel Industry in China

Global energy crisis and climate change have caused widespread concern about the development of the biomass energy industry. China has committed to exploring feasible policies to promote the development of the biomass energy industry. However, through the partial equilibrium simulation analysis of the impact of existing tax-subsidy policy and optimized tax-subsidy policy on the price, supply-demand, and corporate income of China's biomass molding fuel industry, we found that China's biomass molding-fuel industry is still confronted with the problems of unbalanced regional development, a huge gap between supply and demand and a low level of corporate income. Moreover, it is difficult to meet the 2020 development target at this stage. If China is to achieve the 2020 biomass molding fuel utilization goal set by the government, it needs to adjust the energy tax subsidy policy to a higher level, but such a high level of tax incentives and financial subsidies are not viable in the economic operation. Therefore, to support the sustainable development of the biomass molding fuel industry, relevant departments should not only set the mandatory total target but also pursue production quality and market construction. According to the actual production and consumption capacity of the domestic economy, China’s government should adjust the planning policies for biomass energy production in time.