On October 30, China’s National Energy Administration unveiled the country’s first comprehensive policy for shale gas industry, pledging to increase financial support for shale gas producers and follow a marketized pricing mechanism to encourage trading of shale gas.

The policy, to take effect immediately, puts shale gas under the category of “national strategic emerging industries”, highlighting its important status in national economy.

Under the policy, central and local governments will provide a range of financial support to shale gas producers from subsidies to tax reductions or exemptions. As an example, customs tariff will be exempted for imported equipment to promote technological advancement.

Meanwhile, government encourages public and private investors to engage in the exploration, extraction and trading of shale gas, promising to create an open and fair market for investors. Shale gas will be priced according to market demand and supply.

The policy also calls for construction of natural gas pipelines and LNG infrastructures across the country.

In addition, the policy emphasizes that environment should be protected in the exploration and production process.

China claims the world’s largest shale gas reserves, estimated at 36 trillion cubic meters, of which 25 trillion is extractable, 50 percent larger than those of the U.S.

China wants to reach an annual output of 6.5 billion cubic meters of shale gas by 2015, up from 200 million cubic meters in 2013.