China is to cut value added tax (VAT) on dimethyl ether (DME) from 17% to 13%, effective 1 July, an official from the Finance Ministry said. The tax cut was part of a government drive to promote DME, which was a low cost fuel with low carbon emissions, as the “next generation” fuel for China, the official added. About 90% of the DME produced and blended with liquefied petroleum gas (LPG) is consumed as household fuel.