China will earmark more funds to further exploit its coalbed methane reserves amid increased efforts to step up new energy exploration.

The Chinese Government will allocate more money from the central budget to encourage the inflow of private capital for this emerging energy sector, according to an industrial policy outline released online by the National Energy Administration on March 11.

Preferential measures include more financing for enterprises and improving gas pricing mechanisms.

China plans to complete the construction of two major production bases in the central and western regions in 2015, and increase the number from three to five in the next five to 10 years.

The Ministry of Land and Resources said previously that the country aims to produce 16 billion cubic meters of coalbed methane and put 7.4 billion cubic meters into use in 2013.

China's coalbed methane reserves are estimated at 36.8 trillion cubic meters, the third largest in the world after Russia and Canada.