China's environmental protection spending is expected to top 3 trillion yuan ($450 billion) during the 12th Five-Year Plan (2011-2015), said Wu Xiaoqing, vice-minister of environment protection, the 21st Century Economic Herald reported Friday.

Wu said China's environmental protection market will become one of the biggest in the world with an annual growth rate of 15 percent to 20 percent.

On Nov 25, the State Council has approved a plan for the development of energy-saving and environmental protection industries in the next five years, the report said. The plan covers three industries – energy saving, environmental protection and resource recycling, said He Bingguang, inspector at the department of resource conservation and environmental protection at the National Development and Reform Commission.

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According to the plan, the development of energy-saving and environmental-protection equipment is a top priority in the next five years.

The central government has allocated 210 billion yuan, as part of its 4 trillion yuan economic stimulus plan, to energy-saving, emission reduction, recycling and ecologically sound construction projects, the report said.

In addition, Xia Guang, head of policy research office at the Ministry of Environmental Protection told the newspaper that the plan is an advisory document and relevant rules on finances and taxation for these industries will come out soon.

Companies in energy-saving or environmental protection industries are enjoying preferential policies according to the current tax regulations and policy makers are considering further cutting their income taxes by 50 percent, the report said.