Environment Protection Law in China & Compliance Requirements

Manufacturing sector pollution is big news in China and is attracting the government’s attention now like never before. The environmental issues took a backseat for the last decade as China rapidly involved in its industrial expansion. However, becoming a major manufacturing powerhouse of the world, has its drawbacks. Rapid urbanization, population growth, and explosive industrial development have led to the worsening of air, water, and land pollution. Due to increasingly serious air pollution, many Chinese cities have been adversely affected by hazy weather.

Central China, eastern and south China are the most affected districts, especially the Yangtze River Delta including Shanghai. Beijing – along with dozens of other Chinese cities – was in the middle of an air pollution crisis.

Smog-plagued Beijing-Tianjin-Hebei area of China has woken up the Chinese government and now they are taking credible and visible action to improve the environment all across the country. For the past several years, Beijing has made a concerted effort to reduce high concentrations of air pollution across China.

Environmental Protection Tax Law of China

China is trying to reposition itself as a green power. In December 2016, the National People’s Congress promulgated China’s first Environmental Protection Tax Law (the EPT Law), replacing the existing Pollutant Discharge Fees (PDF) system in a bid to strengthen the enforcement of environmental regulations.

A major campaign against environmental violations has so far penalized more than 30,000 companies and over 5,700 officials. An unprecedented crackdown on non-compliant manufacturers has created havoc for businesses sourcing products from China. Because of this, enterprises producing contaminants and new market entrants need to understand the new developments in order to better prepare for future compliance requirements.

According to the Environmental Protection Tax Law of China, air pollution, water pollution, solid wastes and noise are the four major categories of taxable emissions. While the levied items are to remain the same as the previous fee system, the law designates the local tax bureaus as collators of the new environmental protection tax.

China’s air pollution inspections are expected to hit more regions. Unlike the previous 2017 Action Plan, the new 2020 Action Plan stipulates air pollution inspections that are not limited to the Beijing-Tianjin-Hebei region, but will also include Shanghai and cities in Jiangsu, Zhejiang, Anhui, Shanxi, and Shaanxi provinces.

The Chinese government has taken steps to broaden its campaign against air pollution, including extending a monthly air quality ranking to 169 cities from 74 to pressure local authorities to clean up dirty skies. China has instituted policies and rules governing the amount of pollutants a company can emit.

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