On March 12, 2026, the Fourth Session of the 14th National People’s Congress voted to adopt the “Ecological Environment Code of the People’s Republic of China.” This is China’s second code named as such and the world’s first specialized code in the field of ecological environment. It will officially come into effect on August 15, 2026, simultaneously repealing several existing individual ecological and environmental laws. This marks the end of fragmented supervision in China’s ecological environment governance, entering a new rule-of-law stage characterized by codification, systematization, and rigidity.
This Code is not a simple compilation of existing environmental laws, but a comprehensive reconstruction of ecological environment supervision, green and low-carbon development, and legal liability. It focuses on two core priorities: integrating “Dual Carbon” goals into a dedicated chapter as a statutory mandatory obligation, and significantly increasing the cost of environmental violations with stricter accountability and a broader scope, forcing enterprises to strengthen full-process compliance management.
I. Core Overview of the Code: 1,242 Articles Building a Full-Chain Ecological Legal Barrier
The “Ecological Environment Code” consists of five major sections: General Provisions, Pollution Prevention and Control, Ecological Protection, Green and Low-Carbon Development, Legal Liability, and Supplementary Provisions. With a total of 1,242 articles, it achieves closed-loop supervision over all ecological elements such as atmosphere, water, soil, solid waste, and greenhouse gas emissions, as well as the entire process of project initiation, production operations, end-of-pipe disposal, and illegal accountability.
Compared to previous scattered individual environmental laws, the Code’s greatest legislative breakthrough is the establishment of the Fourth Book: Green and Low-Carbon Development, which directly incorporates the core systems of Carbon Peaking and Carbon Neutrality into the main text. Simultaneously, through the Fifth Book: Legal Liability, it sets stricter and more comprehensive penalty clauses corresponding to the statutory obligations in the preceding books. This truly achieves “statutory obligations, equivalent responsibilities, and closed-loop supervision,” using the most rigorous codification to fortify the ecological environment’s legal barrier and define clear compliance red lines for enterprises.
II. Clarification in the Fourth Book: Full Legalization of Dual Carbon Policies; Green Transformation is a Statutory Obligation
Previously, enterprises promoted carbon reduction and implemented dual carbon requirements mostly through policy guidance and market incentives, which had relatively weak binding force. However, the Fourth Book of the “Ecological Environment Code,”
“Green and Low-Carbon Development,” includes a dedicated chapter on addressing climate change, elevating all core dual carbon systems to mandatory obligations explicitly stipulated in the Code. This thoroughly clarifies the statutory responsibility of enterprises for low-carbon reduction. Refusal to transform, illegal excessive emissions, and data falsification are all violations of the Code and will directly trigger the corresponding legal liabilities in the Fifth Book, leaving no room for enterprises to take chances.
III. Legalization of Dual Carbon Policies: Green Transformation is No Longer Optional, but Mandatory
In the past, corporate carbon reduction and green transformation relied heavily on policy guidance and market drivers. Now, the “Ecological Environment Code” upgrades the core dual carbon systems to rigid legal constraints, using the power of the rule of law to define the baseline for low-carbon development. This forces market entities to accelerate green transformation, as refusal to transform or illegal excessive emissions will inevitably face severe legal punishment.
Core Dual Carbon Systems Integrated into the Code, Fully Legalizing Obligations: According to Articles 1032 to 1039 of the Code, the state has officially established a dual control system for total carbon emissions and intensity, a national carbon emissions trading market, and a voluntary greenhouse gas emission reduction trading mechanism, all of which are fixed in the form of the Code. The Code explicitly requires that key emission units included in the carbon market must carry out carbon emission accounting, monitoring, and reporting in accordance with the law, and fully clear their allowances. Enterprises bear full responsibility for the authenticity and accuracy of data. Concealing, under-reporting, or tampering with carbon emission data is no longer a simple rectification issue but a violation of the Code that will be prosecuted according to the law.
Low-Carbon Requirements Integrated into the Entire Production Process, with Full-Process Constraints: The Code integrates green and low-carbon requirements throughout the entire chain of pollution prevention and project construction. It explicitly requires enterprises to prioritize energy-saving and carbon-reducing processes and equipment, strictly control the expansion of high-energy-consuming and high-emission projects, and incorporate low-carbon compliance into the entire production and operation process. Traditional high-energy-consuming and high-emission enterprises must formulate carbon reduction plans and build internal carbon management systems in accordance with the Code’s requirements; this is a statutory obligation imposed by the Code, not a voluntary choice.
Parallel Incentives and Constraints: Compliant Parties Benefit, Violators are Punished: On one hand, the Code clarifies policy support such as fiscal, tax, credit, and government procurement for enterprises with significant energy-saving and carbon-reduction results and green technological innovation. On the other hand, for failure to fulfill low-carbon obligations or exceeding carbon emission standards with a refusal to rectify, the Fifth Book on Legal Liability specifies corresponding penalty clauses. Measures such as fines, production restrictions or suspensions, and credit sanctions can be taken, making green and low-carbon capabilities a core competitiveness for enterprises to meet the Code’s requirements. Core tip: Dual carbon is no longer a “bonus item” for enterprises, but a statutory mandatory requirement clearly defined in the Fourth Book of the “Ecological Environment Code.” Enterprises must refer to the articles of the Code to establish internal carbon management ledgers as soon as possible, improve carbon emission monitoring facilities, and actively align with carbon trading compliance requirements to avoid crossing legal red lines due to violations of dual carbon-related laws.
IV. Rigid Strengthening of the Fifth Book: Environmental Violation Costs Soar, Accountability Leaves No Blind Spots
The most prominent feature of the “Ecological Environment Code” is the comprehensive increase in the cost of environmental violations. For common corporate behaviors such as exceeding emission standards, tampering with monitoring data, refusing to rectify, and illegal disposal of hazardous waste, the Code significantly raises the maximum fine, expands the scope of consecutive daily penalties, and builds a triple accountability system of administrative, civil, and criminal liability. A single violation leads to restrictions everywhere, with the cost far exceeding the cost of rectification.
1. Significant Increase in Fine Amounts, Maximum Penalties Become the Norm
The Fifth Book of the Code integrates and significantly increases fine standards for various environmental violations, setting tiered fines based on the severity of the violation. For common behaviors such as exceeding emissions, discharging without a permit, and illegal disposal of solid waste, the fine amounts are significantly higher than in previous individual laws, with the maximum fine for some serious violations reaching millions of yuan. For malicious acts such as illegal transfer and dumping of hazardous waste, illegal cross-border discharge, and malicious destruction of the ecology, the Code further strengthens the intensity of maximum penalties to completely eliminate the erroneous mindset of “paying fines in exchange for discharging.”
2. Expansion of Consecutive Daily Penalties, Snowballing Costs for Persistent Violations
According to Article 1060 of the Code, if an enterprise is ordered to rectify illegal discharges but refuses to do so and continues the violation, consecutive daily penalties based on the original fine amount will be applied starting from the day after the rectification order, with no upper limit. Simultaneously, the Code authorizes local regulations to add new types of violations subject to consecutive daily penalties. This means that enterprises delaying rectification or responding passively will face massive daily accumulating fines. The previous model of
“one fine for long-term violation” directly violates the Code, and the cost will grow geometrically.
3. Superimposed Multiple Accountabilities, Personnel Held Accountable Simultaneously
Article 1064 of the Code clarifies the “dual punishment system” principle. In the event of an environmental violation by an enterprise, in addition to the entity itself bearing responsibilities such as fines, production restrictions, or closure, the legal representative, main person in charge, directly responsible supervisors, and directly responsible personnel will simultaneously face fines and administrative sanctions. If a crime is committed, criminal responsibility will be pursued according to the law. At the same time, the Code requires enterprises to bear responsibility for ecological environment damage compensation, repairing the damaged environment or providing full compensation, achieving a triple accountability of
“fining the enterprise + pursuing the individual + compensating the ecology,” fully implementing equivalent responsibilities in accordance with the Code’s obligations.
4. Linked Credit Sanctions, One Violation Leads to Restrictions Everywhere
The Code fully links environmental violations with credit sanctions. Violations will be recorded in the enterprise’s credit record and included in the national credit information sharing platform. Violating enterprises will face joint sanctions such as government procurement restrictions, tightening of financing and credit, cancellation of bidding qualifications, and revocation of honors and qualifications, directly affecting the enterprise’s listing, brand reputation, and daily operations. This credit constraint mechanism ensures that enterprises violating the Code not only bear the cost of immediate punishment but also face long-term development restrictions. Compliance is the core of long-term operation.
V. Enterprise Response Guide: Strengthen Internal Management and Build a Compliance Defense Line
With less than five months remaining until the official implementation of the “Ecological Environment Code,” the countdown for corporate compliance rectification has begun. All production and operation units must fully align with the articles of the Code, identify their own environmental and dual carbon compliance loopholes, and build an internal full-process management system that meets the Code’s requirements. Focus on four major areas to implement rectification and actively adapt to the Code’s regulatory requirements to avoid crossing legal red lines:
Conduct Compliance Self-Inspections Against the Full Text of the Code to Identify Risks: Refer to the core articles of the Pollution Prevention and Control Book, the Green and Low-Carbon Development Book, and the Legal Liability Book. For key links such as discharge permits, exhaust gas and wastewater disposal, hazardous waste management, carbon emission monitoring, and environmental facility operation, check item by item whether they comply with the Code’s requirements. Establish a problem ledger and complete closed-loop rectification within a time limit to completely eliminate legacy compliance risks.
Improve Internal Systems Based on Code Obligations and Consolidate Hierarchical Responsibilities: According to the Code’s provisions, establish a dedicated environmental and carbon management responsibility system. Clarify the three levels of responsibility: management, workshop, and post. Appoint full-time environmental management personnel and improve internal systems for environmental facility operation and maintenance, carbon emission data management, emergency response, and compliance self-inspection. Ensure that every obligation in the Code is implemented by a designated person with full-process records to prevent responsibility gaps.
Upgrade Hardware Facilities Against Code Standards to Fill Compliance Gaps: Increase environmental investment, phase out backward processes and equipment that do not meet the Code’s requirements, and improve treatment facilities for exhaust gas, wastewater, and solid waste to ensure compliant discharge. Simultaneously, in accordance with the Code’s green and low-carbon development requirements, build a carbon emission monitoring and accounting system and promote energy-saving and carbon-reduction technological transformation to meet the Code’s dual mandatory standards for environmental protection and dual carbon from a hardware perspective.
Conduct Staff Training on Code Articles to Build Compliance Awareness: Organize all staff to study the core articles of the “Ecological Environment Code,” with focused training for front-line production personnel, environmental protection officers, and core management personnel. Clarify the legal consequences of violating the Code, eliminate behaviors such as illegal operations and opportunistic discharging, and ensure that the concept of “legal compliance, green and low-carbon” fully aligns with the Code’s requirements and is integrated into every aspect of production and operation.
Conclusion
The Code will come into effect on August 15, 2026, and compliance rectification is urgent. Do not let environmental violations become a “stumbling block” to corporate development. Enterprises must proactively comply and strive for green transformation and sustainable development.
Source: Ecological Environment Code of the People’s Republic of China
