China’s new Ecological and Environmental Code, which came into force on 15 August 2026, is a landmark reorganisation of the country’s environmental legal framework.
It brings together rules that have been tightening for years and places them within a broader economic strategy. The 15th Five-Year Plan for 2026–2030 puts green and low-carbon development among China’s major priorities, while the parallel Beautiful China agenda links pollution control with ecological restoration, resource efficiency and climate policy.
The Code gives that direction a firmer legal foundation. It brings together 1,242 articles, replacing ten major environmental laws while leaving specialist legislation on forests, wetlands, energy and major river basins in place.
For companies, the main consequence is an environmental regime that increasingly treats pollution, carbon and nature as connected business risks.
From environmental approval to ongoing compliance
One of the more consequential changes concerns environmental impact assessment.
Companies must now comply with approved EIA measures during both construction and operation. A plant can therefore be operating normally while drifting away from the environmental assumptions under which it was approved — for example, because its capacity, processes, fuels or raw materials have changed.
The same logic now applies to pollutant-discharge permits: significant operational changes can create approval risks long after a facility begins operating.
Data is becoming a central compliance issue too. The Code strengthens penalties for environmental monitoring fraud and can impose liability on companies, responsible individuals and monitoring providers.
Production records, permit reports, waste information and monitoring data therefore need to be consistent. Gaps or contradictions between them can create regulatory risk in their own right.
Carbon and nature move into the mainstream
The Code brings climate policy more explicitly into environmental law, with provisions on greenhouse-gas accounting, carbon emissions controls, product carbon footprints and China’s national emissions-trading system.
Climate obligations are becoming part of mainstream environmental compliance.
Nature is following the same path.
The Code gives greater prominence to ecological zoning, restoration, natural-resource use, sensitive areas and ecological protection redlines.
For businesses in sectors such as infrastructure, mining, energy and property, this broadens the scope of environmental due diligence. Companies need to consider where a project is located, what ecosystems it may affect and what ecological restrictions apply, alongside conventional pollution risks.
This reflects a wider shift in Chinese policy. Biodiversity, ecosystem condition and natural-resource use are increasingly becoming part of economic planning and investment decisions.
Environmental responsibility is moving into products and supply chains
The Code also pushes environmental obligations beyond individual facilities.
It consolidates rules on cleaner production, recycling, packaging and producer responsibility, including recovery requirements for certain electronics, vehicles and batteries. It also provides a framework for green procurement and supply-chain requirements.
For multinational companies, decisions on materials, packaging, sourcing and product design can therefore create compliance consequences in China. Importers may also face product recovery and phase-out obligations, making environmental compliance relevant to procurement, product development and logistics teams as well as EHS functions.
Foreign-invested companies are subject to the same environmental framework as domestic operators when they operate in China. Certain provisions also reach importers and, under Article 3 of the Code, in some circumstances conduct outside China that causes or may cause environmental harm within the country.
What should companies do?
The immediate priority is to identify where actual operations, environmental data and regulatory approvals have drifted apart.
Companies should check current facilities against EIAs and permits, reconcile environmental and carbon datasets, assess ecological constraints alongside pollution risks, and identify product or supplier obligations that may sit outside traditional EHS functions.
China is bringing pollution, climate and nature into a more coherent system of economic and environmental governance.
For multinational businesses, the immediate risk is operational drift: facilities, products or projects evolving faster than the approvals, data and environmental assumptions that govern them.