China Adopts Ecological and Environmental Code: What Do You Need to Know

Introduction

On March 12, 2026, the Fourth Session of the 14th National People’s Congress formally adopted the Ecological and Environmental Code of the People’s Republic of China (hereinafter, the “Code”), which will come into effect on August 15, 2026. This milestone marks China’s first unified legal framework dedicated to ecological and environmental protection, signaling a fundamental shift in environmental governance and chemical regulation.

About China's First Ecological and Environmental Code

The Ecological and Environmental Code represents both a legislative innovation and a cornerstone of China’s modern ecological civilization. By consolidating ten existing environmental laws into a single, coherent legal framework, the Code transforms fragmented regulatory requirements into a unified, authoritative system.

At its core, the Code embodies the principle of “lucid waters and lush mountains are invaluable assets,” legally reinforcing the sustainable development goals of China’s ecological civilization.

As highlighted at the 14th NPC session: “Ecological civilization is crucial to the sustainable development of the Chinese nation.”

For businesses, particularly in the chemical sector, this means the era of “produce first, treat later” or “trial-and-error production” is officially over. Source-level environmental risk management is now the legal baseline.

Core Changes Introduced by China's New Green Code

The Code contains five sections with 1,242 articles, covering:

• General Provisions

• Pollution Prevention and Control

• Ecological Protection

• Green and Low-Carbon Development

• Legal Liability and Supplementary Provisions

The new Code consolidates multiple individual environmental laws into a unified, forward-looking framework, explicitly addressing chemical pollution, new pollutants, and climate risks, while strengthening enforceable liabilities to ensure stricter compliance across industries.

Key Provisions for Chemical Substance Management

For chemical enterprises, the most consequential changes lie in Chapter 34 of Section II, which establishes a framework for chemical substance pollution risk control.

• New Pollutant Control System (Article 645): The Code mandates the creation of a coordinated control and environmental risk management system for new pollutants, including persistent organic pollutants (POPs).

• Information Investigation System (Article 647): The Ministry of Ecology and Environment (MEE) will conduct periodic surveys of chemical pollution. Companies involved in production, import, sale, or use of chemicals must report physicochemical properties, quantities, uses, hazard characteristics, and emissions.

• Key Control Substance List (Article 649): Authorities will assess chemical pollution risks and establish a Key Control New Pollutant List, specifying chemicals that are banned, restricted, or otherwise regulated.

• New Chemical Substance Environmental Management Registration (Article 650): Companies producing or importing new chemical substances must apply for environmental management registration with MEE before production or import.

Stricter Administrative Penalties for Chemical Compliance Violations

The Code significantly raises the stakes for violations, introducing stricter fines and administrative measures than prior regulations such as the Measures for Environmental Management Registration of New Chemical Substances. Key provisions include:

Violation of Prohibition or Restriction Measures for Key Controlled New Pollutants (Article 1205)

• Violation:
  Producing, importing, or using chemical substances listed in the Key Control New Pollutant List without complying with the applicable prohibition or restriction measures for environmental risk control.

• Fines:
  RMB 100,000 to 500,000.
  If the violation is not corrected, additional fines of RMB 500,000 to 1,000,000 may be imposed.

• Administrative Measures:
  Authorities may order production restrictions or suspension for rectification.
  In serious cases, business operations may be suspended or facilities may be shut down.

Violation of Requirements under the Environmental Management Registration Certificate for New Chemical Substances (Article 1206)

• Violation:
  Producing or importing a new chemical substance in violation of the conditions specified in the registration certificate, such as exceeding the approved quantity or changing the approved use.

• Fines:
  RMB 200,000 to 1,000,000.
  If the violation is not corrected, additional fines of RMB 1,000,000 to 2,000,000 may be imposed.

• Administrative Measures:
  Authorities may order production restrictions or suspension for rectification.
  In serious cases, the registration certificate may be revoked, and companies may be ordered to cease operations or shut down.

Production or Import Without Environmental Management Registration for New Chemical Substances (Article 1207)

• Violation:
  Producing or importing new chemical substances without obtaining the required environmental management registration, or manufacturing products using unregistered new chemical substances.

• Fines:
  Same penalty range as above, with fines up to RMB 2,000,000, along with orders for production restriction or suspension for rectification.

• Administrative Measures:
  Authorities may impose production restrictions or suspension.
  In serious cases, companies may be ordered to cease operations or shut down.

• Joint Liability:
  Downstream companies that use unregistered raw materials may also face substantial fines and the risk of production suspension.

The New Code's Challenges for Chemical Enterprises

The Code fundamentally changes operational and compliance landscapes for chemical companies, especially those handling new chemical substances:

Soaring Violation Costs

Maximum fines now reach RMB 2 million, with possible production suspension or facility shutdown, compared with prior maximum fines of RMB 30,000 under the old registration rules.

Extended Compliance Timelines

Registration of new chemicals may require toxicological and ecotoxicological data, lengthening product development cycles and increasing costs.

Supply Chain Traceability Pressure

Companies must ensure all chemicals, including restricted and new substances, are compliant, or risk joint liability.

Dynamic Regulatory Uncertainty

Chemicals not currently listed may be added to the Key Control Substance List after risk assessment, potentially forcing product reformulation or withdrawal.

REACH24H's Recommendations for Chemical Businesses

To navigate the Code’s stringent requirements, chemical enterprises should shift from reactive to proactive compliance and implement risk-based chemical management systems:

Lifecycle Management

Incorporate environmental risk assessment from the R&D stage. Verify new raw materials against the Inventory of Existing Chemical Substances in China (IECSC) to determine registration requirements.

Compliance Audits and Data Management

Conduct regular internal environmental compliance audits and maintain comprehensive chemical substance inventories to satisfy MEE surveys and inspections.

Technical Expertise

Employ or train dedicated chemical compliance professionals, and collaborate with third-party risk assessment agencies to ensure accurate submissions.

Monitor Policy and List Updates

Track updates to chemical substance lists and Key Control New Pollutant List. Strategically develop substitute chemicals to reduce regulatory risks at the source.

Conclusion

The adoption of the Ecological Environment Code signals a new era in China’s legal governance and represents a paradigm shift for the chemical industry.

For chemical enterprises, it is both a challenge and an opportunity: those that integrate environmental risk management into strategic planning and operations will not only achieve regulatory compliance but also drive green and low-carbon transformation, securing long-term competitive advantage in a rapidly tightening regulatory landscape.