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Environmental Protection Series No. 6: Compliance considerations relating to emergency emission reduction during heavily polluted weather conditions

2019.10.24 ZHU, He (George)NI, Tianling (Carey Nee)、Yvonne Wang

Introduction: Emergency emission reduction during heavily polluted weather conditions is an important measure to prevent and control atmospheric pollution. In practice, it is not uncommon for enterprises to be investigated and imposed with administrative penalties due to problems in relation to emergency emission reduction during heavily polluted weather conditions. 


The Ministry of Ecology and Environment of the People’s Republic of China recently issued the 2019-2020 Autumn and Winter Comprehensive Treatment Action Plan in Beijing, Tianjin, Hebei Province and Surrounding Areas. Many regions throughout the country then issued pre-warnings of heavily polluted weather conditions, initiated emergency measures and conducted inspections on enterprises’ implementation of emergency emission reduction.  Due to some of the characteristics of emergency emission reduction during heavily polluted weather conditions, such as the lack of warning, time constraints ,and policy-orientation, enterprises are often unprepared when implementing emission reduction measures or when facing unexpected environmental investigation and administrative punishment. Due to this, we have summarized and edited the regulatory requirements and compliance considerations in respect to emergency emission reduction during heavily polluted weather conditions, with the goal of helping enterprises further enhance their compliance awareness of emergency emission reduction, strengthen management and prevent risks.


I. The legal basis for emergency emission reduction in heavily polluted weather conditions


After the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution made some principle regulations on heavily polluted weather pre-warnings and emergency emission reduction, the State Council and the Ministry of Ecology and Environment respectively promulgated the Three-year Action Plan to Win the Battle for the Protection of Blue Skies in 2018, the Guiding Opinions on Strengthening the Countermeasures to Heavily Polluted Weather Conditions and Consolidating Emergency Emission Reduction Measures and the Technical Guidelines on Formulating Emergency Emission Reduction Measures of Key Industries for Heavily Polluted Weather Conditions (the ‘Technical Guidelines’) in 2019, specifying more detailed emission reduction proportions and emission reduction measures. The abovementioned documents divide heavily polluted weather conditions into three pre-warning levels and stipulate the corresponding requirements on emission reduction proportions: the emergency emission reduction proportions of major pollutants such as sulfur dioxide, nitrogen oxides, particulate matter and volatile organic compounds shall reach more than 10%, 20% and 30% of the emission amount of the whole society respectively during the pre-warning periods of yellow (Level III), orange (Level II) and red (Level I). In practice, different local governments may increase those proportions. 


II. Differentiated management and control requirements on key industry grading


The Technical Guidelines classify 15 key industries (iron and steel, coking, alumina, electrolytic aluminum, carbon, copper smelting, ceramics, glass, lime kilns, foundry, oil refining and petrochemical, pharmaceutical, pesticide, paint, printing ink) into three performance grades, i.e. Grade A, B, and C according to the relevant indicators (such as process equipment levels, fuel types, pollution control technology, emission control and limits, monitoring and control levels and cleanliness of transport methods). Different grades of enterprises in each industry are subject to different emission reduction measures and controls, and enterprises classified as Grade A and Grade B will be published on the website of the relevant authorities at provincial levels. Such performance grading evaluations are related to the different requirements imposed on enterprises in respect of specific emission reduction measures, the frequency of inspections and so on; in general, the emission reduction measures for Grade C enterprises are the most stringent, while Grade A enterprises are not treated, as the focus and the frequency of inspection is reduced. Taking the foundry industry as an example, Grade A enterprises may undertake emission reduction measures at their discretion; Grade B enterprises shall stop all air-pollution-related production processes and are prohibited from using any heavy cargo vehicles (including gas) of national standard IV or below for material transportation during the pre-warning period of orange or above; Grade C enterprises shall stop all air-pollution-related production processes and are prohibited from using any heavy cargo vehicles (including gas) of national standard IV or below for material transportation during the pre-warning period of yellow or above. In addition, non-key industry enterprises shall also carry out differentiated emergency emission reduction, but the control measures for emission reduction shall rely more on the requirements of the local regulatory authorities.


III. Legal consequences of an enterprises’ failure to implement emergency emission reduction measures


The policies and guidelines above mainly focus on raising the requirements for the government to organize emergency emission reduction, but do not directly stipulate the emission reduction measures for enterprises to follow. In practice, many enterprises lack relevant compliance awareness and experience, or have cognitive bias and insufficient experience, which results in a failure to timely or accurately implement emergency emission reduction measures. In recent years, governmental authorities have continued to strengthen the supervision and enforcement of emergency emission reduction targets. With regard to enterprises that ‘fail to implement emergency emission reduction measures’, government authorities may take various regulatory measures, such as issue a notice of criticism, decrease the performance grading of such enterprises, make a record in the enterprises’ credit files and then disclose that information, and impose administrative penalties, or even subject an enterprise to criminal liability. In terms of administrative punishment, according to Article 96 and Article 121 of the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution, enterprises that refuse to implement emergency measures for heavily polluted weather conditions (such as stopping soil and stone work on a construction site or halting building demolition),, may face fines of between RMB 10,000 and RMB 100,000.


IV. How enterprises can prevent compliance risks of emergency emission reduction


Firstly, enterprises should thoroughly study and understand the laws, regulations and regulatory requirements of emergency emission reduction for heavily polluted weather conditions, avoid any non-compliance occurring in the actual implementation caused by misunderstandings, and pay close attention to performance grading evaluations. They should strive for higher management and control grading evaluation by promoting a clean production level, and formulate a ‘one factory one policy’ emergency emission reduction plan. Enterprises should file the list of their emission reduction measures, and publicize specific emergency emission reduction implementation plans in their factories. Meanwhile enterprises should strictly follow the implementation plan, so as to prepare for any emergency emission reduction inspections or investigations by government authorities that may happen from time to time. During the governmental inspection or investigation, enterprises should clarify the relevant facts to avoid any potential misunderstandings, and enterprises should, at the first instance of learning of a governmental inspection or investigation, consider whether to hire professional environmental lawyers and discuss countermeasures, taking into consideration the enterprises’ own experience and the complexity of the subject matter involved.


V. Conclusion and suggestions


Under the current background of the state’s strengthening of the prevention and control of heavily polluted weather conditions and the enforcement of environmental protection laws, in general, enterprises should strengthen their awareness of the laws, regulations and regulatory requirements on emergency emission reduction targets. When facing governmental inspection or investigation, enterprises may protect their own legitimate rights and interests through due process and effective defense under the law. Even in a case where an illegal act exists, enterprises can still strive for an exemption of penalty under legitimate circumstances or apply for the lowest fine within the stated range. The participation of environmental lawyers can help enterprises during different phases such as explanation, hearings, administrative review and administrative litigation. In this regard, we will continue to update you. If you have any specific questions, please e-mail: ecoenvpro@junhe.com.


About JunHe's environmental practice team: JunHe is a premier full service PRC law firm with almost 800 lawyers. It has a pioneer environmental law practice and one of the largest environmental practice teams in China assisting multinational clients in all aspects of EHS matters during project development and joint venture formation, in M&A transactions and daily operation of manufacturing facilities in China as well as compliance, governmental investigation, administrative review and litigation relating to EHS fines and penalties.


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