The Pollutant Discharge Permit System is how the Ministry of Ecology and Environment in China monitors and enforces legal restrictions on polluting entities and polluting behaviors.While it boasts a major role in the Chinese environmental governance system, in its early stages its rollout was hampered by inadequate legal support and unclear positioning. However, its reformation was placed back on the agenda in 2014 with the passing of the Environmental Protection Law, which mandated a permit-based system for managing pollutant discharge on a national level. As a result, the Pollutant Discharge Permit System was overhauled, deepened and strengthened during the 13th Five-Year Plan (2016-2020). The State Council issued the Implementation Plan for Issuing Permits to Control Pollutant Discharge in the first year of the 13th Five-Year Plan, which outlined the real work on the system which was to begin the following year (2017). Part of that work was the establishment of a regularly updated and re-issued Register of Pollutant Discharge Permits for Fixed Sources of Pollution, which defined over 70 Pollutant Discharge Permit applications and core technology standards, and by the end of 2020 Pollutant Discharge Permits had basically been issued to all fixed sources of pollution, meeting development targets.
Despite the progress that has been made, the core Pollutant Discharge Permit System is yet to be properly integrated with other relevant systems. On top of this, the issuing of the permits themselves needs to improve, as does the system for monitoring those already issued. More enterprises need to be made aware of permitted and evidence-based pollutant discharge, and more resources need to be provided to monitor cure periods and such when illegal discharge is found.
The State Council has introduced the Regulation on the Administration of Pollutant Discharge Permits during the 14th Five-Year Plan to solve these problems. The Regulation integrates brings disparate environmental management systems together and integrates them into one Ecology and Environmental Protection System, with Pollutant Discharge Permits at its core. In addition, the Ministry of Ecology and Environment has issued Guiding Opinions on the Strengthening of Enforcement and Monitoring of Pollutant Discharge Permits which focus on regional government implementation of their ecology and environmental protection responsibilities, their issuing and management of Pollutant Discharge Permits, the affiliated resources available for their enforcement and monitoring of Pollutant Discharge Permits, regulatory safeguards and other such aspects. The Implementation Plan for Pollutant Discharge Permit Work and Environmental Impact Assessments during the 14th Five-Year Plan issued by the same ministry further clarifies the details, timing, pathways and other aspects of the Pollutant Discharge Permit work to be completed during the 14th Five-Year Plan.
1. Major Policies, Regulations and Standards released in Recent Years
A summary of all major new Pollutant Discharge Permit System policies, regulations and standards issued by the Chinese Central Government in the last year can be found below.
Table 1 Major New Pollutant Discharge Permit System Policies Post-2020
| Document Name | Issue Date | Issuing Authority |
|---|---|---|
| Technical Specifications for the Application and Issue of Pollutant Discharge Permits (76 industries inc. the thermal power industry, iron and steel industry, cement industry, and petrochemical industry) | December 2016 – April 2020 | Ministry of Ecology and Environment |
| Guidelines for the Registration of Pollutants discharged by Fixed Sources of Pollution (Pilot Implementation) | January 2020 | Ministry of Ecology and Environment |
| Notice on the Work needed to Properly Integrate the Environmental Impact Assessment System with the Pollutant Discharge Permit System | November 2020 | Ministry of Ecology and Environment |
| Implementation Plan for the Construction of a Fixed Pollution Source Monitoring System with the Pollutant Discharge Permit System at its Core | December 2020 | Ministry of Ecology and Environment |
| Regulation on the Administration of Pollutant Discharge Permits | January 2021 | State Council |
| Guiding Opinions on the Strengthening of Enforcement and Monitoring of Pollutant Discharge Permits | March 2022 | Ministry of Ecology and Environment |
| Implementation Plan for Pollutant Discharge Permit Work and Environmental Impact Assessments during the 14th Five-Year Plan | April 2022 | Ministry of Ecology and Environment |
1.1 The 14th Five-Year Plan: Major Pollutant Discharge Permit System Targets and Tasks
The State Council issued demands for the implementation of a new-age Pollutant Discharge Permit System with the introduction of the Regulation on the Administration of Pollutant Discharge Permits on January 24, 2021. The Regulation is intended to strengthen Pollutant Discharge Permit management, standardize the pollutant discharge behavior of enterprises and other manufacturing managers, and control polluting emissions. The Implementation Plan for Pollutant Discharge Permit Work and Environmental Impact Assessments during the 14th Five-Year Plan was then issued by the Ministry of Ecology and Environment in April 2022 to build upon the Pollutant Discharge Permit system established during the 13th Five-Year Plan and clarify the tasks and targets to be achieved during the 14th Five-Year Plan.
- State Council Regulation on the Administration of Pollutant Discharge Permits (January 24, 2021)
- Ministry of Ecology and Environment Implementation Plan for Pollutant Discharge Permit Work and Environmental Impact Assessments during the 14th Five-Year Plan (April 01, 2022)
(1) Major Targets
To further stabilize the core Pollutant Discharge Permit System. Implement full factor and whole-life management of Pollutant Discharge Permits for fixed sources of pollution. Create a Pollutant Discharge Permit enforcement and monitoring system and self-monitoring mechanisms for fixed sources of pollution. Implement ‘Single Permit’ management for Pollutant Discharge Permits. Lay the foundation for a system to oversee fixed sources of pollution with the Pollutant Discharge Permit System at its core.
To further enrich the system with innovations. Take the first steps towards establishing a closed management system for Pollutant Discharge Permits, enforcement, and other related systems. Further improve the Environmental Impact Assessment (EIA) and Pollutant Discharge Permit Credit Management systems and completely standardize the third-party services market.
To further strengthen fundamental protections. Effectively drive the integration of Environmental Assessment and Pollutant Discharge Permit information and industry co-operation. Continue to expand the functionality of the Pollutant Discharge Permit Information System. Implement smart duplicate checking for all EIA documentation. Continue to improve the level of informatization construction and applicability.
(2) Major Tasks
Consolidate Pollutant Discharge Permit Coverage over All Fixed Sources of Pollution Add requirements for the environmental management of industrial solid wastes. Include entities such as those discharging industrial noise pollution and marine work pollution in the Pollutant Discharge Permit System.
Facilitate Complete Linkage between All Ecology and Environment Management Systems. Research the establishment of an appropriate EIA management system for pollution-producing work with Pollutant Discharge Permits at its core. Enforce legal obligations regarding the discharge of pollutants on enterprises and institutions. Implement a Pollutant Discharge Permit integration pilot for key industries in carefully selected locations.
Strengthen the Enforcement and Monitoring of Pollutant Discharge Permits. Establish an enforcement and monitoring system for fixed sources of pollutants with the Pollutant Discharge Permit System at its core. Release a Pollutant Discharge Permit Enforcement Guidebook or Guidelines for key industries.
Strengthen Regulatory and Policy Framework. Enhance integration with Pollutant Discharge Permit Technical Specifications. Facilitate the legalization and standardization of assessment models. Optimize the technical system behind Pollutant Discharge Permits. Develop and revise Technical Specifications for the application and issue of Pollutant Discharge Permits. Facilitate the development and revision of guidelines for feasible technologies for pollution prevention and control and self-monitoring in key industries.
1.2 Increase Corporate Pollutant Discharge Responsibilities and Obligations
Polluting enterprises are both the opening and main acts on the pollutant management stage; unfortunately, unless corporate responsibility and obligation forcing enterprises to manage pollutant discharge themselves is increased, the market is unlikely to jump into action. The work of clearly defining the actions enterprises must take within the Pollutant Discharge Permit system pushes enterprises into enacting a higher level of self-monitoring and green management.
State Council Regulation on the Administration of Pollutant Discharge Permits (January 24, 2021)
The Regulations applies either Key Management or Simplified Management to Pollutant Discharge Permits based on the permit holder’s pollutant production volume, discharge volume, and degree of environmental impact.
Permit holders who produce greater volumes of pollution, discharge greater volumes, and have a greater impact on the environment will be subject to Key Management.
The Regulations mandate the following for enterprises subject to Pollutant Discharge Permit Key Management:
Firstly, each permit holder must establish an internal control system for environmental management. Standardized pollutant discharge outlets must be established and properly signed, as per the law. Permit holders must also ensure that the locations and quantity of their pollutant discharge outlets, discharge methods, and the direction(s) of discharge are all consistent with the scope of their Pollutant Discharge Permit.
Secondly, permit holders must develop self-monitoring systems which meet both the Pollutant Discharge Permit regulations and relevant standards. Permit holders must install, use, and maintain automatic pollutant discharge monitoring equipment that connects to the monitoring equipment used by the authorities at the Ministry of Ecology and Environment. Original monitoring records are to be retained, and permit holders bear liability for the integrity and accuracy of all self-monitoring data. Self-monitoring data must not be altered or falsified.
Thirdly, permit holders are required to establish an environmental management ledger to record information such as pollutant discharge concentrations, discharge volumes, and the operating status of major production equipment and pollution prevention and control equipment.
Fourthly, permit holders must report all polluting behavior, discharge concentrations, and discharge volumes to the Pollutant Discharge Permit reviewing authority. Permit holders must also publicly disclose related pollutant discharge information on the National Pollutant Discharge Permit Management Information Platform, as per the rules of their permit.
Simplified Management will be applied to permit holders who produce smaller volumes of pollution, smaller volumes of discharge, and have a less severe impact on the environment.
The Regulations mandate the following for enterprises eligible for Pollutant Discharge Permit Simplified Management: entities in this category do not need to apply for a Pollutant Discharge Permit, but must complete and submit pollutant discharge registration records. The list of entities who need to complete and submit pollutant discharge registration records will be formulated and announced by the authorities at the Ministry of Ecology and Environment. Opinions from relevant departments, industry associations, enterprises, institutions and the public will be sought when formulating this list. Entities who need to complete and submit pollutant discharge registration records can do this on the National Pollutant Discharge Permit Management Information Platform. Any details which have changed can also be updated on the platform.
1.3 Strengthen the Enforcement and Monitoring of Pollutant Discharge Permits
A new framework will be created to improve upon the monitoring and enforcement sections of the Regulation on the Administration of Pollutant Discharge Permits, and will include the licensed discharge of pollutants by enterprises, legal monitoring by the government, and mutual monitoring by the community. To that end, the Ministry of Ecology and Environment released the Guiding Opinions on the Strengthening of Enforcement and Monitoring of Pollutant Discharge Permits. The Opinions further strengthens the enforcement and monitoring of Pollutant Discharge Permits by status, and provides new guidance on the co-operation between monitoring and enforcement entities and pollutant discharging entities.
Ministry of Ecology and Environment Guiding Opinions on the Strengthening of Enforcement and Monitoring of Pollutant Discharge Permits (March 28, 2022)
The Opinions provide guiding opinions for regional governments, Ministry of Ecology and Environment departments and polluting entities.
The Opinions indicate that regional government responsibility should be consolidated: regional governments should accept full liability for work performed by the Pollutant Discharge Permit System units within their area of administration and include the system’s performance in their pollution prevention and control strategy reviews. In principle, all fixed sources of pollution should hold permits by the end of 2023.
The Opinions confirm that the Ministry of Ecology and Environment must: issue Pollutant Discharge Permits by the letter of the law, enhance tracking and monitoring capacity, begin list-based enforcement checks, strengthen monitoring and enforcement, properly establish a monitoring and enforcement network, strictly punish violators, and strengthen the integration of administrative enforcement and criminal punishment. As part of this, enforcement agencies need to improve their “double random, full disclosure” monitoring — i.e. random on-site inspections by inspectors from random agencies, the results of which are publicly disclosed — and implement positive list enforcement, promote off-site monitoring, regulate administrative discretion, incentivize reporting, improve guidance for typical cases, and more.
The Opinions mandate that polluting enterprises only discharge pollutants when holding a legal permit, only discharge pollutants in the manner allowed by their permit, and establish a Pollutant Discharge Permit supervision system that clarifies the responsible person(s) and their responsibilities. Enterprises must establish an environmental management system, promptly apply for, obtain, renew and update their Pollutant Discharge Permits, implement and improve upon pollution prevention and control measures, operate automatic monitoring equipment, and increase the quality of their self-monitoring systems. On top of this, enterprises must guarantee the integrity, accuracy and completeness of all submitted reports, environmental management ledgers, Pollutant Discharge Permit enforcement reports, and self-monitoring data, and are legally required to disclose information on the National Pollutant Discharge Permit Management Information Platform that is truthful and free from falsifications. Enterprises must also be willing and able to accept oversight.
2. Future Policy Direction
(1) Implement Self-Monitoring Management and List-Based Pollutant Discharge Permit Enforcement Checks
There are currently[1] over 3,300,000 fixed sources of pollution across the country subject to Pollutant Discharge Permit management. Over 350,000 permits have been issued, over 2,940,000 entities have registered for pollutant discharge permission, and over 6,000 notices to cure within a monitoring period have been sent. Pollutant Discharge Permit environmental monitoring has already achieved full coverage. Polluting entities will be classified according to the volume of pollution produced, the volume of pollution discharged, and the severity of their impact on the environment to lighten the administrative load placed on polluting entities. These changes will turn the self-monitoring of polluting enterprises and permit monitoring and enforcement into key components of the Pollutant Discharge Permit System.
Strengthen Regulatory and Technological Frameworks. The Guiding Opinions on the Strengthening of Enforcement and Monitoring of Pollutant Discharge Permits sets out an end of 2023 deadline for the implementation of list-based Pollutant Discharge Permit enforcement checks in key industries. List-based Pollutant Discharge Permit enforcement checks are to achieve full coverage by the end of 2025, and form part of a system for monitoring fixed sources of pollution based around the Pollutant Discharge Permit System. “List-based” enforcement checks will check for compliance with the items listed on the Pollutant Discharge Permit. With this in mind, the timely review and revision of Pollutant Discharge Permit enforcement-focused regulations and technical guidelines such as Technical Specifications for the Application and Issue of Pollutant Discharge Permits, guidelines for feasible technologies for pollution prevention and control and self-monitoring in key industries, and the Register of Pollutant Discharge Permits for Fixed Sources of Pollution will be extremely important.
(2) Facilitate Links between Relevant Management Elements
As a system centered around the Pollutant Discharge Permit System is carefully constructed, other relevant environmental management factors will be integrated to form a complete Ecology and Environmental Protection Management System.
However, the establishment of connected Pollutant Discharge Permit monitoring and enforcement mechanisms will require that day-to-day management of Pollutant Discharge Permits, environmental monitoring, and monitoring and enforcement links are strengthened first. Information, tips, reports and feedback must be shared promptly to enable the timely discovery, rectification, and resolution of problems.
Once this is in place, work can focus on integrating Pollutant Discharge Permits and Environmental Impact Assessments. Requirements for the type, concentration, quantity, methods and special monitoring of pollutants discharged detailed in Environmental Impact Assessment documentation and correspondence will be “listed” on the Pollutant Discharge Permit, simplifying the task of monitoring and enforcement. Ecology and environmental damage compensation work will also be integrated, and the standards, conditions and authorities involved in the compensation process will be clarified. This will further drive information sharing and the bi-directional application of results.
(3) Promote Pollutant Discharge Permits for All Environmental Factors
The Pollutant Discharge Permit System has been the subject of great focus recently and the importance of Pollutant Discharge Permits continues to increase, yet it remains imperative that single-permit management is fully implemented. Single-permit management refers to all environmental factors being covered in a single Pollutant Discharge Permit, and to that end water, air, soil, solid wastes and more will gradually be added to the pollutants on the permits, after which other pollutants such as noise will be added. This gradual expansion will create a new enforcement framework, where enterprises discharge pollutants in a licensed manner, the government monitors such legally, and society engages in mutual monitoring.
(4) Support the Establishment of a Discharge Quota Trading System
Pollutant Discharge Permits are clear evidence of a right to discharge pollutants, and they also make it easy to trade discharge quotas. Enterprises who engage in discharge quota trading must ensure that volumes, sources and directions of discharge are clearly stated on the permit, as the environmental authorities will be monitoring discharge based on the information written on the permit. The majority of Chinese provinces have already launched discharge quota trading covering a limited number of enterprises and pollutants, but with a focus on discharging pollutants in first-tier regions. The development of a pollutant discharge quota trade in second-tier markets will become a key focus as the government attempts to stimulate the discharge quota market across the board.
[1]Source: Ministry of Ecology and Environment release, May 2022
