China’s new ecological and environmental code: Key highlights and practical implications (Effective August 15, 2026)

Key regulatory developments relevant to practice

Compared with existing environmental statutes, the Ecological and Environmental Code brings several areas of regulation to a new level of statutory clarity. For practitioners advising on compliance systems, due diligence processes, and transition planning, two groups of updates are particularly worth attention: the new regulation of emerging pollutants and the elevation of climate governance into binding law.

The first set of changes concerns the introduction of national regulatory frameworks for three emerging categories of pollution, chemical substances, non-ionizing radiation, and light pollution, all codified for the first time at the statute level:

• For chemical substances, the Code authorizes lifecycle management through State Council rulemaking. While some mechanisms existed previously under government policies, placing them into the Code provides a more legal foundation, especially the designations of priority controlled new chemical pollutants and the pre marketing registration system for new chemical substances. From an ESG regulation perspective, companies handling advanced materials, additives, or chemical intermediates may need to reassess supply chain transparency and data reporting capabilities, as compliance expectations will now derive directly from statutory text rather than administrative guidance alone.
• For non-ionizing radiation, the Code clarifies regulatory responsibilities by empowering national standardization authorities to set emission limits and by creating a tiered management system for radiation-emitting facilities based on their emission levels and environmental impact. This may influence sectors such as telecommunications equipment, consumer electronics, and industrial heating processes, where environmental compliance has traditionally focused on product safety rather than environmental impact. As standards evolve, businesses may face more explicit environmental risk assessments during product design and licensing.
• For light pollution, the Code authorizes Chinese authorities to set permissible light intensity thresholds for lighting products. Operators of large lighting facilities must prevent excessive or improperly directed lighting. It also requires operators of lighting installations, including advertising screens, billboards, roads, stadiums, and construction sites, to take effective measures to prevent excessive illumination.

A second major development is the introduction of a statutory framework for climate governance. The Code requires the integration of carbon peaking and carbon neutrality goals into national development planning and authorizes mechanisms to control both the total amount and intensity of carbon emissions. It further mandates key mitigation mechanisms, including carbon accounting, product carbon footprint management, and the monitoring of carbon sinks such as forests and wetlands. One of the most notable shifts is the elevation of China’s national emissions trading system (ETS) into statutory form, which strengthens the legal enforceability of allowance surrender and emissions data verification. From an ESG regulation standpoint, the codification of climate governance signals that what was previously framed as policy commitment has now become a legally grounded compliance obligation. Companies covered by the ETS or operating in high emission industries will likely face more standardized data assurance expectations, and companies outside the ETS may also experience indirect effects through supply chain requirements, carbon footprint disclosure demands, and investment driven due diligence practices.

Note: For the complete text, please see the Ecological and Environmental Code of the People’s Republic of China

Authored by Sherry Gong, Jessie Xie, Wensheng Ren, and Jason Zhang.