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China to Fully Implement Environmental Credit Evaluation

The environment credit evaluation for relevant enterprises and institutions will start from 2022. A four levels grading system will be adopted to show the evaluation results of enterprises and provide the basis of differentiated management.

On March 23th, 2021, China National Development and Reform Commission (NDRC) issued a notice to solicit public comments on the Guiding Opinions on the Full Implementation of Environmental Credit Evaluation (Draft) [1]. The draft was prepared by NDRC and MEE according to their respective responsibilities, and the consultation will be concluded on April 21st, 2021.

In the 19th National Congress, “Improving environmental credit evaluation, requiring mandatory information disclosure, and aggravating the penalties” were emphasized. In fact, since China’s 18th National Congress, according to the national deployment of ecological civilization construction and social credit system development, several documents on environmental credit evaluation have been issued. These documents were piloted in 20 provinces/cities all over the country, and the environmental credit of over 30,000 enterprises have been evaluated.

In practice, it has been discovered that there are problems such as inconsistent environmental credit evaluation standards, evaluation processes to be standardized, and insufficient application of credit evaluation results. Therefore, there is an urgent need to further strengthen and improve the top-level design to promote the high-quality development of the national environmental protection credit evaluation work.

On the basis of existing practice, the "Guiding Opinions" has improved and innovated the environmental credit evaluation system, which mainly includes five parts and a total of 18 articles. The first part is general requirements, which clarifies that enterprises and institutions that are included in ecological environment supervision and have an important impact on ecological environmental protection and climate change response will be fully implemented environmental credit evaluation from 2022.

Environmental protection credit evaluation standards are specified in the second part. The national environmental protection credit evaluation standards will be researched and formulated by the Ministry of Ecology and Environment in conjunction with the National Development and Reform Commission, and the prefecture-level ecological and environmental authorities can formulate more stringent provincial standards according to actual needs. Environmental credit evaluation will be carried out based on environmental credit information, and the evaluation results shall be hierarchically divided into four levels: "A", "B", "C", and "D" according to the environmental credit status from high to low. Differentiated management will be taken for enterprises at different levels. For the enterprises at A level, they can take voluntary measures to reduce emissions and receive less management from the environmental protection administrations. While enterprises at the D level will be listed as key targets for supervision, such enterprises will face more daily supervision. The random inspection proportion and frequency for D-level enterprises will be increased as well.

In the last 3 parts, the evaluation process, application of evaluation results, and implementation of the evaluation are detailed respectively. It shall be noted that the environmental credit evaluation may investigate the enterprises’ performance on daily VOC emission control, in which the ratio of low-VOC coating products they manufactured or used is an important indicator (ChemLinked Article [2]). Enterprises that shall take actions in advance, especially for the coating industry, for the VOC standards for products are all in effect now.

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