In conjunction with the series of environmental inspections, a new regulation for the Pollutants Discharge Permit (PDP) is coming into enforcement this year. This new regulation simplifies the process but most importantly shifts the environmental responsibility towards manufacturers. Even if before the Environmental Protection Bureau (EPB) was heavily involved in the Environmental Impact Assessment, it will now allow factories to undertake self-monitoring and declaration.
New PDP plan and process
The procedure for new factories has changed somewhat. Instead of going through the 3 steps: validation of the construction project, testing and validation of the test, manufacturers must now declare the amount of pollutants they discharge. Existing factories will also have to apply for the new permit.
The limit of discharge allowed will be based on historical data, sectors data and national standard of the industry that will be written on the operation permit. Ms Hu Jing, Director of Shanghai Low Carbon Economy Research Center, states that the lowest figure will serve as a reference. According to her, it is necessary to go further than the standards to reach the target of -30% emission by 2020 (as opposed to 2013).
Until September 2017, the EPB mainly focused on delivering permits for coal and steel industries. However, by the end of 2017, thirteen other industrial sectors will have to apply for the new PDP regulation. It includes notably printing and dyeing, pharmaceutical ingredients, leather, electroplating, petrochemical, flat glass, fertilizers and pesticides. Then the remaining 63 sectors will then have to comply by 2020. Deadline for the different sectors will be published online.
Nationwide the PDP declaration includes major air and water pollutants. Shanghai, which is strongly reinforcing its environmental policies, also added solid waste and noise in the parameters.
Pollutants monitoring and declaration
The responsibility of the monitoring of pollutants is also transferred to manufacturers. They will have 6 months after the submission of the new permit to install all monitoring equipment. They will then be subject to semi-annual or annual declaration. Depending on the sector’s sensitivity, the declaration will be based on live monitoring, self-monitoring or material balance. In Shanghai some manufacturers will be obliged to disclose their data to the surrounding neighborhood.
A major change is also observed in the compensation system. Currently the compensation due to the environmental protection bureau is substituted for an environmental tax. This means manufacturers will now have to pay the tax bureau instead of the EPB. This may have consequences for smaller operations, who would get help from the EPB for the calculation.
Also, even though the regulation is fixed at national level, local bureaus will have authorities on two points. They will be able to fix the taxation rate of each pollutant within the range given on the national regulation. The range is quite wide, from 1.2元 to 12元 per ton for air pollutants, which can lead to significant differences across the regions. The local authorities will also decide how many pollutants they will tax. For example, in Shanghai only the 3 biggest pollutants will be charged. Tax reductions from 25% to 50% will be granted to the best players situated between 30% and 50% lower than the specified standard.
In conclusion this new environmental regulation will again lead to major changes in China’s manufacturing landscape. It will especially affect smaller factories, as Ms Hu Jing strongly advises to dedicate capable manpower.