New Pollution Tax Could Reap in More than 50 Billion Yuan

China may be on the verge of unleashing its most aggressive environmental-protection tax to date. The new law passed through the National People’s Congress is designed to reduce the contamination of air, soil and water. It targets factories, power plants and other emitters of pollutants such as sulphur dioxide.

Some analysts say the tax could push some of the biggest polluters out of business, and an earlier study by the Environment Ministry found it could reap in 50 billion Yuan per year or three times as much as similar legislation pulled in last year.

“This sends a clear message to the industry: you change, or you die,” said Shi Lei, deputy director of the State Environmental Protection Key Laboratory of Eco-Industry at Tsinghua.

The new law would force polluters to pay up to 12 yuan (HK$13.40) for each 0.95kg of nitrogen oxide or Sulphur dioxide released. Mines would have to pay 15 yuan for each tonne of tailings. Every tonne of ash produced by a coal-fired power plants will result in a fine of about 25 yuan. Nuclear power plants will also have to pay for producing radioactive waste.

Carbon dioxide, perceived by some experts as the most dangerous pollutant, is not on the list of regulated contaminants. Nonetheless, the government has made strides in pushing for stronger environmental regulations than ever before. On the other side of the world, some critics say a lax regulatory environment of industry has given China an unfair advantage in the world economy – a view shared by Peter Navarro, United States President-elect Donald Trump’s pick for head of his newly-created White House National Trade Council.

Moreover, the new law comes in a regulatory climate where local governments on the mainland are pushing further to expand the scope of “environmental crimes,” and prosecute people behind business with the worst environmental track records.

Yan Maokun, head of a research office at the Supreme People’s Court, says this law would make that easier.

However, some analysts say this regulation is still not enough.

Yuan Ying, assistant manager at Greenpeace East Asia’s office in Beijing, says the new tax would add 0.004 yuan per kWh to the cost of coal-fired power; however, he says the real environmental cost is estimated at between 0.1 yuan and 0.3 yuan per kWh.