PRC regulations on motor vehicle emissions and air pollution

The main source of law governing motor vehicle emissions and air pollution in the People’s Republic of China (PRC) is the Law on the Prevention and Control of Atmospheric Pollution (amended in August 2015, entering into force on 1 January 2016) (Air Pollution Law). 

Recent amendments bring many new features into the Air Pollution law, including:

  1. emissions testing requirements that newly-manufactured motor vehicles shall satisfy emissions tests before entering the market and that in-use vehicles shall also regularly undergo emissions testing, failing which the vehicle will not be permitted to operate in road;
  2. transparency requirements that businesses engaged in the manufacture and/or importation of motor vehicles shall make publicly available any technological information in connection with emissions testing, emissions control and maintenance of the vehicles being sold and/or imported;
  3. environmental-protection-related vehicle recall requirements that motor vehicles which cannot meet applicable emission standards due to defects in the design and/or production process or lack of durability shall be recalled;
  4. mandatory motor vehicle scrapping requirements;
  5. further compliance requirements that fuels and additives for vehicle consumption shall meet applicable standards.

Current PRC regulations on prevention and control of motor vehicle emissions

1. National and provincial motor vehicle emission standards

At present, the Phase IV emission standards are implemented nationwide. Major standards include: Limits and Measurement Methods for Exhaust Pollutants from Diesel Engines of Urban Vehicles (WHTC) (HJ 689--2014), Limits and Measurement Methods for Exhaust Pollutants from Gasoline Engines of Heavy-Duty Vehicles (China Phase III, IV) (GB 14762--2008), Limits and Measurement Methods for Emissions from Light-Duty Vehicles (China Phase III, IV) (GB 18352.3--2005), Limits and Measurement Methods for Exhaust Pollutants from Compression Ignition and Gas Fuelled Positive Ignition Engines of Vehicles (China Phase III, IV, V) (GB 17691--2005), etc.

At the provincial level, however, stricter emission standards of later phases may be implemented in advance. According to Article 50 of the Law on the Prevention and Control of Atmospheric Pollution (as amended in 2015) (Air Pollution Law), limits of exhaust pollutants contained in national motor vehicle emission standards of later phases may be applied in certain districts, at the discretion of provincial governments. Such decisions of advance implementation of stricter standards shall be filed with the Ministry of Environmental Protection. For instance, according to Notice of Advance Implementation of Phase V National Motor Vehicle Emission Standards in Guangdong Province by Guangdong Bureau of Environmental Protection (YH (2015) No 16), starting from 1 March 2015, all light-duty vehicles with ignition engines to be sold or registered in the Pearl River Delta district shall comply with emissions control requirements under Limits and Measurement Methods for Emissions from Light-Duty Vehicles (China Phase V) (GB 18352.5--2013).

2. Prohibition on the manufacture, importation and sale of motor vehicles with emissions above applicable standards

According to article 51of the new Air Pollution Law, the manufacture, importation and sale of motor vehicles with emissions above applicable standards are prohibited.

3. Motor Vehicle emissions testing

According to Article 52 of the new Air Pollution Law, newly-manufactured cars shall satisfy emissions tests before entering the market; in-use vehicles shall also undergo emissions testing on a regular basis. Article 53 further provides that in-use vehicles shall be tested by motor vehicle emissions testing stations; vehicles failing the tests shall not be able to obtain from the transportation division of competent police bureaus a conformity sign, which is a prerequisite for operation of a vehicle.

4. Treatment of in-use vehicles with emissions above applicable standards

According to Article 60 of the new Air Pollution Law, vehicles with emissions above the applicable standards shall be fixed; vehicles which do not meet the applicable standards after repair or adoption of pollution control technologies shall be scrapped.

Legal consequences of violations

1. Manufacturing vehicles with emissions above applicable standards

Article 109 of the new Air Pollution Law provides that any manufacturer producing vehicles with emissions above applicable standards shall be ordered to make corrections and ensure compliance by the competent environmental authority at the provincial or national level, any illegal gains shall be confiscated, a fine of one to three times the value of the covered goods will be imposed, and any non-complying vehicles shall be confiscated and scrapped; any manufacturer disobeying the order to make corrections and ensure compliance shall be ordered to suspend production and put under administration, with the halt of production of the vehicle models ordered by the competent motor vehicle production management department under the State Council.

Where any manufacturer of motor vehicles practices fraud and uses the shoddy ones to replace the qualified products of engine or pollution control device for sale, the competent authority for environmental protection under the people's government at or above the province level shall order the manufacturer to make corrections, confiscate the illegal gains, impose a fine of one time to three times of value of the goods, and confiscate and destroy such motor vehicles not meeting the pollutant emission standards, with the halt of production of the vehicle models ordered by the competent motor vehicle production management department under the State Council.

2. Importation and sale of vehicles with emissions above applicable standards

Under the Article 110 of the new Air Pollution Law, in the event that manufacturers import and/or sell vehicles with emissions above applicable standards, the competent business administration authority at the county level or above or the competent entry-exit inspection and quarantine authority shall confiscate any illegal gains and impose a fine of one to three times the value of the covered goods; non-conforming vehicles shall be confiscated and destroyed. Any importation constituting smuggling will face penalties from the customs.

Transparency requirements

The new Air Pollution Law requires that businesses engaged in the manufacture and/or importation of motor vehicles shall make publicly available any technological information in connection with emissions testing, emissions control and maintenance of the vehicles being sold and/or imported.

Failing to meet such requirements, the non-compliant business may be fined up to RMB 500,000 by the competent environmental authority or transportation authority at the provincial or national level.

Mandatory recalls due to environmental violations

The new Air Pollution Law established the mandatory recalls mechanism. Motor vehicles which cannot meet applicable emission standards due to defects in the design and/or production process or lack of durability shall be recalled.

Thus, the vehicles will be recalled when they defects in the design and/or production process or lack of durability.

Failing to initiate voluntary recall plans, a mandatory recall order shall be issued by the national quality regulator and the national environmental authority.

Legal consequences of violations related to emissions control and testing

Under the new Air Pollution Law, manufacturers selling engines and/or emissions control devices unfit for purpose and passing them off as products in conformity with applicable emission standards shall be ordered by the competent environmental authority at the provincial or national level to suspend production and put under governmental administration; any illegal gains shall be confiscated, a fine of one to three times the value of the covered goods be imposed, and any non-complying vehicles be confiscated and scrapped. The national regulator of motor vehicle production shall order the production of the affected models be stopped.

Also, forging test results or producing false reports will incur a fine of RMB 100,000-500,000, with all illegal gains confiscated by the competent environmental authorities; serious offences may lead to cancellation of the testing qualification. Cheating the emissions tests through means such as temporarily switching the emissions controls device, or disturbing the functioning of on-board emissions diagnostic systems are prohibited. Offenders will be ordered by the competent environmental authorities to make corrections; offending car-owners and colluding vehicle refit firms will incur a fine of RMB 5000 per vehicle.

Possible regulatory measures 

PRC environmental authorities may take against businesses engaged in the manufacture and/or importation of motor vehicles after the VW ‘diesel dupe’ incident:

  • Conduct emissions tests on affected models being manufactured, imported and/or sold in(to) China;
  • Conduct emissions tests on other models being manufactured, imported and/or sold into China;
  • Tighten regulation on the transparency of environment-related information concerning vehicles being manufactured and/or imported in(to) China.

Proposed environment-related legal services 

Proposed environment-related legal services to businesses engaged in the manufacture and/or importation of motor vehicles:

  • Legal advice on PRC environmental law governing or in connection with the manufacture, importation and/or sale of motor vehicles by carmakers in(to) China;
  • Legal advice on issues related to the emissions testing of new models to be made by carmakers in China;
  • Legal advice on issues related to the emissions testing of in-use vehicles made, imported and/or sold by carmakers in(to) China;
  • Legal advice on issues related to the transparency of technological information of models made in or imported into China by carmakers concerning emissions testing, emissions control and maintenance;
  • Legal advice on issues related to vehicle recalls;
  • Legal services related to legal compliance of factories of carmakers in China;
  • Legal counseling on environment-related administrative penalties, civil actions, pro bono actions and/or criminal proceedings.