Beijing Grassland Alliance Environmental Protection Center v. Xingyi Shangcheng Power Generation Company Limited

Beijing Grassland Alliance Environmental Protection Center, supported by three other NGOs, sued Xingyi Shangcheng Power Generation Company Limited. The plaintiff raised eight demands, focusing on three key issues: 1. Environmental damages: The plaintiff accused the defendant of engaging in long-term practices that included emitting waste gas, dust, and key pollutants above standard levels, tampering with or forging pollution monitoring data, and failing to maintain automatic monitoring equipment. The plaintiff argued that these actions constituted an environmental tort and requested the court to hold the defendant accountable for civil liabilities. The plaintiff sought court orders for the cessation of the infringement, the elimination of pollution risks, environmental restoration, compensation for the loss of environmental services, and a public apology. 2. Carbon Emissions: The plaintiff alleged that the defendant exceeded the permissible limits for carbon dioxide emissions. As a result, the plaintiff requested the court to evaluate the atmospheric damage caused by these excessive emissions and demanded that the defendant be held accountable for ecological damage and required to provide compensation. 3. Carbon Quotas: The plaintiff argued that the defendant failed to pay for 821,596 tons of carbon emission quotas during the first compliance period of the carbon trading system, despite exceeding the allowable carbon dioxide emissions. The plaintiff requested that the court order the defendant to pay for 818,148 tons of carbon credits and implement energy-saving measures, pointing out that the defendant had only purchased 3,448 tons as of January 2022. The defendant responded by asserting that their pollutant emissions had never exceeded legal limits and had not caused environmental damage. They also claimed that their failure to purchase additional carbon quotas was not intentional but resulted from confusion about compliance deadlines and financial difficulties. Furthermore, they argued that their actual carbon emissions were significantly lower than the amounts calculated by the government when penalties were imposed, and they requested a review of these administrative penalties. Additionally, the defendant contended that the judiciary lacked jurisdiction over this case, asserting that only administrative liability should apply. On June 7, 2024, the Court rendered its decision. 1. Environmental Tort: The court found that the defendant’s emissions of sulfur dioxide and dust, which exceeded the legal limits, constituted an environmental tort, making them civilly liable. However, since the defendant had rectified the issue before the lawsuit and the environmental damage did not require further restoration, the plaintiff's request to stop the infringement and restore the environment was denied. However, the court awarded the plaintiff 9,400 CNY in compensation for the loss of ecological services. 2. Carbon Emissions and Quotas: The court ruled that the defendant had not exceeded emissions standards for waste gas or nitrogen oxides (except during equipment malfunctions), and that the plaintiff failed to prove that the defendant’s non-payment for additional carbon quotas had caused environmental damage. However, the court underscored the future risks associated with excessive carbon dioxide emissions and stressed the importance of stringent control, even though current Chinese law does not classify carbon dioxide as a pollutant, nor does it have specific emission standards for it. The court affirmed the defendant’s obligation to pay for the extra carbon quotas, noting that this obligation was fulfilled during the litigation process. 3. The court concluded that the defendant’s repeated failure to fulfill its carbon trading obligations, despite multiple reminders, was unlawful and contrary to the goals of mitigating climate change and protecting the legal rights of current and future generations. To sum up: 1. The court ruled that it has jurisdiction over failure to comply with carbon trading obligations. 2. Although Chinese law does not currently classify carbon dioxide as a pollutant, its emissions are still subject to stringent controls, and entities responsible for excess emissions must fulfill their obligations accordingly.