Sentenced! Power plant charged for failing to fulfill carbon quota payment obligations

Key emission units still fail to fulfill their carbon emission quota payment obligations after repeated supervision. Environmental protection social organizations Beijing Grassland Alliance Environmental Protection Promotion Center, Yiyang City Environmental and Resource Protection Volunteer Association, Shenzhen Luyuan Environmental Protection Volunteer Association and Boshan Taiheng Social Work Service Center will connect Xingyi City Shangcheng Power Generation Co., Ltd., Buyi and Miao Autonomous Prefecture in Southwest Guizhou, Guizhou Province (hereinafter referred to as Shangshang Company) sued the court, requiring it to fulfill its obligation to pay carbon emission quotas and assume its liability for compensation for ecological and environmental damage. Recently, the Intermediate People's Court of Buyi and Miao Autonomous Prefecture in Southwest Guizhou pronounced a first-instance verdict.

Fulfilling the obligation to pay carbon emission quotas is not only an administrative obligation entrusted by administrative laws and regulations, but also helps reduce environmental risks and is of great significance for mitigating climate change and safeguarding environmental public interests. Bringing lawsuits by social organizations will help urge those who pay carbon emission quotas to fulfill their payment obligations in a timely manner and further reduce carbon emissions.

On November 9, 2021, environmental law enforcement officers of Xingyi Branch of Qianxinan Prefecture Ecological Environment Bureau, together with the Xingyi City Environmental Monitoring Station, conducted law enforcement inspections and supervisory monitoring of Shangshang Company and found that Shangshang Company's illegal activities of excessive emission of air pollutants and abnormal operation of automatic monitoring equipment resulted in a total administrative penalty of 498,000 yuan.

On December 21, 2021, law enforcement officers of Xingyi Branch discovered during law enforcement monitoring that Shangshang Company had illegally discharged air pollutants exceeding the standard, and imposed an administrative penalty of 408,000 yuan on it.

On February 18, 2022, environmental law enforcement personnel from Xingyi Branch of Qianxinan Prefecture Ecological Environment Bureau and the entrusted environmental monitoring technicians from Qianxinan Prefecture Huake Testing Technology Co., Ltd. conducted law enforcement inspections and comparison monitoring on Shangshang Company and found that Shangshang Company's particulate matter CEMS exceeded the standard, and an administrative penalty of 48,000 yuan was imposed on Shangshang Company for violating the normal operation of automatic monitoring equipment.

After verification, Shangshang Company is a key emission unit for the national carbon emission trading quota management from 2019 to 2020. In the first performance cycle, it should purchase a carbon emission quota gap of 821596 tons of carbon dioxide for settlement and performance. As of January 20, 2022, the defendant Shangcheng Company had only purchased 3448 tons of carbon emission allowances of carbon dioxide, and had not yet purchased and settled 818148 tons of carbon dioxide.

Based on this, the plaintiff believes that the defendant has seriously damaged the order of the carbon emissions trading market and social public interests, and should bear the liability for damages equal to the obligation of continued payment or compensation and payment; it has caused ecological and environmental security risks to the surrounding environment and infringed upon public interests; If we do not actively adopt energy conservation and emission reduction measures to implement the "double carbon" goal, and if we do not actively fulfill the main responsibilities of carbon peaking and carbon neutrality, we should bear the liability for compensation.

The plaintiff believes that Shangcheng Company, as a key emission unit, has not taken active energy conservation and emission reduction measures to reduce greenhouse gas emissions. It has violated the provisions of Article 28 of the "Measures for the Administration of Carbon Emissions Trading (Trial)" and has not yet purchased and paid carbon emissions. The quota is 818148 tons of carbon dioxide, which has seriously damaged the order of the carbon emissions trading market and social public interests.

The defendant argued that before 2021, my country had not formally implemented carbon emissions trading. In addition, the administrative department did not clarify the construction of the carbon emissions market in the early stage, nor did it inform enterprises in advance of the specific start time for accounting and performance. According to the "Interim Measures for the Management of Carbon Emissions Trading" promulgated on December 10, 2014, the earliest time for regulations to regulate carbon emissions trading was in 2014. However, before 2018, Guizhou did not carry out carbon emissions trading, and the respondent was not formally implemented. Carbon emissions trading has certain administrative trust and is not a subjective failure to fulfill accounting obligations.

After the Guizhou Province Department of Ecology and Environment made a payment request, the respondent has actively fulfilled some of the carbon emission quota purchase obligations. According to the current carbon emission market transaction price, the performance transaction requires at least 60 million yuan in funds. The company's capital turnover is in a difficult situation and basically loses its ability to perform, but it is still actively fulfilling its performance obligations. The respondent has no intention of evading this administrative obligation.

During the lawsuit, Shangshang Company transferred 73.18 million yuan to Hubei Carbon Emissions Trading Center Co., Ltd. to purchase carbon emission quotas. As of December 28, 2023, Shangshang Company has completed the payment and performance of the carbon emission quota gap of 821596 tons of carbon dioxide that should be purchased during the first performance cycle.

The court held that the defendant Shangcheng Company had cleared the carbon quota gap and incurred corresponding expenses to prevent the occurrence and expansion of damage. The plaintiff's purpose of the lawsuit had been achieved and the court no longer supported it.

What is worthy of recognition is that during the litigation process of this case, the defendant Shangcheng Company was able to realize the importance of fulfilling the obligation to pay carbon emission quotas and purchased quotas for payment through the carbon emission trading market. Although it was lazy in fulfilling the obligation to pay in the early stage, However, its behavior of actively rectifying in the lawsuit and proactively fulfilling the obligation to pay in the settlement should be encouraged.

During the administrative penalty period, the Qianxinan Prefecture Ecological Environment Bureau and Shangshang Company jointly entrusted relevant experts to evaluate the ecological environment restoration costs of Shangshang Company's emission of waste gas (waste smoke) and excessive emission of waste gas (waste smoke), the cost of formulating restoration plans, and the damage to the regional environment. Functional losses during the period from damage to restoration are evaluated.

The expert group issued an evaluation conclusion in February 2024 that the company had a clear phenomenon of exceeding the standard of pollutant discharge, causing environmental damage to the air environment. At the same time, the company is located in the industrial park, and the closest distance to the air environmentally sensitive target is about 1.2 kilometers. There is no obvious damage to the air environmentally sensitive target.

Referring to the environmental protection tax charging standard of Guizhou Province, based on the virtual treatment cost per unit pollutant in the excessive exhaust gas of the power plant calculated at 2.4 yuan/pollution equivalent, the ecological and environmental damage caused in this case totaled 9,400 yuan.

After rectification, the monitoring results of Shangshang Company's online monitoring system connected with the ecological environment administrative department in 2023 have all met the standards. The Qianxinan Prefecture Ecological Environment Bureau believes that after the implementation of the above waste gas control and rectification measures, there is no need to further restore ecological and environmental damage. The ecological and environmental damage restoration cost in this case is calculated at zero yuan.

There are two controversial points that have attracted much attention in this case. The first is whether carbon dioxide is an excessive emission of air pollutants? In this regard, the court wrote to the Qianxinan Prefecture Ecological Environment Bureau. The Qianxinan Prefecture Ecological Environment Bureau replied to the court: Carbon dioxide is not a pollutant, and there is currently no relevant law clarifying carbon dioxide emission standards, so there is no saying whether carbon dioxide emissions exceed the standard; the "pollutants" in the excessive emission of atmospheric pollutants in the penalty decision do not include carbon dioxide, and the excessive factor in the penalty is smoke and dust pollutants; After consultation, relevant business offices of the Department of Ecology and Environment of Guizhou Province have been contacted. Because carbon dioxide is not a pollutant, there is currently no relevant law clarifying carbon dioxide emission standards.

In view of this, the court found that there was no evidence to prove that the defendant Shangcheng Company's failure to fulfill its obligation to pay carbon emission quotas resulted in damage to the ecological environment. Therefore, the plaintiff's reason for claiming that the defendant should bear the damage to the ecological environment caused by excessive emission of carbon dioxide was not established, and the court of first instance did not support it.

Second, does this case pose a major risk? The court held that although the current legislation does not include greenhouse gases such as carbon dioxide as pollutants, atmospheric pollutants are not the only factor leading to climate change and ecological environment damage. The impact of climate warming and related environmental problems caused by the emission of greenhouse gases such as carbon dioxide cannot be ignored. In densely populated areas with serious emissions, excessive concentration of carbon dioxide will also aggravate air pollution.

Therefore, if excessive carbon dioxide emissions exceed the carrying capacity of the environment, it may also cause damage to the ecological environment, which requires risk prevention. Based on this, it was determined that the defendant's behavior of polluting the environment caused damage to the ecological environment and caused loss of spiritual benefits to the public's enjoyment of a beautiful ecological environment. The defendant Shangcheng Company publicly apologized to the public in Guizhou provincial media. The defendant Shangcheng Company will pay 9400 yuan to the designated account for the loss caused by its excessive discharge of pollutants to the ecological environment within 15 days from the effective date of this judgment.