17 November, 2020
In recent years, the treatment of volatile organic compounds (“VOCs”), which are important precursors for the formation of ozone (O₃) and fine particulate matter (PM2.5), is considered to be an effective way to control air pollution. China has issued a series of policies and standards related to the treatment of VOCs in 2020, culminating in the final stage of a three-year action plan to fight air pollution. A number of product quality standards that will limit the VOCs content of coatings, printing inks, adhesives, cleaning agents, etc. will come into effect soon and may have a significant impact on the relevant industries. Based on the relevant laws and policies, this article aims to remind industrial enterprises and industrial product retail enterprises (especially those with toll manufacturing arrangements) to pay special attention to some of the mandatory national standards for limiting the VOCs content in products, which will come into effect at the end of this year or early next year.
I. The Importance of VOCs Product Quality Standards
On June 24, 2020, the Ministry of Ecology and Environment (“MEE”) issued the 2020 VOCs Tackling Governance Plan (the “Plan”), which clearly stated that national and local standards of VOCs content limit for products shall be strictly implemented. The Plan pointed out that the production, sale and use of maritime coatings and floor coatings shall meet the newly published and implemented national standards of harmful substance limit for products from July 1, 2020. Manufacturing enterprises are urged to prepare for the implementation of standards for harmful substance limits for printing inks, adhesives, cleaning agents and woodenware coatings, vehicle coatings, architectural wall coatings and industrial protective coatings in advance, and complete the switch in an orderly manner before the standards come into effect. Some areas with special conditions may implement such standards in advance according to the need of improving the ambient air quality.
In respect to the law, the PRC Law on the Prevention and Control of Atmospheric Pollution (the “PCAP Law”) amended in 2018 clearly stipulates that the VOCs content of products shall meet the relevant quality standards. Article 44 of the PCAP Law provides that for the manufacturing, importation, sale and use of raw materials and products containing VOCs, the VOCs content shall comply with the quality standards or requirements.
As to the legal liability, any manufacturing and/or sale of raw materials and products with VOCs content which do not comply with the quality standards or requirements, the administration for the market regulation of the local people’s government at or above the county level may order the violator to make correction, confiscate the raw materials, products and illegal proceeds according to Article 103 of the PCAP Law, and impose a fine of not less than one but no more than three times, the monetary value of the goods. For any importation of raw materials and products with VOCs content which do not comply with the quality standards or requirements, customs may order the violator to make a correction, confiscate the raw materials, products and illegal proceeds, and impose a fine of not less than one but no more than three times the monetary value of the goods, according to Article 104 of the PCAP Law. Although the PCAP Law does not specify the legal liability of the users, the users may indeed face potential legal risks when the users utilize raw materials with VOCs content which do not comply with the quality standards to manufacture the products.
In addition, those published product quality standards that limit the VOCs content of coatings, printing inks, adhesives, cleaning agents, etc. are all mandatory national standards. Pursuant to Article 25 of the PRC Standardization Law, products and services which do not comply with the mandatory standards shall not be manufactured, sold, imported or provided.
II. What are the VOCs Product Quality Standards?
According to our search and collation, the published product quality standards related to VOCs content are mainly as follows, and the responsible department of such standards is the Ministry of Industry and Information Technology (“MIIT”).
Please click on the image to enlarge.
Among the above standards, the four standards which will come into effect at the end of this year or early next year may have a substantial impact on many industrial enterprises or industrial product retail enterprises (especially those with toll manufacturing arrangements): (i) Limit of Harmful Substances of Industrial Protective Coatings (GB 30981-2020), (ii) Limit of Volatile Organic Compounds Content in Adhesive (GB 33372-2020), (iii) Limit of Volatile Organic Compounds Content in Cleaning Agents (GB 38508-2020) and (iv) Limit of Volatile Organic Compounds Content (VOCs) in Printing Ink (GB 38507-2020).
III. How to Ensure Compliance with VOCs Product Quality Standards
1. Determine the applicability of the standards and observe the applicable standards. First of all, enterprises should learn the relevant standards and then determine whether they are applicable to their own products or raw materials. If the standards are applicable and cannot be exempted, it is necessary to consider modifying the product design or replacing suppliers as soon as possible according to the actual situation of the industries and the enterprises. In practice, we understand that enterprises may have some confusion regarding the scope of the products where such standards would be applied and the exemption requirements. Given the limited length of this article, we will not go into great detail regarding such standards and we do suggest enterprises consult specialist environmental lawyers regarding specific issues.
2. Strengthen supplier management. Supply chain compliance is of great significance to enterprise compliance, and enterprises should pay close attention to relevant compliance reviews, as well as the management and training of suppliers, to avoid the risk of non-compliance caused by the suppliers. At the same time, enterprises should protect themselves at the contract level to control and reduce the risks brought about by the suppliers’ non-compliance.
3. Follow up new regulations and enforcement actions. Enterprises should also pay close attention to the new implementation regulations issued and the enforcement actions related to VOCs taken by the Administration for Market Regulation, MIIT and MEE, etc. They should understand the key focus of regulatory supervision, and continuously improve the compliance management of both themselves and their suppliers.
IV. Conclusions and Suggestions
Before the new VOCs product quality standards come into effect, enterprises should implement the relevant requirements of product quality standards for VOCs products produced, imported, used and sold, strengthen supplier management, and make corresponding preparations.
