Climate Change Litigation in China

Climate change litigation in China: where it stands in 2026

Climate change litigation in China is at an early but fast-moving stage. Unlike the headline cases in Europe, where citizens have sued governments over emissions targets or claimants have sought damages from oil and power majors, Chinese climate-related cases have mostly been brought within existing frameworks: environmental public interest litigation, ecological damage claims, carbon market contract disputes and administrative challenges. The Supreme People's Court (SPC) treats climate response cases as a distinct category of environmental and resources case, and in June 2026 its annual environmental justice report reviewed a decade of climate-related rules and decisions.

The legal ground shifted decisively on 15 August 2026, when the Ecological Environment Code took effect. Adopted by the National People's Congress on 12 March 2026, the Code consolidates China's main environmental statutes into a single instrument of five parts and 1,242 articles, repeals ten existing laws including the Environmental Protection Law, and contains a part on green and low-carbon development with provisions on addressing climate change. For the first time, carbon peaking and neutrality goals are anchored in a national code rather than in policy documents alone.

For multinational groups, Chinese exporters and investors, the practical question is how these developments translate into risk. This page explains the domestic routes by which climate change litigation can arise, the related disclosure and carbon market exposures, the international developments that shape claims against Chinese companies abroad, and the steps boards can take now. It is general information about the legal environment; PRC law questions should be confirmed with a licensed PRC law firm.

Legal bases for climate claims in China

There is no stand-alone climate change statute in China, and Chinese courts have been cautious about claims that seek to hold a single emitter liable for the global effects of greenhouse gases. Climate-related claims instead rely on a combination of sources.

• The Ecological Environment Code. It restates and consolidates pollution control, ecological protection and liability rules, keeps environmental public interest litigation, and introduces a chapter on addressing climate change, including a framework for controlling carbon emissions.
• The Civil Code. Its "green principle" requires civil activities to save resources and protect the environment, and its tort book imposes liability for pollution and ecological damage, including restoration costs, compensation for loss of ecological services and, for intentional violations with serious consequences, punitive damages.
• Carbon market rules. The State Council's Interim Regulations on the Administration of Carbon Emission Trading, effective 1 May 2024, give a legal basis to the national emissions trading scheme, with obligations on emissions data, verification and allowance surrender, and penalties for falsification.
• Procedural law. The Civil Procedure Law and Administrative Litigation Law allow qualified organisations and procuratorates to bring public interest actions.
• Disclosure and consumer rules. Securities law, exchange sustainability reporting rules, advertising law and the revised Anti-Unfair Competition Law can each found claims over misleading climate statements.

The SPC has supplemented these sources with judicial guidance. In February 2023 it issued opinions on providing judicial services for carbon peaking and carbon neutrality, accompanied by typical cases on industrial transition, clean energy and carbon trading. It has also issued interpretations on punitive damages in ecological tort cases and on injunctions to stop ongoing environmental harm, both of which can be used in climate-adjacent claims.

Types of climate change litigation seen in China

Commentators often distinguish between climate change litigation in the narrow sense, where climate change is the core issue, and the much larger group of cases where emissions reduction or adaptation is one consideration among several. In China, most cases fall into the second group. The table below summarises the main categories and their relevance for business.

The SPC's June 2026 report identified the claim brought by the environmental organisation Friends of Nature against a provincial grid company over the curtailment of wind and solar power as China's first climate change case in the narrow sense. The case ran for around seven years and ended in mediation. The report also noted that climate litigation in China remains at an initial stage, with concepts, case types and rules still developing, and suggested clarifying the legal nature of carbon allowances and offsets and refining rules on causation for long-term cumulative harm.

How public interest and ecological damage claims work

Because most climate-related claims in China travel through the public interest and ecological damage routes, it helps to understand how those procedures operate in practice. A civil public interest action is usually filed by a qualified environmental organisation or by a procuratorate with an intermediate people's court that has jurisdiction over the place of the harm or the defendant. Many provinces have specialised environmental and resources tribunals, and some cross-regional courts hear cases affecting river basins or ecological zones.

Remedies focus on stopping the harm and restoring the environment. Courts can order a defendant to cease the conduct, carry out restoration or pay restoration costs, compensate for the loss of ecological services during the period before restoration, and bear assessment and reasonable litigation costs. Where an intentional violation causes serious consequences, punitive damages may be available. Settlements and mediated outcomes are common, but they are typically subject to public notice and court review to protect the public interest.

Ecological damage compensation is a parallel, government-led system. Provincial and municipal governments, or the departments they designate, can demand compensation from those responsible for serious environmental damage, first through consultation and then, if no agreement is reached, through litigation. For a foreign-invested manufacturer, a single pollution incident can therefore lead to administrative penalties, a government compensation demand and a public interest suit, each with its own timetable.

A worked example shows the interaction. Suppose an emissions control failure at a chemical plant releases pollutants into a river, and the plant's operating company has also marketed its products as "low carbon". The local environment bureau imposes a fine and orders rectification; the municipal government opens a compensation consultation; an environmental organisation files a public interest claim; and a competitor complains about misleading publicity. A coordinated response would address restoration first, quantify damage with credible expert support, align statements to all authorities, and correct marketing claims quickly, rather than treating each track in isolation.

Carbon market and disclosure risks

China's national emissions trading scheme began with the power sector in 2021. The Ministry of Ecology and Environment has since extended it to steel, cement and aluminium smelting, and voluntary emissions reductions through the China Certified Emission Reduction (CCER) programme restarted in 2024. As allowances and offsets gain commercial value, disputes over their sale, delivery, pledge and enforcement are becoming more common, and so are enforcement actions over falsified monitoring and verification data. Our page on carbon markets and CCER covers the regime in more detail.

Disclosure obligations are expanding at the same time. In April 2024 the Shanghai, Shenzhen and Beijing stock exchanges issued sustainability reporting guidelines that make reporting mandatory for constituents of key indices and companies listed both onshore and offshore, with the first mandatory reports covering 2025 published in 2026. The Ministry of Finance issued a basic standard on corporate sustainability disclosure in late 2024 as the foundation of a national framework. In Hong Kong, enhanced climate-related disclosure requirements under the HKEX ESG code have applied since 1 January 2025.

Misstatements in these disclosures can lead to regulatory penalties and, in principle, civil claims under the securities misrepresentation regime, which since 2020 includes a representative action mechanism. Product-level claims such as "zero carbon" or "carbon neutral" are policed under advertising law and the revised Anti-Unfair Competition Law. See our pages on ESG disclosure and greenwashing and securities misrepresentation class actions.

Contract disputes linked to the energy transition are a further and growing category. Changes in power market rules, curtailment, the cancellation of subsidies or the tightening of energy and emissions controls can upset long-term supply, offtake and project agreements. Parties typically argue force majeure, change in law or the Civil Code's change of circumstances doctrine. Policy changes that were signalled in advance may well be treated as foreseeable commercial risks rather than unforeseeable events, so contracts should allocate carbon costs and regulatory changes expressly rather than relying on general doctrines.

International climate change litigation and Chinese companies

Outside China, climate change litigation has matured quickly, and Chinese companies with overseas assets, listings or supply chains are increasingly within its reach. Several recent decisions set the tone:

• the International Court of Justice's advisory opinion of 23 July 2025, which concluded that states have obligations under international law to protect the climate system and that breaches may engage state responsibility;
• the advisory opinion of the International Tribunal for the Law of the Sea of May 2024, treating greenhouse gas emissions as marine pollution under the UN Convention on the Law of the Sea;
• the European Court of Human Rights' April 2024 judgment against Switzerland in the KlimaSeniorinnen case, linking inadequate climate action to human rights obligations;
• a German appellate court's May 2025 decision in a Peruvian farmer's claim against a German utility, which dismissed the claim on its facts but accepted that major emitters can in principle be liable for climate-related risks.

For Chinese groups, the most likely routes are claims in host states against mining, energy and infrastructure projects, challenges to environmental approvals, and greenwashing claims in Europe, Australia or the United States. EU due diligence and sustainability reporting legislation, although narrowed by the EU's 2025-2026 simplification package, still affects large groups with significant EU business. Investment treaty claims can also run in the other direction, where a host state's climate measures damage a Chinese investment. Our pages on ESG and carbon in China and overseas compliance for Chinese enterprises discuss these issues.

When a claim is brought abroad, early decisions shape the outcome. Defendants need to consider whether the foreign court has jurisdiction over a Chinese parent or only over a local subsidiary, whether parent company liability theories developed in English and Dutch courts could apply, how documents held in China can be produced consistently with Chinese data export and state secrets rules, and whether any judgment would ultimately need to be enforced in the mainland. Each of these questions involves both foreign law and the Chinese legal environment, and they are best answered before the first filing rather than after.

Managing climate change litigation risk: a board checklist

Climate change litigation risk is best managed through governance and evidence rather than reaction. A practical checklist for boards and general counsel of businesses operating in or from China includes:

1. Map exposure. Identify facilities in the national emissions trading scheme, high-emission or ecologically sensitive operations, listed entities with sustainability reporting duties, and products marketed with climate claims.
2. Audit claims. Review every public statement about carbon neutrality, net zero, offsets or emissions reductions against the underlying data and methodology.
3. Control data. Treat emissions monitoring, reporting and verification as a compliance function with sign-off, record retention and third-party assurance where appropriate.
4. Review contracts. Address allowance and offset delivery, price adjustment for carbon costs, change in law and hardship, and responsibility for emissions data in supply and offtake contracts.
5. Plan for incidents. Prepare for pollution or ecological damage incidents that may trigger public interest claims or government compensation demands, including rapid restoration and engagement with authorities.
6. Align disclosures across markets. Ensure statements in China, Hong Kong, the EU and the US are consistent, because inconsistencies are a common source of claims.

The Ecological Environment Code is still new, and its implementing measures and judicial interpretations will continue to emerge through 2027. Companies should expect further guidance on carbon emissions controls, the legal nature of allowances and the evidentiary rules for public interest cases. Monitoring these developments is part of managing climate change litigation risk.

How TRW & Co helps with climate change litigation

TRW & Co's Shenzhen representative office helps multinational groups operating in China, and Chinese companies investing abroad, to understand and manage climate change litigation and related regulatory risk. We map exposure across jurisdictions, review sustainability disclosures and green claims against international standards, advise on English law, Hong Kong law and other non-PRC laws governing carbon trading, offtake and financing contracts, and prepare strategy for disputes and investment treaty claims outside the mainland. Where PRC legal advice, regulatory filings or representation before mainland courts and authorities are required, we coordinate with licensed PRC law firms and keep the overall response consistent. To discuss your position, please contact us.