Decree of the State Council of the People's Republic of China
No. 779
The Regulations on Compensation for Ecological Protection, adopted at the 26th executive meeting of the State Council on February 23, 2024, are hereby promulgated and shall come into force as of June 1, 2024.
Premier Li Qiang
April 6, 2024
Regulations on Ecological Protection Compensation
general provisions
Article 1 These Regulations are formulated in accordance with relevant laws in order to protect and improve the ecological environment, strengthen and standardize ecological protection compensation, mobilize the enthusiasm of all parties to participate in ecological protection, and promote the construction of ecological civilization.
Article 2 These Regulations shall apply to ecological protection compensation and related activities in the territory of the People's Republic of China and other sea areas under its jurisdiction. Where laws and administrative regulations provide otherwise, such provisions shall prevail.
The term "ecological protection compensation" as mentioned in these Regulations refers to the incentive institutional arrangements for compensating the units and individuals that carry out ecological protection according to regulations or agreements through such mechanisms as financial vertical compensation, interregional horizontal compensation, market mechanism compensation, etc. Ecological protection compensation can be made by means of capital compensation, counterpart cooperation, industrial transfer, talent training, joint construction of parks, purchase of ecological products and services and other compensation methods.
The units and individuals referred to in the preceding paragraph include local people's governments at various levels, villagers' committees, residents' committees, rural collective economic organizations and their members, as well as other units and individuals that should be compensated.
Article 3 The work of ecological protection compensation should adhere to the leadership of the Communist Party of China, adhere to the combination of government leadership, social participation and market regulation, adhere to the equal emphasis on incentives and constraints, adhere to coordinated development, and adhere to the integration of ecological benefits, economic benefits and social benefits.
Article 4 People's governments at or above the county level should strengthen the organization and leadership of ecological protection compensation, incorporate ecological protection compensation into national economic and social development plans, and build a stable mechanism for investment of ecological protection compensation funds.
The people's government at or above the county level may, in accordance with the law, expand the channel of funds for ecological protection compensation in various ways.
Article 5 The development and reform, finance, natural resources, ecological environment, water administration, housing and urban and rural construction, agriculture and rural areas, forestry and grassland and other departments of the State Council are responsible for ecological protection compensation according to their respective responsibilities.
Article 6 Local people's governments at or above the county level shall establish and improve relevant mechanisms for ecological protection compensation, and urge their subordinate departments and people's governments at lower levels to carry out ecological protection compensation. The relevant departments of the local people's governments at or above the county level shall be responsible for the work related to ecological protection compensation according to their respective responsibilities.
Article 7 Units and individuals who have made outstanding achievements in the work of ecological protection compensation shall be commended and rewarded in accordance with the relevant provisions of the State.
Chapter II Financial Vertical Compensation
Article 8 The state compensates the units and individuals that carry out the protection of important ecological environmental elements, as well as the units and individuals that carry out ecological protection in the key ecological functional areas, ecological protection red lines, nature reserves and other ecological functional areas designated according to law, through financial transfer payments and other means.
Article 9 For units and individuals carrying out protection of important ecological environment elements, the central finance will implement compensation according to the following categories (hereinafter referred to as "classified compensation"):
（1） Forest;
（2） Grassland;
（3） Wetland;
（4） Desert;
（5） Ocean;
（6） Flow;
（7） Cultivated land;
（8） Other important ecological environment elements such as aquatic biological resources, terrestrial wild animal and plant resources stipulated by laws, administrative regulations and the state.
The specific scope and method of compensation specified in the preceding paragraph shall be determined by classification in consideration of regional economic and social development level, financial affordability, ecological protection effect and other factors, and shall be announced to the public in accordance with the law, together with the use of compensation funds and their supervision and management. The specific measures for the classified compensation of the central finance shall be formulated by the competent department of the State Council in conjunction with other relevant departments in different fields.
Article 10 On the basis of classified compensation by the central government, and in accordance with the principle of dividing the central and local financial powers and expenditure responsibilities, the relevant local people's governments can establish a classified compensation system in combination with the actual situation in their own regions to increase the compensation capacity of units and individuals carrying out the protection of important ecological and environmental elements.
Where laws, administrative regulations or the provisions of the State Council require the central and local finance to jointly contribute to the implementation of classified compensation or the local finance to contribute to the implementation of classified compensation, the relevant local people's governments shall timely allocate funds in accordance with the provisions.
Article 11 The central government will arrange transfer payments for key ecological functional areas, and gradually increase the scale of transfer payments in combination with financial conditions. According to the characteristics of spillover of ecological benefits, importance of ecological functions, sensitivity and vulnerability of ecological environment, differential compensation is implemented in the transfer payment of key ecological functional areas, and more support is given to areas with high ecological protection red line coverage.
The financial department of the State Council formulates the management measures for transfer payment in key ecological functional areas, and defines the scope of transfer payment and the distribution method of transfer payment funds.
Article 12 The state has established and improved the ecological protection compensation mechanism of the nature reserve system with national parks as the main body. The central and local finance will compensate the units and individuals that carry out the protection of nature reserves by classification and grading, and determine the scale of transfer payment reasonably according to the type, level, scale and management and protection effect of nature reserves.
Article 13 The ecological protection compensation funds obtained by local people's governments and their relevant departments shall be used according to the specified purposes.
The local people's governments and their relevant departments shall timely compensate the ecological protection compensation funds to the units and individuals that carry out ecological protection in accordance with the regulations, and shall not withhold, occupy, misappropriate or default.
The ecological protection compensation funds used by the local people's governments as a whole shall be used in priority for the protection of natural resources, the treatment and restoration of the ecological environment, etc.
The relevant local people's government where the ecological protection area is located shall, in accordance with the relevant provisions of the State, steadily promote the coordinated use of ecological protection compensation funds from different channels to improve the overall benefits of ecological protection.
Chapter III Horizontal Compensation between Regions
Article 14 The State encourages, guides and promotes the people's governments of ecological benefit areas and ecological protection areas to establish ecological protection compensation mechanisms through consultation and other means, and carry out inter regional horizontal ecological protection compensation.
According to the actual needs of ecological protection, the people's government at a higher level can organize and coordinate the people's government at a lower level to carry out inter regional horizontal ecological protection compensation.
Article 15 Inter regional horizontal ecological protection compensation is carried out for the following areas:
（1） The upstream and downstream, left and right banks, and main and tributaries of river basins;
（2） Areas where important ecological environment elements are located and other areas with important ecological functions;
（3） Water source areas of major water diversion projects and protection areas along the line;
（4） Other areas where ecological protection compensation is carried out according to the agreement.
Article 16 The central finance and provincial finance can provide guidance and support for carrying out interregional horizontal ecological protection compensation in key areas of trans provinces, autonomous regions, municipalities directly under the Central Government and trans autonomous prefectures and cities divided into districts where ecological functions are particularly important.
The development and reform departments of the State Council, finance departments and other departments can give appropriate support in planning, funding, project arrangements and other aspects to those who have achieved remarkable results in carrying out inter regional horizontal ecological protection compensation.
Article 17 To carry out inter regional horizontal ecological protection compensation, the relevant local people's governments shall sign a written agreement (hereinafter referred to as the compensation agreement), specifying the following matters:
（1） Specific scope of compensation;
（2） Expected objectives of ecological protection and its monitoring and evaluation indicators;
（3） Ecological protection responsibility of ecological protection areas;
（4） Compensation methods and relevant arrangements for implementing compensation;
（5） Term of the agreement;
（6） Handling of breach of agreement;
（7） Other matters.
In determining the content of the compensation agreement, factors such as the current situation of ecological protection, the cost of ecological protection, the effectiveness of ecological protection, the level of regional economic and social development, and financial affordability should be comprehensively considered.
The funds for ecological protection compensation obtained by ecological protection areas shall be used for the protection of natural resources, the treatment and restoration of ecological environment, economic and social development, and the improvement of people's livelihood in the area. If it is necessary to make compensation directly to units and individuals, they shall make compensation in time according to regulations, and may not withhold, occupy, misappropriate or default.
Article 18 The relevant local people's governments shall strictly implement the compensation agreements signed. Ecological protection areas shall implement ecological protection measures in accordance with the agreement, and ecological benefit areas shall actively perform compensation responsibilities in accordance with the agreement.
If a dispute arises from the performance of the compensation agreement, the relevant local people's government shall settle it through consultation; If the consultation fails, it shall be reported to the common people's government at the next higher level for coordination. When necessary, the common people's government at the next higher level may make a decision, and the local people's government concerned shall implement it.
Article 19 The relevant local people's government may renew the compensation agreement according to actual needs after the expiration of the compensation agreement, and may renegotiate the relevant matters when renewing the compensation agreement.
Chapter IV Market Mechanism Compensation
Article 20 The state gives full play to the role of market mechanism in ecological protection compensation, promotes the market-oriented development of ecological protection compensation, and expands the value realization mode of ecological products.
Article 21 The State encourages enterprises, public welfare organizations and other social forces as well as local people's governments to carry out ecological protection compensation by purchasing ecological products and services in accordance with market rules.
Article 22 The state has established and improved trading mechanisms for carbon emission rights, emission rights, water use rights, carbon sink rights and interests, promoted the construction of trading markets, and improved trading rules.
Article 23 The state encourages and supports the organic integration of ecological protection and ecological industry development. On the premise of ensuring ecological benefits, it adopts various ways to develop ecological industries, promotes the transformation of ecological advantages into industrial advantages, and improves the value of ecological products.
The development of ecological industry should improve the participation mode of rural collective economic organizations and rural residents, establish a sustainable benefit sharing mechanism, and promote the interests of ecological protection subjects to be effectively compensated.
Local people's governments at all levels should, according to actual needs, speed up the cultivation of the main body of ecological product market operation and development, and give full play to its advantages and roles in integrating ecological resources, coordinating the implementation of ecological protection, providing professional technical support, and promoting the docking of supply and demand of ecological products.
Article 24 The State encourages and guides social funds to establish market-oriented ecological protection compensation funds and participate in ecological protection compensation in an orderly manner according to law.
Chapter V Guarantee, Supervision and Administration
Article 25 The government and its relevant departments shall, in accordance with the provisions, issue and allocate compensation funds for ecological protection in a timely manner to ensure that the compensation funds are in place.
The government and its relevant departments should strengthen the supervision and management of the use of funds, implement the budget performance management of ecological protection compensation funds in accordance with the provisions, and improve the incentive and restraint mechanism for the implementation of ecological protection responsibilities.
Article 26 The state promotes the unified right confirmation and registration of natural resources, improves the monitoring support system for ecological protection compensation, establishes the statistical system for ecological protection compensation, improves the compensation standard system for ecological protection, and provides technical support for ecological protection compensation.
Article 27 The state improves the fiscal, financial and other policies and measures matched with ecological protection compensation, gives play to the regulatory function of fiscal and tax policies, and improves the green financial system.
Article 28 The state has established and improved a unified green product standard, certification and identification system, promoted the market construction of green products, implemented the government's green procurement policy, and established a green procurement guidance mechanism.
Article 29 The government and relevant departments should strengthen the publicity of ecological protection compensation policies and implementation effects through various forms to create a good social atmosphere for ecological protection compensation.
Article 30 The government and relevant departments shall disclose the work of ecological protection compensation in a timely manner according to law, and accept social supervision and public opinion supervision.
Audit institutions shall audit and supervise the management and use of ecological protection compensation funds according to law.
Article 31 In case of withholding, occupying, misappropriating, defaulting or failing to use the ecological protection compensation funds in accordance with the regulations, the government and the relevant competent departments shall order correction; If it fails to make corrections within the time limit, it may postpone, reduce, suspend or recover the ecological protection compensation funds.
Those who defraud ecological protection compensation funds by false means shall be dealt with and punished by the government and relevant competent departments according to laws and regulations; If a crime is constituted, criminal responsibility shall be investigated according to law.
Article 32 If the government, relevant departments and their staff commit dereliction of duty or malfeasance in the work of ecological protection compensation, they shall be investigated for responsibility according to law and regulations.
Chapter VI Supplementary Provisions
Article 33 These Regulations shall come into force as of June 1, 2024.
