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China’s new Environmental Protection Tax Law came into effect on January 1, 2018. It replaces the old Pollutant Discharge Fees System, which has been in place, unchanged, for the past 15 years. The overhaul of the environmental taxation system is just one of many recent steps China’s central government has taken to strengthen environmental governance in an ongoing effort to significantly reduce industrial pollution. In this research brief, we look at how the new tax differs from the old fee-based system, and what those changes will mean for tax amounts payable as well as broader considerations regarding investments in environmental management systems.