Environmental Protection and New Energy Full Industry Chain Welcome Value Reassessment

Chinese Securities Journal Reporter Liu Yang and Zheng Cuiying

On March 12, the Fourth Session of the 14th National People’s Congress approved the “Civil Code of the People’s Republic of China for Ecological and Environmental Protection,” marking a new stage in China’s ecological and environmental governance. Industry experts generally believe that the market valuation of the environmental protection and new energy industries will show “long-term and structural” characteristics. Related sub-sectors will enter a period of concentrated policy benefits, and the industry competitive landscape and profit models will undergo fundamental reshaping.

Environmental Protection Industry Shifts from “Project-Driven” to “Value-Oriented”

The Ecological and Environmental Protection Law will take effect from August 15, 2026.

Analysts say the law will change the long-standing development logic of the environmental protection industry, promoting a shift from an extensive project-driven model to a dual-driven model of refined operations and resource utilization, with valuation centers expected to continue rising.

The law establishes the basic principle of “liability for damage,” achieving a qualitative change from “polluters pay” to “damage perpetrators are responsible.” The strict liability principle compels companies to extend environmental risk prevention and control to “zero damage,” also providing stable demand growth for environmental protection companies.

Ecological restoration and environmental operation sectors are direct beneficiaries. Analysts believe that the law’s principle of “mainly natural recovery with supplementary artificial restoration” incorporates integrated management of mountains, rivers, forests, fields, lakes, grasslands, sand, and deserts into the legal framework, with increased central government financial incentives, benefiting leading ecological restoration companies with technological barriers and regional advantages.

Wang Zhaoming, a National People’s Congress deputy and founder of Mengcao Ecology, stated that the law incorporates native grass species into regulations, strengthening the legal foundation for ecological protection strategies such as the “Three North” project, and promoting ecological restoration toward scientific and refined approaches.

The law also strictly combats environmental data falsification, raising the entry barriers for the environmental monitoring industry, promoting updates and iterations of monitoring equipment, and creating opportunities for leading monitoring companies to increase market concentration.

Reconstructing the Development Pattern of the New Energy Industry Chain

The law separately establishes a chapter on “Green and Low-Carbon Development,” a pioneering move globally, transforming the “dual carbon” goals from policy language into legal obligations. This provides legal support for sectors such as clean energy, new storage, and resource recycling, becoming a core catalyst for the valuation re-estimation of the industry chain.

The clean energy sector faces development opportunities. The law explicitly promotes climate change mitigation through carbon peaking and carbon neutrality targets, with regulations on total and intensity-based carbon emissions, further pushing high-energy-consuming industries to transition to clean energy. Leading companies in wind power, photovoltaics, and other renewable energy sectors will continue to benefit. The law also emphasizes a combination of centralized and distributed development, accelerating the construction of wind and solar power bases, providing specific guidance for clean energy development.

A research report from China Securities emphasizes that the implementation of the law will not only catalyze short-term themes but also reshape the long-term development pattern of the new energy industry chain, driving related industries from policy guidance to legal enforcement.

Tian Lihui, director of the Nankai University Institute of Financial Development, believes that the law opens up a blue ocean for institutional investment and injects strong momentum into the valuation re-estimation of the industry chain.