{"id":373202,"date":"2026-01-20T10:00:29","date_gmt":"2026-01-20T04:30:29","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=373202"},"modified":"2026-01-19T18:30:40","modified_gmt":"2026-01-19T13:00:40","slug":"environmental-protection-fund-rules-2026-explained","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/01\/20\/environmental-protection-fund-rules-2026-explained\/","title":{"rendered":"Overview of Environmental (Protection) Fund Rules, 2026"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 15-1-2026, the Ministry of Environment, Forest and Climate change notified the <span style=\"font-weight: bold;\">Environmental (Protection) Fund Rules, 2026<\/span>, introducing a unified national mechanism for collecting, allocating, and utilizing environmental penalties for measurable and accountable environmental protection activities.<\/p>\n<h3>Key points:<\/h3>\n<ol style=\"list-style-type: decimal;\">\n<li>\n<p>These Rules have been framed under Sections <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001547615\" target=\"_blank\">6<\/a> and <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001547609\" target=\"_blank\">25<\/a> of the <span style=\"font-weight: bold;\"><a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002808050\" target=\"_blank\">Environment (Protection) Act, 1986<\/a><\/span>.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Rule 2<\/span> explains the relevant terms essential for the interpretation of these Rules.<\/p>\n<\/li>\n<li>\n<p>Under these Rules, the <span style=\"font-weight: bold;\">Environmental Protection Fund<\/span> is created in the Public Account of India to ensure that environmental penalties are used exclusively for environmental restoration, monitoring, and improvement activities.<\/p>\n<\/li>\n<li>\n<p>These Rules outline the purposes for which the <span style=\"font-weight: bold;\">Environmental Protection Fund<\/span> and how it will be utilised, ensuring transparent, accountable, and need-based environmental protection activities.<\/p>\n<\/li>\n<li>\n<p>The Fund will be used for:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Environmental monitoring equipment<\/p>\n<\/li>\n<li>\n<p>Environmental laboratories<\/p>\n<\/li>\n<li>\n<p>Research related to clean technologies<\/p>\n<\/li>\n<li>\n<p>Assessment and remediation of environmental damage<\/p>\n<\/li>\n<li>\n<p>Capacity building and strengthening of regulatory institutions such as:<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; SEIAA<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; SEAC<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; CPCB<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; SPCBs<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Pollution Control Committees<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Commission for Air Quality Management<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Urban Local Bodies<\/p>\n<\/li>\n<li>\n<p>Development of IT enabled systems and related equipment<\/p>\n<\/li>\n<li>\n<p>Studies directed by Courts and Tribunals<\/p>\n<\/li>\n<li>\n<p>Awareness generation projects, including through eco clubs<\/p>\n<\/li>\n<li>\n<p>Demonstration projects involving innovative environmental technologies<\/p>\n<\/li>\n<li>\n<p>Measures for prevention, control, and mitigation of environmental pollution<\/p>\n<\/li>\n<li>\n<p>Administrative expenses (up to 5% of available funds)<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>The Fund will not be used for:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Payment of medical expenses<\/p>\n<\/li>\n<li>\n<p>Foreign visits<\/p>\n<\/li>\n<li>\n<p>Construction of office buildings or residences<\/p>\n<\/li>\n<li>\n<p>Purchase of furniture, office equipment, vehicles, ACs, generators, etc. for government offices<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>The following amounts will be credited into <span style=\"font-weight: bold;\">Environmental Protection Fund<\/span>:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Penalties imposed under:<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002806283\" target=\"_blank\">Air (Prevention and Control of Pollution) Act, 1981<\/a><\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002823103\" target=\"_blank\">Water (Prevention and Control of Pollution) Act, 1974<\/a><\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002808050\" target=\"_blank\">Environment (Protection) Act, 1986<\/a><\/p>\n<\/li>\n<li>\n<p>Incomes under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001547599\" target=\"_blank\">16(2)<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002808050\" target=\"_blank\">Environment Protection Act<\/a>.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Rule 5<\/span> outlines the manner in which the funds will be credited:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>The amount credited will be deposited online via the <span style=\"font-weight: bold;\">Bharatkosh<\/span> portal.<\/p>\n<\/li>\n<li>\n<p>All payments made through Bharatkosh will be first credited to the Consolidated Fund of India (&#8216;CFI&#8217;).<\/p>\n<\/li>\n<li>\n<p>Credited amount will be transferred to the Public Account of India under the Environmental Protection Fund (&#8216;EPF&#8217;) in accordance with prescribed accounting procedures.<\/p>\n<\/li>\n<li>\n<p>Distribution between <span style=\"font-weight: bold;\">Centre and States<\/span>:<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; 75% of the collected penalty is remitted by the Administrator to the Consolidated Fund of the respective State\/Union Territory.<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; 25% is retained by the Central Government.<\/p>\n<\/li>\n<li>\n<p>Each State\/UT, upon receiving its share, must credit the amount into a dedicated Reserve Fund within the Public Account of the State\/UT.<\/p>\n<\/li>\n<li>\n<p>The Reserve Fund can be utilized for purposes specified under Rule 3 and Section 16 of the Act.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>Under <span style=\"font-weight: bold;\">Rule 6<\/span>, the Fund will be administered through dedicated <span style=\"font-weight: bold;\">Project Management Units<\/span> (&#8216;PMUs&#8217;) established by the Centre and each State\/UT, headed by a Joint Secretary or State Secretary.<\/p>\n<\/li>\n<li>\n<p>All payments will be submitted and States\/UTs will be required to annually report total funds received, utilized, and remaining balances.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Rule 8<\/span> clarifies that the Fund will be audited by the Comptroller and Auditor General (&#8216;CAG&#8217;).<\/p>\n<\/li>\n<li>\n<p>The <span style=\"font-weight: bold;\">Central Pollution Control Board<\/span> (&#8216;CPCB&#8217;) will develop and maintain a dedicated online portal that will serve as the exclusive interface for all authorities and stakeholders involved in implementing these Rules once it becomes operational.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">Environment Ministry has notified the Environmental Protection Fund Rules, 2026, which govern the collection, allocation, and utilization of environmental penalties.<\/p>\n","protected":false},"author":67525,"featured_media":373205,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,15],"tags":[97117,5731,48456,74183,97116,53869,6631,97114,97112,97113,97115],"class_list":["post-373202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislationupdates","category-rules_regulations","tag-bharatkosh-portal","tag-central-pollution-control-board","tag-environment-protection-act-1986","tag-environment-ministry","tag-environment-penalties","tag-environmental-governance","tag-environmental-laws","tag-environmental-penalties","tag-environmental-protection-fund","tag-environmental-protection-fund-rules-2026","tag-fund-administration"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - 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