Supplementary memorandum from the Department for Environment, Food and Rural Affairs
When I appeared before your Committee on Monday 15 April, I promised to write with further details on two issues—the mechanisms by which the initial £6 million would be paid to waste disposal authorities and the point at which I became aware of the problems associated with fridge recycling. In addition, I think it might be helpful if I provided further information on Customs and Excise's enforcement policy, the UK's options for implementation of the Regulation, and the Department's actions since June 2001.
The £6 million has been added to Revenue Support Grant as part of the Local Government Finance Settlement 2002-03. The amount of grant an individual council receives is dependent on Standard Spending Assessments, which are the basis for distributing grant between authorities. The formulas that underpin these Assessments take account of the population, social structure and other characteristics of each authority and there is a separate Assessment for the major service areas including environmental, protective and cultural services (EPCS). The £6 million was added to the EPCS Standard Spending Assessment. Revenue Support Grant is paid to local authorities in instalments. The first instalments were paid on 3 April and 15 April. Further payments will be made on 23 April then twice monthly thereafter.
The first note I received about the problems caused by the Regulation regarding the recycling of fridges in the UK was in July 2001, which explained the effects of the Commission's interpretation of Article 16(2). This advice made clear that the interpretation could lead to significant additional costs and that it was unlikely that facilities would be in place before January 2002. Industry representatives had suggested at a meeting in February 2001 that treatment plants could be operational by the end of the year, if they had early confirmation that there would be an operational market and demand for their service. This was confirmed again by an email received from potential recyclers in April 2001.
Customs and Excise officers started to enforce EC Regulation 2037/2000 after it came into force in October 2000. The Regulation itself was published on 29 September 2000. Customs and Excise officials first wrote to export staff at ports and airports specifically on the issue of fridges containing CFCs in December 2000. Prior to that, DETR officials had written to stakeholders such as exporters and retailers in November 2000. Neither of these communications referred to foam containing CFCs, focusing only on CFC coolants, since the issues concerning CFC-blown foam in fridges were still being debated within the European Community.
I also feel I should further clarify that there was no real scope for the UK to seek derogation from the Regulation. Any applications for derogation would have required the agreement of both the Commission and a qualified majority of Member States. This would have been extremely difficult to achieve and impossible in the time available.
Finally, I am concerned that the discussion on Monday did not reflect adequately the real progress made since June 2001 towards resolving the problems that have arisen from the late clarification of the application of Article 16(2) to foams. As soon as the European Commission reached a final decision, DEFRA and DTI worked quickly to allow investment in treatment facilities to take place. My memorandum explains the steps that were taken to develop standards for both treatment and storage and to ensure that information about the effects of the Regulation was widely disseminated and understood.
The effectiveness of the Government's action is reflected in the speed with which the first orders for plant costing several millions of pounds were placed—just four months after the Commission clarified that foam treatment was necessary. However, this progress could clearly not have been achieved without the full co-operation of other interested parties. I think that the stakeholder meetings that we have organised since last summer have been extremely useful and have demonstrated Government's firm commitment to finding and delivering solutions.
Department for Environment, Food and Rural Affairs
1 May 2002
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