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323. This clause provides for the piloting of waste reduction schemes.
324. Subsection (1) provides that a waste collection authority which wishes to make a pilot waste reduction scheme in its area must submit its proposals to the Secretary of State for approval. If the Secretary of State considers that the proposals are suitable for piloting one or more aspects of the waste reduction provisions, the Secretary of State may make an order designating the area of that authority as a pilot area, so that the authority may make a scheme in accordance with the approved proposals.
325. Subsection (2) provides that not more than five areas may be designated as pilot areas.
326. Subsection (3) stipulates what the Secretary of State's order designating a pilot area must provide. The order must state that the waste reduction provisions shall have effect in relation to that area for the purpose of enabling the authority to make and operate the proposed scheme, and state the period for which the waste reduction provisions are to be allowed to take effect.
327. Subsection (4) allows the Secretary of State, in making subordinate legislation or issuing guidance about waste reduction schemes, to make different provision for different pilot areas, and the Secretary of State may exercise these powers at the same time as he makes the order designating that area as a pilot area. The effect of this provision is to allow the Secretary of State to bring the whole regime for a pilot area, including guidance, into force at once.
328. Subsection (5) provides that, where a draft order designating a pilot area under clause would otherwise be treated as a hybrid instrument under the standing orders of either House of Parliament, it is to proceed in that House as if it were not a hybrid instrument.
329. Subsection (1) imposes on the Secretary of State a duty to lay before Parliament a report on how the waste reduction provisions have operated in each pilot area.
330. Subsection (2) details what the report must contain, being a description of the scheme and how it compares with other schemes, a copy of the designation order made under clause 70, a description of how the relevant enactments and guidance in that pilot area differed from that applying in other pilot areas and in areas not designated, and an assessment of whether a scheme has been a success.
331. Subsection (3) provides that the Secretary of State's report must also review the waste reduction provisions in the light of their operation in the relevant pilot area or areas.
332. Subsection (1) provides that, if the Secretary of State considers that it will not be possible to lay a report under section 71 in relation to a pilot area within three years of this Act being passed, the Secretary of State must lay an interim report within the three years.
333. Subsection (2) provides that the interim report must contain: a description of the scheme and how it differs from other such schemes, a copy of the designating order, and a description of how the enactments and guidance applying in that pilot area differ from those applying in other pilot areas and in non-pilot areas.
334. Subsection (3) provides that, where a scheme has not yet been implemented, the interim report must describe progress towards its implementation.
335. Subsection (4) provides that, where a scheme has been implemented, the interim report must describe its operation and assess progress towards its objectives, if such an assessment can reasonably be made.
336. Subsection (1) states that subsections (2) to (6), which provide for the Secretary of State to roll out or repeal the waste reduction provisions, apply after the Secretary of State has laid a report before Parliament in accordance with clause 71.
337. Subsection (2) provides two options should the Secretary of State wish to roll-out the waste reduction provisions generally, so as to allow a scheme to be made for any area. Paragraph (a) allows the Secretary of State to make an order providing that the provisions shall come into force generally on a date specified in the order. Alternatively, paragraph (b) allows the Secretary of State to make an order making such amendments to the provisions as appear necessary or expedient in the light of how they operated in the pilot areas, and to provide that the provisions as so amended shall come into force generally on a date specified in the order.
338. Subsection (3) and subsection (4) provide that amendments made by an order under subsection (2)(b) may include provision for the Secretary of State to make subordinate legislation, in which case the amendments should also provide for such subordinate legislation to be subject to either the negative resolution procedure or the affirmative resolution procedure, as the Secretary of State thinks fit.
339. Subsection (5) provides that, should the Secretary of State decide not to make an order under subsection (2) which rolls out the waste reduction provisions generally, he must make an order repealing the provisions.
340. Subsection (6) provides that any order made under subsection (2)(b) or (5) must be made by affirmative resolution.
Clause 74 and Schedule 6: Renewable transport fuel obligations
341. This clause introduces Schedule 6 to the Bill. Schedule 6 amends Chapter 5 of Part 2 of the Energy Act 2004 which enables the Secretary of State to set up a renewable transport fuel obligations scheme ("RTFO scheme") by order ("RTF order").
342. An RTFO scheme is a scheme that requires specified transport fuel suppliers to produce evidence that for a specified period a specified amount of renewable transport fuel has been supplied at or for delivery to places in the United Kingdom. "Specified" for these purposes means specified in or determined in accordance with the RTF order. A "transport fuel supplier" means a person who, in the course of any business of his, supplies transport fuel at or for delivery to places in the United Kingdom. Renewable transport fuel means:
343. The Renewable Transport Fuel Obligations Order 2007 ("2007 order") was made under existing powers in the Energy Act 2004 on 25th October 2007. The 2007 order set up an RTFO scheme with the first obligation period to commence on 15th April 2008. The 2007 order also established the Office of the Renewable Fuels Agency (a non-departmental public body) ("RFA") and appointed the RFA as Administrator of the scheme.
344. The main changes to the Energy Act 2004 contained in Schedule 5 are explained in the following paragraphs. Some of the changes will enable the RTFO scheme to be altered by order in the future. These include the powers to appoint a new Administrator and transfer functions accordingly (in new section 125C) and the provisions about payments received by the Administrator under the scheme (in section 128 as amended). Other amendments will apply in relation to the scheme as soon as they come into force, such as the duty on the Administrator to promote renewable fuels which have a beneficial environmental effect (in new section 125A), the powers for the Secretary of State to give directions (in new section 125B and section 126 as amended) and the provisions for disclosure of information to the Administrator by Her Majesty's Revenue and Customs (in new sections 131A to 131C).
345. Paragraph 2 substitutes new sections 125, 125A, 125B and 125C of the Energy Act 2004 for the existing section 125 of that Act.
346. New section 125 deals with the appointment of the first Administrator of the RTFO scheme. The 2007 order appointed the RFA as the Administrator under section 125 as it currently stands. New section 125 replicates the provision currently in section 125 allowing an RTF order to establish a body corporate and to appoint that body as the Administrator. It will preserve the effect of the 2007 order.
347. New section 125A allows an RTFO order to confer or impose functions on the Administrator. It also imposes a new duty on the Administrator to promote the supply of renewable transport fuel which by its production, supply or use, causes or contributes to the reduction of carbon emissions and contributes to sustainable development or to environmental protection or enhancement.
348. New section 125B(1) makes further provision about the functions of the Administrator. Paragraphs (a) and (b) re-enact the provision currently in section 125(3)(a) and (b) of the Energy Act in enabling powers to be conferred on the Administrator to require information from fuel suppliers; paragraph (c) re-enacts the provision currently in section 125(3)(c) of the Energy Act in enabling powers to be conferred on the Administrator to impose charges on fuel suppliers. Subsection (2) creates a new power for the Secretary of State to give written directions to the Administrator about the exercise of his powers conferred by virtue of subsection (1)(a) or (b). The Administrator must comply with any such directions. The power includes power to revoke or vary any directions given. This power may be used for example to direct the Administrator to collect information in a particular form or using a particular methodology to show the carbon savings achieved by renewable transport fuel supplied and certificated under the RTFO scheme.
349. New section 125B(5) replaces the provisions of section 125 of the Energy Act 2004 which set out what the Administrator must do with money that he receives from charges imposed on transport fuel suppliers by an RTF order (although the 2007 order does not impose any such charges). It alters the current requirement that any such charges must be used to meet the Administrator's costs by providing that if the Administrator is the Secretary of State any charges must be paid into the Consolidated Fund.
350. New section 125C creates a new power for the Secretary of State by order to replace an existing Administrator with a new Administrator and to provide for the transfer of functions, staff, property, rights and liabilities from the old to the new Administrator. The new Administrator can be the Secretary of State or an existing statutory body or a body corporate established under this new power.
351. The new power is subject to the negative resolution procedure unless it is used to establish a new body corporate or to modify an Act of Parliament, Act of the Scottish Parliament, Act or Measure of the National Assembly for Wales or an Act of the Northern Ireland Assembly, in which case the affirmative resolution procedure will apply.
352. Paragraph 3 amends section 126 of the Energy Act 2004 which enables an RTF order to make provision about how amounts of transport fuel may count towards discharging obligations imposed by an RTFO scheme. New section 126(5) means that if a future RTF order makes such provision by reference to a document it may provide for references to the document to have effect as references to it as revised or re-issued from time to time. This will enable reference to be made to international standards for carbon and sustainability without the need to amend the order whenever those standards are revised.
353. Paragraph 3 also amends section 126 of the Energy Act 2004 to create a new power for the Secretary of State to give written directions to the Administrator about the exercise of any of the Administrator's functions in connection with counting or determining amounts of transport fuel for the purpose of the RTFO scheme. The Administrator must comply with any such directions. The power includes power to revoke or vary any directions given. This power may be used for example to direct the Administrator to use a particular methodology if a future RTF order requires amounts of transport fuel to be counted or determined by reference to its effects on carbon emissions or sustainable development.
354. Paragraph 4 amends the provisions of the Energy Act 2004 which set out what the Administrator must do with money he receives when administering the RTFO scheme from buy-out payments.
355. Currently, the powers in section 128 of the Energy Act 2004 mean that the Administrator may (if an RTF order so provides, as the 2007 order does) receive buy-out payments from transport fuel suppliers who choose to buy-out their obligation rather than supply the specified amount of renewable transport fuel. By section 128(7) such sums must be paid to transport fuel suppliers under a system of allocation specified in the RTF order (subject to first meeting the costs of the Administrator if the RTF order so provides under the power in section 128(6), which the 2007 order does not).
356. As a result of amendments to section 128 by paragraph 4, where the Administrator is the Secretary of State new section 128(6)(a) will require the buy-out payments to be paid into the Consolidated Fund. But new section 128(6)(b) will allow (but not require) the RTF order to provide for the Secretary of State to make payments to transport fuel suppliers under a system of allocation specified in the order. The RTF order must ensure that the total paid out does not at any time exceed the total of the buy-out payments received up to that time (new section 128(7)).
357. If the Administrator is a person other than the Secretary of State, it will be possible for the RTF order to provide instead that the Administrator must use some or all of the buy-out payments to meet his costs or must pay some or all of the buy-out payments to the Secretary of State (in which case they will be payable by him into the Consolidated Fund) (new section 128(8)). To the extent that the payments are not dealt with in this way, they will have to be paid to transport fuel suppliers under a system of allocation specified in the RTF order (new section 128(9)).
358. Paragraph 5 amends section 129(7) of the Energy Act 2004 which currently provides that civil penalties received by the Administrator under an RTF order must be paid to the Secretary of State for payment into the Consolidated Fund. The amendment makes it clear that, if the Secretary of State is the Administrator, he is to pay those sums into the Consolidated Fund directly.
359. Paragraph 6 inserts into the Energy Act 2004 new sections 131A, 131B and 131C which make provision enabling information to be disclosed by Her Majesty's Revenue and Customs ("HMRC") to the Administrator, as well as prohibiting further disclosure of the information. The information in question is restricted to information held in connection with HMRC's functions under or by virtue of the Hydrocarbon Oil Duties Act 1979. This is to limit the information to that which is relevant to the Administrator's functions.
360. New section 131A permits the information to be disclosed to the Administrator or an authorised person (a person who provides services to or acts on behalf of the Administrator and is authorised by the Administrator to receive the information).
361. New section 131B prohibits the disclosure of the information by the Administrator, an authorised person or any other person who obtains it in the course of providing services to or acting on behalf of the Administrator, except in certain specified cases (for example a disclosure required by a court order). The restrictions on further disclosure only apply to information received under new section 131A that has not also been received by the Administrator or an authorised person by another means.
362. Wrongful disclosure contrary to new section 131B is an offence under new section 131C if the information is about a person who is identified in or identifiable from the disclosure. The offence is triable either summarily or on indictment. Section 131C provides that a person convicted on indictment may be imprisoned for up to 2 years or fined or both, and that on summary conviction a person is liable to imprisonment for up to 12 months or to a fine not exceeding the statutory maximum (currently £5000) or both. It also provides that, in England and Wales, the penalty on summary conviction of an offence committed before section 154(1) of the Criminal Justice Act 2003 comes into force will be 6 months' imprisonment. The same penalty will apply in Northern Ireland. A person charged with an offence under new section 131C has a defence if he can prove that he reasonably believed that the disclosure was lawful or that the information was already lawfully in the public domain.
Clause 75: Report on climate change: Wales
363. This clause requires the Welsh Ministers to lay before the National Assembly for Wales, from time to time, a report on greenhouse gas emissions and the impacts of climate change on Wales.
364. Subsection (1) requires the Welsh Ministers to include in their report their objectives in relation to greenhouse gas emissions and the impacts of climate change in Wales, the action they (and others) have taken to deal with those emissions and impacts and their future priorities for dealing with them.
365. Subsection (2) requires the Welsh Ministers to set out how they intend to exercise their power to issue directions to reporting authorities under clause 65. Subsection (3) provides that this does not affect the Welsh Ministers' general discretion as to how they may exercise their power to issue directions
366. Subsection (4) makes it a requirement that the second and subsequent report under this clause should include an assessment of the progress made towards implementing the objectives in earlier reports.
367. Subsection (5) defines "Wales", for the purpose of this clause, by reference to section 158(1) of the Government of Wales Act 2006 (c.32). This definition includes the sea adjacent to Wales out as far as the seaward boundary of the territorial sea.
368. This clause devolves to the Welsh Ministers the function under section 3 of the Climate Change and Sustainable Energy Act 2006 (c.19) of preparing an energy measures report in relation to Wales. It also widens the obligation to cover certain other measures and provides that the Secretary of State's consent is required in relation to certain elements of a report.
369. Subsection (2) inserts a new section 3A after section 3 of the Climate Change and Sustainable Energy Act 2006 (c.19). New section 3A requires the Welsh Ministers to prepare a "climate change measures report", which is a report containing information for Welsh local authorities in relation to measures which they may take and which would or might have certain effects, including (in contrast to section 3) the effect of addressing the impacts of climate change. Subsection (5) of new section 3A requires the Secretary of State's consent where the report contains information about local authority measures in relation to which the Secretary of State has certain functions, exercisable in relation to Wales (for example, the function of making building regulations).
370. This clause repeals section 2 of the Climate Change and Sustainable Energy Act 2006 (c.19). The reporting requirements under that section are substantially replicated by the reporting requirements in clauses 15 and 35 in Parts 1 and 2 of the Bill.
371. This clause authorises any Minister of the Crown or government department, the Scottish Ministers, the Welsh Ministers and any Northern Ireland department to acquire units representing reductions in emissions of greenhouse gases, removals of greenhouse gases from the atmosphere and units under cap-and-trade trading schemes.
372. This clause therefore enables Her Majesty's Government and the devolved administrations to offset emissions through the purchase of units (often referred to as "carbon credits"). It also allows central government and the devolved administrations to purchase units, by arrangement, for other public bodies which do not have to power to do so of their own accord. Units acquired using this power which meet the requirements of regulations under clause 26 (carbon units and carbon accounting) may be used to reduce the level of the net UK carbon account (see clause 27).
373. Subsection (1) of this clause amends section 105(2) of the Clean Neighbourhoods and Environment Act 2005 (c.16) to enable an increase in the maximum fines on summary conviction that can be provided for under the Pollution Prevention and Control Act 1999 (c.24).
374. This subsection will enable the maximum fines on summary conviction under regulations made under the Pollution Prevention and Control Act 1999 to be brought into line with the equivalent maximum fines under section 33(8) of the Environmental Protection Act 1990 (c.43) in order to ensure consistency in this area of regulation.
375. Subsection (2) amends the Environmental Permitting (England and Wales) Regulations 2007 (S.I. 2007/3538) so that such a change is made to those Regulations immediately on commencement of the clause. This makes the penalties consistent with those which were imposed for offences against the Waste Management Licensing Regulations 1994 (S.I. 1994/1056).
Guidance on reporting
Clause 80: Guidance on reporting
376. This clause makes provision about guidance relating to company reporting on greenhouse gas emissions.
377. Subsection (1) gives the Secretary of State power to issue guidance to companies on the information about their greenhouse gas emissions which they should publicly disclose as part of their annual report. The Secretary of State may also authorise another body to give such guidance.
378. Subsections (2) and (3) gives further detail about the matters which may be contained within the guidance. Amongst other things it makes clear that the guidance may make provision about the form and content of the information to be disclosed and may make different provision for different types of company.
379. Some companies are required under section 417 of the Companies Act 2006 to include a business review within its directors' report. Subsection (4) provides that where a company is required to produce such a business review, it must have regard to any guidance issued under this clause. It also provides that if a company complies with the guidance then, subject to the Secretary of State making provision to that effect, it will be presumed that it has complied with the duty to produce a business review (insofar as the business review requires information on emissions).
380. Subsection (5) makes clear that the Secretary of State or any other person giving guidance may also vary or revoke that guidance.
Clause 81: Territorial scope of provisions relating to greenhouse gas emissions
381. This clause provides that emissions from sources or other matters occurring in, above or below "UK coastal waters" or on the "UK sector of the continental shelf" count as emissions from the UK.
382. Subsection (2) defines "UK coastal waters" as areas on the land side of the seaward limit of the territorial sea adjacent to the UK (i.e. out to 12 nautical miles), and "the UK sector of the continental shelf" by reference to section 1(7) of the Continental Shelf Act 1964 (broadly, out to 200 nautical miles or the half-way point between countries, whichever is closer).
383. Subsection (3) provides that this clause is subject to clause 30, which provides that emissions from international passenger travel or imports or exports of goods are not to be regarded as emissions from UK sources for the purposes of Part 1 of the Bill, unless regulations have been made to bring them in.
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