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Session 2008 - 09
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The Committee consisted of the following Members:

Chairman: John Bercow
Allen, Mr. Graham (Nottingham, North) (Lab)
Bailey, Mr. Adrian (West Bromwich, West) (Lab/Co-op)
Benyon, Mr. Richard (Newbury) (Con)
Byers, Mr. Stephen (North Tyneside) (Lab)
Chapman, Ben (Wirral, South) (Lab)
Farron, Tim (Westmorland and Lonsdale) (LD)
Goodman, Helen (Bishop Auckland) (Lab)
Horwood, Martin (Cheltenham) (LD)
Irranca-Davies, Huw (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
Jack, Mr. Michael (Fylde) (Con)
Kumar, Dr. Ashok (Middlesbrough, South and East Cleveland) (Lab)
Steen, Mr. Anthony (Totnes) (Con)
Watkinson, Angela (Upminster) (Con)
Mick Hillyard, Committee Clerk
† attended the Committee

European Committee A

Tuesday 10 March 2009

[John Bercow in the Chair]

Control of Ozone-Depleting Substances
4.30 pm
The Chairman: Does a member of the European Scrutiny Committee wish to make a brief explanatory statement about the decision to refer the relevant documents to this Committee?
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I welcome you to the Chair, Mr. Bercow. It is, as ever, a pleasure to serve under your chairmanship.
The debate is on ozone-depleting substances in relation to EU document No. 12832/08 and addenda 1 to 3. It might help if I make a few explanatory comments to start with and explain why the European Scrutiny Committee decided that this matter should be recommended for debate in this Committee.
Because of their health and environmental risks, the production and use of substances that deplete the ozone layer has since 1987 been subject to international control under the Montreal protocol. The Community has subsequently enacted legislation to enable it and member states to fulfil, and in some cases to exceed, their various obligations as parties to that protocol.
The first part of the document is a communication in which the Commission traces the good progress made so far in reducing ozone-depleting emissions. It goes on to identify three areas where concern remains: ozone-depleting substances that are banked in products and equipment; emissions arising from exemptions currently permitted; and the potential risk from new substances. It also suggests how those problems might be tackled. The second part of the document is a draft regulation designed to give effect to certain of those measures. In doing so, it would give the Commission enhanced legislative powers to identify areas where further action is needed to reduce emissions from banked substances and to specify new substances that should be covered by the proposed measures.
Initially, the Government expressed concern about the new powers, particularly if they were to be used to impose expensive measures that, without any adequate cost-benefit analysis having been provided, could result in disproportionate additional cost. They also wanted to examine other aspects of the proposal to satisfy themselves that those would deliver the promised simplification. They have since confirmed that major cost-benefit issues would arise, particularly in tackling ozone-depleting substances in demolition waste.
In view of that, the European Scrutiny Committee thought that the Government’s preferred approach—to press for the regulation to include an explicit duty on the Commission to carry out the analysis after it is adopted but before bringing forward any new obligations as regards recovery and destruction—was inadequate. In particular, it considered that it would be difficult to be confident that the Commission could be held to that once the regulation had been adopted. It believed that the issue needed to be resolved satisfactorily before that stage was reached and that it was thus worthy of debate in this Committee.
The Chairman: I am grateful to the hon. Gentleman for his explanatory statement. I call the Minister to make an opening statement.
Mr. Graham Allen (Nottingham, North) (Lab): On a point of order, Mr. Bercow. May I seek your guidance? When should I ask questions about whether it would be appropriate for the relevant Select Committee of this House to examine this sort of measure? Should I address that question to my hon. Friend the Member for West Bromwich, West or to my hon. Friend the Minister? Many of us here are very interested in the debate, but are without much expertise, whereas the Select Committee has a large number of colleagues who do have expertise and will have something that is perhaps even more sensible to say than we can say this afternoon.
The Chairman: I am grateful to the hon. Gentleman for his point of order. My initial response is that I do not think it would be best to do so either to the hon. Member for West Bromwich, West or to the Minister. My sense is that the best course is for the hon. Member for Nottingham, North to approach the relevant Select Committee directly because, of course, the Select Committee determines its own programme of work and inquiry. He is an exceptionally assiduous, and some might say ingenious, Member of the House and therefore I feel sure that it will not be difficult for him to direct his gaze to the relevant Select Committee Chair and take the matter forward in that way.
Mr. Michael Jack (Fylde) (Con): On a point of order, Mr. Bercow. I am delighted to be under your chairmanship. I wonder if, for the sake of clarification, you might be able to help me. The documents before the Committee include one dated 11 September 2008, described as “an inter-institutional file”. It details the proposal before the Committee and says it is “recast”. It contains a large number of printed crossings-out and I am not clear as to their status. Who has crossed out these portions and what influence might it have on our proceedings?
The Chairman: The answer is that these are perfectly legitimate matters for the right hon. Gentleman to raise and the opportunity for him to do so will present itself in the question and answer session that will follow the statement from the Minister. As he knows, the question and answer session is the chance for interrogation. I think it fair to say that the extremely important matters that he raises lend themselves to debate. I know he would not seek to precipitate the debate that is to follow. We do not want to be delayed any longer than necessary in hearing the Minister’s opening statement.
4.38 pm
Mr. Allen: On that question of partnership, does the Minister feel that an effective partnership in the House would be between the Government and the relevant Select Committee? Does he feel it appropriate to find a mechanism by which he can get the expert opinion of colleagues in this House on the very subject that is relevant?
The Chairman: Order. Before the Minister replies, can I say that I was happy on this occasion to let the hon. Gentleman intervene, though for future reference the general form is that the opening statement is supposed to be analogous to an opening statement on the Floor of the House and therefore not open to intervention. However, the hon. Member for Nottingham, North, with his usual perspicacity, has put his point clearly on the record and if the Minister wishes briefly to allude to it in his statement he is of course free to do so.
Huw Irranca-Davies: Thank you, Mr. Bercow, for your leniency to myself and my hon. Friend the Member for Nottingham, North. As a Minister, I am always willing to appear before the relevant Select Committee and to take up any invitations, not least when there is an opportunity to expand on what is a success story. Governments have acted decisively in respect of co-operation and plan to go further. I would therefore welcome such opportunities, wherever they come from.
The 1987 Montreal protocol on substances that deplete the ozone layer is often rightly cited as one of the most successful examples of agreed global multilateral action to deal with a threat to our planet. The ozone layer is about 10 to 50 km from the earth and protects all living things from harmful radiation from the sun. It was the British Antarctic team that first presented the scientific evidence of severe thinning in the ozone layer over the Antarctic in 1985. That led to concerted global action to deal with the problem of what was called the ozone hole.
Chlorofluorocarbons are ozone-depleting substances that were found to cause the most damage to the ozone layer. They were widely used in aerosols with propellant gases and as refridgerants in domestic and commercial refridgeration equipment. The Montreal protocol and subsequent amendments to it have led to successive cuts in the production and consumption of ozone-depleting substances. Industry played its part in responding to the ban on chemicals such as CFCs by developing alternative chemicals called hydrochlorofluorocarbons. Those cause less damage to the ozone layer and can be used in mass-produced products such as fridges and insulating foam in buildings.
It is worth pointing out the success that there has been. Within 20 years, the Montreal protocol succeeded in phasing out 95 per cent. of ozone-depleting substances in developed countries and 50 to 75 per cent. in developing countries. That is quite some achievement and flags the way for multinational and multilateral co-operation. Thanks to the reduction in the production of ozone-depleting substances, the ozone layer has not become thinner since 1998 over most of the world and it is recovering. A return to pre-1980 levels is expected by 2050 over the Arctic and between 2060 and 2075 over the Antarctic. In 2007, parties to the Montreal protocol agreed to an accelerated phase-out of HCFCs, which not just deplete the ozone, but have a high global warming potential. Therefore, cuts in their use can deliver substantial climate benefits.
EC regulation No. 2037/2000 has been successful in phasing out 99.5 per cent. of the ozone-depleting substances produced in the EC. This is one area in which the European Union can say that it is ahead of the curve. The proposed recast ozone regulation will update EC ozone legislation in line with the latest international agreement that consumption of HCFCs will end in 2019 rather than 2030.
Much of the review of EC legislation focused on possible measures to stop the considerable quantities of ozone-depleting substances in existing products and equipment—so-called banks—escaping into the stratosphere. The Government support the objectives of the review, which are to simplify the provisions and address the remaining future challenges, some of which I have referred to.
Our main concern relates to one impact of the Commission’s proposals. There are possible new obligations on the recovery and destruction of ozone-depleting substances, such as insulating foams in buildings. Such foams form the most significant bank of ozone-depleting substances in the EU and the rest of the developed world. Those banks could be costly to recover and to destroy, but the benefits could be significant.
Our explanatory memorandums to the Committee explain that any specific new recovery obligations proposed by the Commission will be voted on by member state representatives on a qualified majority basis in an ozone regulatory committee after the recast regulation has been agreed and is in force. We have been pressing for the regulation to contain an explicit obligation on the Commission to produce a comprehensive analysis of costs and benefits, taking account of the different circumstances of member states after the regulation has been agreed but before any Commission proposal is decided to add items to the annexe for mandatory recovery and destruction of ozone-depleting substances.
The Government believe that the new regulation should have a single legal base—the environmental legal base of article 175(1), as in the current regulation—rather than the proposed joint legal base of articles 133 on trade and 175(1), because the regulation’s predominant purpose is to protect the environment. That is clear. We strongly believe that the regulation should have a single legal base.
We have concerns about the Commission’s proposal to remove the inward processing procedure for HCFCs. Under that procedure, substances are imported and repackaged, for example into smaller cylinders, then exported. We are similarly concerned about the proposal’s failure to exempt the placing of HCFCs on the market for repackaging and export. We believe that both proposals would have an unjustified economic impact on EU-based companies, including—I declare an interest—one company based in Wales. They would also produce no environmental benefits.
To guard against possible unforeseen consequences of the new legislation, UK stakeholders were invited to submit initial comments to the Department for Business, Enterprise and Regulatory Reform and the Department for Environment, Food and Rural Affairs on the Commission’s proposal. Consultations are continuing as negotiations progress. DEFRA and BERR have also held meetings with representatives of the demolition industry, insulation panel manufacturers and demanufacturers of equipment to scope out the possible impacts of mandatory recovery or destruction of ozone-depleting substances from construction and demolition waste. Negotiations in Europe on all those points are progressing well. I am confident that the concerns that I have outlined will be addressed in the final regulation.
The Montreal protocol has been a great success. The Commission communication and its proposed recast ozone regulation are designed to focus on remaining environmental policy challenges to ensure long-term protection of the ozone layer. We support the overall thrust of the Commission’s proposals so long as the final text addresses, as we are confident it will, the concerns that I outlined and that are further described in the explanatory memorandums submitted. With those comments, I shall be pleased to respond to the Committee’s further questions.
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Prepared 11 March 2009