3 Industrial emissions
| (a)
(29313)
5223/08
COM(07) 843
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Commission Communication: Towards an improved policy on industrial emissions
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| (b)
(29348)
5088/08
+ ADDs 1-2
COM(07) 844
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Draft Directive on industrial emissions (integrated pollution prevention and control) (Recast)
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| Legal base | (a) —
(b) Article 175EC; co-decision; QMV
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| Department | Environment, Food and Rural Affairs
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| Basis of consideration | SEM of 2 May 2009 and Minister's letter of 5 June 2009
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| Previous Committee Report | HC 16-x (2007-08), chapter 1 (30 January 2008)
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| To be discussed in Council | 25 June 2009
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared (but see para 3.13-15 below)
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Background
3.1 According to the Commission, the largest industrial installations
account for a considerable share of total emissions of key atmospheric
pollutants, and have other important environmental impacts. Emissions
from such installations have therefore been subject to Community-wide
legislation for some time. In particular, Directive 96//61/EC[6]
concerning integrated pollution, prevention and control (IPPC)
governs the issuing of permits to large installations with a thermal
input greater than 50 MW, covering all environmental impacts,
and linked to the application in the main industrial sectors[7]
of best available techniques[8]
(BAT). These were set out in a series of BAT reference documents
(BREFs), which are non-binding, but in practice Member States
have only limited discretion to allow less stringent permit conditions.
This measure is complemented by so-called sectoral Directives,
which lay down specific provisions, including minimum emission
limit values for certain industrial activities (notably large
combustion plants, waste incineration, activities using organic
solvents, and titanium dioxide production). These need not be
as strict as those in the IPPC Directive, but are frequently applied
instead of BAT, especially in the case of large combustion plants.
3.2 However, the Commission also says that, notwithstanding
these measures, all the installations involved need to be better
geared to the implementation of BAT. It therefore put forward
in December 2007 two documents. The Communication at document
(a) noted that not all Member States had fully implemented the
Directive, and that, there were a number of areas of concern.
The Commission therefore suggested that the seven existing pieces
of legislation[9] in this
area should be re-cast into a single measure, with the concept
of BAT being improved and clarified, together with a tightening
of current minimum emission limit values in some sectors, and
the introduction of minimum provisions relating to inspections,
permit conditions, and the reporting of compliance. It also said
that the scope of the IPPC Directive should be extended, and its
application to certain sectors clarified, and that the comitology
procedure should be used to amend non-essential elements of the
re-cast Directive.
3.3 The Communication also provided an estimate of
the likely impact of the measures proposed. It suggested that
there would be net environmental benefits of €7-28 billion
a year for the large combustion sector alone, which it says would
greatly outweigh (by a factor of between 3 and 14) the economic
impacts, with further positive, but less quantifiable, impacts
in other areas (such as on soil, water and waste), and a likely
reduction in administrative burdens by between €105-255 million
a year. It also said that no significant long term impact on competitiveness,
detrimental social impacts or negative effects on economic growth
have been identified as a result of a higher uptake of BAT, and
that this would instead help to create a more level playing field
and reduce distortions of competition within the Community, as
well as helping to promote the development and deployment of innovative
technology.
3.4 This Communication was accompanied by a draft
Directive (document (b)) intended to give legislative effect to
its recommendations. This would:
- extend the scope of the IPPC
Directive to include additional activities, such as combustion
installations between 20 and 50MW, the preservation of wood and
wood products, and the production of wood panels, and it would
lower the threshold at which the measure would apply to intensive
poultry installations;
- require that BREFs should be the basis on which
conditions are set for permits issued, and that this should be
reflected in permitted the emission limits;
- specify that any national derogations regarding
emission limit values should be based on well defined and publicly
justified criteria, and not exceed the emission limit values specified
in the Directive;
- introduce a new requirement for the periodic
monitoring of adjacent soil and groundwater to protect them from
contamination by dangerous substances.
3.5 It would also require operators to report regularly
on compliance with permit conditions, and measures to be taken
in a case of non-compliance; require permit conditions to be reconsidered
after a new or updated BREF is adopted; and require Member States
to provide for a system of environmental inspections. In addition,
it would also set more stringent emission limit values, aligned
with BAT, for certain categories of combustion plants and pollutants,
and for installations producing titanium dioxide: and, in order
to reduce unnecessary administrative costs, it would enable competent
authorities to introduce derogations to the current minimum monitoring
requirements for certain emissions generated by waste incineration
and co-incineration plants.
3.6 As we noted in our Report of 30 January 2009,
the Government supports in principle the aim of strengthening
and clarifying the use of BAT, and says that this concept has
consistently been promoted and supported by the UK, its key feature
being the need to be both technically and economically viable
in the sector concerned. As regards individual aspects of the
proposal, we noted:
- that, although the information
exchanges used to establish BAT-associated emission levels are
not of a sufficient uniformly high standard to justify their being
imposed in all but the most unusual circumstances, the UK may
be able to support the proposal, subject to securing a commitment
that the quality of BREFs will be improved, and that the circumstances
in which they would not be applied would be clarified sufficiently;
- that, although the UK has pointed out that, if
the IPPC Directive were to be properly applied, there would be
no need to strengthen existing minimum requirements for large
combustion plants, the co-incineration of waste and titanium dioxide
production, it may reluctantly have to accept the proposal, given
the shortcomings in the way the Directive has been applied by
Member States;
- that the minimum requirements for large combustion
plants could have "troubling" consequences for the future
development of replacement power plants, and is therefore probably
the most controversial aspect of the whole proposal, which will
need to be considered in depth in the context of energy policy,
climate change and air quality objectives;
- that the Government intended to study in detail
the justification for extending the IPPC Directive to other activities,
and to carry out an UK impact assessment before reaching a final
view;
- that it wished to adopt a similar approach to
any amendment of the threshold for including intensive poultry
installations, and to the proposal regarding soil monitoring and
remediation;
- that it was minded to support the proposals for
inspection, reporting on compliance, and reviewing of permits,
whilst seeking the development of clear Community guidance to
ensure that the burden on regulators and operators would be proportionate.
Subject to examination of the detail, the Government
also supported the proposals to simplify the issue of permits
and reduce reporting by operators; the introduction of Action
Programmes to support Member States in reducing unnecessary administrative
costs and streamlining their reporting; and the merging of seven
current Directives into a single measure.
3.7 Whilst noting the conclusions of the Community-wide
impact assessment carried out by the Commission, the Government
said that it would be carrying out an initial assessment for the
UK, which it aimed to submit in May 2008, but that it did not
expect the proposals to reach the Council before December 2008.
In view of this, we said that we would reserve judgement until
we had seen that assessment, but that, in the meantime, we were
drawing the two documents to the attention of the House as being
potentially important, if only for the scale of the activities
affected, and the health, environmental and cost implications
of the changes being proposed.
Supplementary Explanatory Memorandum of 2 May
2009
3.8 We received recently from the Minister for Sustainable
Development, Climate Change Adaptation and Air Quality at the
Department for Environment, Food and Rural Affairs (Lord Hunt)
a supplementary Explanatory Memorandum of 2 May 2009. This noted
that the original Explanatory Memorandum
of 17 January 2008 had identified the requirements for large combustion
plants as probably the most controversial element in the proposal
because of the consequences for the development over the next
decade of replacement power plants consistent with carbon reduction
objectives, and said that the UK had been on the forefront of
Member States calling for greater flexibilities for existing plants
up to the early 2020s. He added that significant progress had
been made in the negotiations, and that the Government
would continue to press for further amendments. He also noted
that, insofar as the proposal
would impose BAT-associated emission levels in all but the most
unusual circumstances, this had caused difficulty for some Member
States, but that the UK had supported this, provided the circumstances
in which BAT levels would not be applied were clear.
3.9 These points apart, the Minister reported that
he expected that any eventual agreement in the Council would maintain
the threshold for the inclusion of combustion plants at 50MWth
(compared with the 20 MWth proposed by the Commission), and that
the UK was continuing to argue that the threshold for the inclusion
of intensive poultry installations should be kept at the level
in the current IPPC Directive.
3.10 We were, however, surprised and concerned to
learn that the UK Impact Assessments of various components of
the proposal — covering (i) combustion plants, (ii) intensive
livestock installations, and (iii) a range of other activities[10]
— had been published on his Department's website as long
ago as May 2008, but were only now being drawn to our attention,
nearly a year later. Our concerns were all the greater, since
the Minister had also gone on to say, not only that the Presidency
would be seeking to achieve political agreement at the Environment
Council on 25 June, and that, in view of the considerable progress
made at working level, the prospects of this were good, but that
(subject to its outstanding concerns being addressed), the Government
would wish to encourage this. Furthermore, the Assessments which
had been prepared were extremely detailed, and had, in certain
respects, been subject to subsequent revision. We therefore made
clear to the Minister our displeasure over the way in which this
information had been provided, and the need for us to have a clear
and up-to date statement of the costs and benefits arising from
the proposals, if we were consider — let alone clear —
the document.
Minister's letter of 5 June 2009
3.11 We have now received from the Minister a letter
of 5 June 2009, apologising for his Department's oversight in
not advising us earlier of the publication of its impact assessments
in May 2008, and enclosing a note which provides a helpful summary
of the current position. This indicates that, for a number of
areas (non-ferrous metal foundries, biological processing for
chemical production, the production of chemicals for use in fuels
or lubricants, and wood-based panel production), there would be
no additional costs because these are in practice already subject
to the IPPC Directive in the UK; that the existing measures in
place within the UK under industry codes of practice for the preservation
of wood and wood products are comparable to those likely to be
required were the proposal
to be adopted, with no additional costs (or, for that matter,
benefits) arising; that, likewise, the inclusion of off-site treatment
of waste water from an installation where an IPPC activity is
carried out would in effect regularise UK practice; and that the
impact of the proposal to extend IPPC to food products of mixed
animal and vegetable origin is likely to be minimal.
3.12 As regards those elements in the proposal where
costs would arise, the note says:
- that the initial Impact Assessment
put the annualised cost of the original more stringent requirements
for large combustion plants at between £170 million
and £331 million and the corresponding benefits as being
in the range £119 million to £171 million:[11]
however, although the Government
had concluded that outright opposition to the proposal
was not an option — not least because the Thematic Strategy
on Air Pollution calls for a significant reduction in emission
levels — it had been instrumental in the Council
in pressing for the restoration of certain existing flexibilities
for plants in operation prior to November 2003, and that it currently
seemed likely that this would result in a reduction in annual
costs to £214 million and annualised benefits between £127
million and £178 million (though the UK was continuing to
press for further flexibilities);
- that, since the Commission's original proposal
to extend the Directive to smaller combustion plants between
20 and 50 MWth had given no firm indication of the emission limits
values which would apply in such an event, the Government had
drawn up assessments according to three scenarios, with annual
costs ranging from £16.4-16.8 million for the least stringent
to £66.8-67.2 million for the most, and corresponding benefits
ranging from £7.8-11.2 million to £16.6-23.9 million:
however, as a result of pressure from the UK and others, it now
seemed likely that the Council will restore the status quo,
coupled with a new provision requiring the Commission to review
the issue (and, if necessary, to make a separate proposal by 2013);
- that the inclusion within IPPC of intensive
poultry rearing installations falling below the current threshold
would have resulted in annualised costs of £3.0-3.2 million,
and benefits of £1.6-2.3 million, but that, following opposition
from the UK and several other Member States, the Council is again
likely to restore the status quo, whilst requiring the
Commission to review the application of IPPC to this sector and
make any further proposals by 2013: a similar approach also seems
likely in relation to a proposal to require BAT to be applied
to the land spreading of manure from establishments intensively
rearing pigs and poultry (which would otherwise have given rise
to annualised costs of £2.3-7.6 million, and benefits of
£5.5-17.9 million);
- that, as drafted, the proposal would extend of
IPPC measures which currently apply to the disposal of non-hazardous
waste by physico-chemical or biological treatment to include
the recovery of such waste by these means: although this
would give rise to annual costs of between £14.6 million
and £532 million, it had not been possible to quantify or
monetarise the potential benefits, but the scope of the proposal
had now been narrowed considerably, reducing the annual cost to
between £1.8 and 9.8 million (though here too the UK was
continuing to seek further amendments which would reduce these
numbers still further).
Thus, assuming the Council
proceeds in the way now expected, the overall cost of the proposal
would be reduced from some £944 million to about £224
million, of which some £214 million would relate to the requirements
for large combustion plants (which would in turn lead to annual
benefits of around £178 million).
Conclusion
3.13 As we observed in our Report of 30 January
2008, this is evidently an extremely complex proposal, dealing
with a range of activities with significant health, environmental
and cost implications, and which seeks to cover in a single instrument
a number of existing measures. It has thus proved difficult for
us to obtain a clear view of its implications, particularly in
view of the Government's failure until very recently to draw to
our attention the Impact Assessments it carried out over a year
ago.
3.14 Having said that, we note that many of the
detailed aspects of the proposal will not give rise to increased
costs in the UK, and that, as a result of the discussions which
have taken place in Brussels, the Government is hopeful that,
in certain of those areas which might have done so, notably smaller
combustion plants and intensive livestock rearing, the Council
will agree to amendments which will in effect maintain the current
position for the time being. In that event, by far the most significant
costs remaining would be in relation to large combustion plants,
where the Government currently estimates that the original figure
of up to £331 million a year would be reduced to some £214
million, but would be accompanied by annual benefits of some £178
million. (We also note that the methodology used by the Commission
to estimate the benefits arising from the proposal produces figures
between 3 and 10 times those calculated by the UK, and hence leads
it to conclude that there would be a net benefit, whereas the
UK figures suggest the opposite.)
3.15 Given that the Council has yet to confirm
the changes which the Government foresees on small combustion
plants and intensive livestock rearing, and that the Government
is still pressing for further flexibilities on large combustion
plants and on the treatment of non-hazardous waste, we do not
feel able at this stage to clear the document. However, we recognise
that the Government may well be anxious to sign up to a political
agreement at the Environment Council on 25 June, in order to consolidate
the gains it has secured in the negotiations to date (or indeed
any further improvements it manages to secure in the two areas
referred to above). Consequently, if such a deal were to be on
offer, we would be willing in this instance to exercise our discretion
under paragraph 3(b) of the Scrutiny reservation to enable the
UK to agree to it, notwithstanding the absence of scrutiny clearance.
This is of course on the understanding that, if it does so, we
will expect to consider the matter further on the basis of a report
from Minister on the outcome.
6 OJ No. L 257, 10.10.96, p.26. Back
7
Energy, metal production and processing, minerals and chemical
production, and waste management, plus a range of "other"
activities (such as slaughterhouses and installations for the
intensive rearing of pigs and poultry). Back
8
These are established techniques which are the most effective
in achieving a high level of environmental protection under economically
and technically viable conditions, taking into account the costs
and benefits. Back
9
The IPPC Directive, Directive 1999/13/EC on solvents emissions,
Directive 2000/76/EC on waste incineration, Directive 2001/80/EC
on large combustion plants, and Directives 78/176/EEC, 82/883/EEC
and 92/112/EEC relating to the titanium dioxide industry. Back
10
These activities are: non-ferrous metal foundries; biological
processing for chemical production; production of chemicals for
use as fuels or lubricants; specified treatments of non-hazardous
waste; wood-based panel production; mixed animal and food production;
preservation of wood and wood products; and off-site treatment
of waste water. Back
11
According to the note provided by the Minister, the methodology
used by the Commission in its Impact Assessment indicated UK benefits
in the range £402million-£1121 million. Back
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