REACH
This complex and controversial piece of legislation is intended to set up a system of registration, evaluation and authorisation of chemicals. EEF has been involved in this debate as part of the UNICE and Eurofer (the pan-European Steel Employers Organisation) REACH working groups. Much of our direct lobbying has been on behalf of our steel members where we have been successful in getting the European Parliament to accept a number of specific amendments. The Council of Ministers reached agreement on the dossier at the end of 2005 and a formal Common Position is likely to be published in May or June; the dossier will then be subject to a 2nd Reading in the Parliament later in 2006.
EU Emissons Trading Scheme (ETS)
The EU Emissions Trading Scheme (EU ETS) started in January 2005. Under the scheme named sectors and installations greater than 20MW installed capacity (for the purposes of generating energy) are allocated a quantity of CO2 (in tonnes). This allocation forms part of a National Allocation Plan (NAP) which member states have to submit to the European Commission. If over the first phase of the scheme (2005-2007), a company exceeds its allocation it is required to purchase allowances from the market to make up the shortfall or face a fine of €40 per tonne.
The second phase of the Scheme runs from 2008-2012. Preparation for phase 2 (2008-2012) is already underway and a draft NAP has to be with the Commission by the end of June 2006, with the final NAP submitted by December 2006. The UK Government published its draft NAP in March 2006. Amongst other things the draft proposed a reduction in the overall carbon allocation. The cut is intended to be met entirely by electricity generation sector, on the basis that it is less exposed to international competition and can pass through costs. However precisely because of this, the cut will be felt by energy users as a price increase. At the same time we have specific concerns over possible proposals to extend the scope of the scheme to take in more companies and sectors and the likelihood that in future some of the carbon allocation will be subject to auctioning.
On a more macro level we were concerned during the first phase that in contrast to the UK, some member states submitted extremely generous National Allocation Plans, i.e. plans that did not require industry to make major cuts in carbon usage and thus put them at a competitive advantage. If they are now to meet their Kyoto targets many member states will have to submit extremely tough NAPs and this raises the question of whether they will put in place measures to mitigate the impact for firms affected, particularly those facing financial difficulties. The UK government is unlikely to follow such an approach, creating further competitive issues.
Waste
In 2005 EEF was asked by the DTI to submit ideas of how European law could be simplified, as part of the EU’s recent commitment to the better regulation. Amongst the suggestions we put forward was the proposal that the Commission should look at waste legislation and in particular the definition of what constitutes waste. Partly in response to this consultation the Commission has recently published a new broad Thematic Strategy on Waste and as part of this has proposed to revise the 1975 Waste Framework Directive. The 1st Reading of the revised Directive will begin in May and is expected to be completed by November 2006. Over the coming weeks EEF will be meeting key MEPs in this debate to feed in our views on this proposal.
WEEE
The WEEE Directive makes producers of Electrical and Electronic Equipment (EEE) responsible for the recovery and recycling of this equipment at the end of its life.
Strictly speaking this is not now a European issue as it has passed through the EU’s legislative process and is in the process of being transposed into UK law; however, implementation in the UK has proved somewhat problematic. There was a first announcement of delay in March 2005 stating that producer registration would begin in January 2005 and producer responsibility in July 2005. This has since been superseded by a further announcement of a delay to the implementation of WEEE on 15th December 2005. This stated that implementation plans for WEEE would be ‘immediately reviewed’. EEF supported this delay to the implementation of the Directive until the legislation can be transposed and implemented properly
A new consultation document on implementation methods will be published in the spring. Significant uncertainty remains for industry as to how this legislation will impact upon them. Financial costs as well as organisational practicalities are all unknown until it is decided how this legislation is to be implemented. At the moment, EEF is fully involved in the stakeholder groups established by DTI in advance of the consultation process. This remains an issue at European-level as there have been suggestions that continuing problems with implementation of the legislation by member states may result in the Commission bringing forward new legislation to iron out some of the problems.