Any proposals to make company reporting of greenhouse gas emissions compulsory must be considered as part of a wider review of climate change

Responding to today’s publication of DEFRA’s review of evidence on Greenhouse Gas Reporting, EEF believes reporting has an important role to play as part of management best practice.  We also believe that it sets benchmarks by which companies can measure their own inefficiencies and distinguish themselves from their peers in order to win business.

However, EEF believes that any proposals to make greenhouse gas reporting mandatory risks adding additional burdens on companies with little benefit in terms of meeting climate change goals unless it is done in tandem with simplification of current policy.

Commenting ahead of the review’s publication, EEF Head of Climate & Environment Policy, Gareth Stace, said: “Measuring and reporting emissions is an important part of best practice and is an enabler rather than a driver of improving the environmental performance of manufacturers.

“Many already do this and making such practice mandatory risks adding yet another bureaucratic burden with little or no benefit in reducing emissions if implemented in addition to existing policy mechanisms.

“However, if government goes down the mandatory route it should do so only as part of a wider review of climate change policy which delivers genuine simplification. Otherwise it risks being viewed as yet another layer of bureaucracy.

“It must also ensure that mandatory reporting is not overly prescriptive so that companies of all sizes and structures can set out clearly the steps they are taking to meet climate change goals.”

Do you perceive a role for mandatory reporting?  What would be the costs and benefits of such a requirement to your business? Your views on the contribution that reporting can/does have on GHG emissions reductions would be most welcome. 

Recast proposals for the Waste Electrical and Electronic Equipment (WEEE) Directive ran out of steam under the current Belgian Presidency.  However, it is likely that efforts to reach agreement on the 200 amendments put forward during ‘first reading’ will resume in the New Year under Hungary’s Presidency.

WEEE created a lot of fuss and uncertainty when it was introduced in 2003.  So much fuss in fact that the UK was late in transposing the directive into national law and faced the embarrassment of infraction proceedings.  A significant proportion of our membership was affected by the Directive, and continues to be frustrated by it, so it will be a major environmental campaign issue for EEF in 2011. 

The recast Directive proposes to increase the 4kg WEEE collection target to a target on each member state based on the percentage of WEEE it puts on the market.  Other issues of potential concern include increased treatment and reprocessing targets, increased producer responsibilities, and an extension of the scope of WEEE.

It already looks as though the scope of WEEE is set to change.  The Commission has proposed that the scope of the WEEE Directive should now be found in Annex I of the recast RoHS Directive and cross referenced in Article 2 of the recast WEEE Directive. The Recast RoHS Directive, which should be approved later this week, contains a new ‘open’ category - Essentially, this new category includes all EEE except that which is not covered by an exemption. 

New proposals for collection range from 65%-85%.  Either target would be ambitious for a country like the UK who currently collects only around 30% of WEEE.  The proposal to increase the level of WEEE recovered is not contested, it would have a significant impact in diverting WEEE from substandard treatment facilities and reduce illegal exports.  Our concern is whether such ambitious targets can be achieved within in the proposed timeframe (2016), what method for calculating WEEE would be used, and what impact this may have on manufactures.

Similarly we are keen to influence the debate on increased producer responsibilities.  One of the proposals centre stage in the debate is that producers fully finance the recovery of WEEE.  It is argued that in many countries (including the UK) producers only partially finance recovery.  If this proposal succeeds it would require EEE producers to finance the recovery of WEEE from the consumer (e.g. kerbside collection) rather than, as is now the case, from municipal waste sites.

One issue which is causing major divisions between the European Parliament and Member States is the proposal which would make national registers of EEE producers inter-operational so that producers need only register and report in one Member State for all their activities in the EU.

This proposal is supported by Parliament because it would reduce the regulatory burden on businesses to the sum of €60 million.  However, the counter-argument from Member States is that such a proposal could put at risk the ability for national enforcement authorities to effectively police WEEE as they would have limited ability to influence cross border activity.  There is also concern that compliance revenues may not be fairly distributed.

There is much to be discussed and debated on WEEE and the direction of travel is not yet clear.  The issue is a key issue to manufactures and so member dialogue is a critical component of our representational activities.  If you would like to engage on this issue then please do contact me.

Ahead of a HM Treasury consultation on carbon price support, that is anticipated in the coming weeks, EEF has set out its position. 

The expected consultation will set out how government intends to reform the Climate Change Levy and possibly introduce a carbon price support mechanism that sits on top of the EU Emissions Trading Scheme cost of carbon, in order to provide a long term price signal to low carbon investors. This mechanism will affect all purchasers of electricity, through the pass through of costs by the generators subject to the mechanism.

Media release – 19 November 2010:

Ahead of a series of major announcements expected on carbon pricing and energy market reform, manufacturers have challenged the government to act in the best interests of both consumers and investors by consolidating the growing tangle of schemes that put a price on carbon emissions.  

Manufacturers were dismayed last month when the government turned the CRC Efficiency Scheme into a £1 billion tax without any warning or consultation of affected parties. In an instant the policy moved from a being a revenue neutral scheme that rewarded investments in energy efficiency to become yet another tax on energy.  

Rationalising the confusing tangle of policies that set different carbon prices for different parts of the economy is essential. Not only will it give would-be investors in the low-carbon economy greater clarity; it will also go some way to helping restore the trust of the thousands of companies on the sharp end of the CRC decision.

There is ample scope to consolidate overlapping schemes like the CRC, the Climate Change Levy and the planned Carbon Price Support Mechanism into a more coherent and effective climate policy.

Commenting, EEF’s Head of Climate and Environment, Gareth Stace, said:

“We are fast reaching a tipping point. The government has a choice to make between creating further confusion or opting for consolidation that will unleash the potential of the low-carbon economy as well as easing the burden on business.

“If we keep adding to the hotchpotch of existing schemes, we will only muddy the waters for investors and make life unnecessarily difficult for the companies shouldering the burden of climate policy.

“The smart option is to take a more strategic approach based creating a transparent, consistent and predictable carbon price. Consolidation is a win-win approach to climate policy – it will encourage more investment in low-carbon technologies and reduce the cost for compliance for hard-pressed businesses.” 

EEF welcomes the government consultation on changing certain aspects of the CRC Energy Efficiency Scheme, as a first step in unravelling the complex, confusing and costly, broader climate change policy landscape.

Commenting, Gareth Stace, Head of Climate & Environment said “this extended window in the run up to the second phase will allow government to make more strategic changes to the wider climate change policy landscape, rather than tinkering around the edges in a piecemeal fashion. If government doesn’t address the issue from a more macro level, then we are in danger of increasing complexity, not reducing it, both for CRC and other climate change policy measures.

“Government now has the chance to get it right and act upon its rhetoric of certainty, simplicity and transparency in order to accelerate the move to a low carbon economy, by sending the right signals to manufacturers and to the market. To this end, government should look to the forthcoming consultation for reform of the Climate Change Levy as inestimably linked to any changes made to CRC.

“Manufacturers believe that government must view any new climate change measures and taxes in the totality of the many costs pressures on business and must not be seen in isolation.”

EEF previously expressed concern that allowance revenues from the CRC Energy Efficiency Scheme, projected to be up to £1 billion a year, will be used to support the public finances rather than recycled to CRC participants. We said in the strongest terms that it sent a worrying signal about how the government intends to engage with the private sector going forward.

EEF welcomes the government decision on the dropping the requirement for organisations who are not required to register as participants to make information disclosures. Saying, “This is a logical step towards simplification. Companies have wasted valuable time and thousands of pounds, just proving to the Environment Agency that they are not caught by CRC. This was bureaucracy gone mad.

“Overall, this consultation should be seen as the start of CRC simplification, not the end.”

Back in the summer, Lord Marland, Parliamentary Under Secretary of State at DECC, wrote to stakeholders asking for suggestions as to how the burdens imposed by policies and regulations associated with energy and climate change could be amended, reduced or removed. EEF warmly welcomed this refreshing engagement from the new coalition government, seeing it as the new age in how government intended to work with us going forward.

Fortunately, EEF had recently published our vision for UK climate change policy and therefore we were able to set out our views in full. This week, Lord Marland has published his response to this consultation (see responses below).

So was it worth the wait? On the whole, I don’t think so, however the response should not be seen in isolation. I believe that many of the views that stakeholders sent into DECC, will have been viewed with interest by more than just the Marland consultation team and therefore will be feeding into the general government policy process.

The government response didn’t contain much beyond summarising the views DECC received from the 90 organisations that bothered to share policy views. I would have liked to see something bolder, but could DECC have achieved this through this mechanism, as much of what is wrong about UK climate change policy is shortly to be consulted upon through various separate consultations from both DECC and HM Treasury.

Of course I am being too hard on this government response. Looking at it from another angle, this sort of response could be just what we need. The paper looks at all DECC policy in the round, rather than in silo.

Is this a missed opportunity, where DECC could have used this project to look at the policy burden across the department. Then recommended sweeping strategic changes in order to achieve the goal of reducing UK greenhouse gas emissions at least cost to the economy in a certain, simplistic and transparent way.

I would be interested to hear your views on this government response, am I being to flippant on a Friday afternoon here?

Reducing Red Tape letter.pdf (81.86 kb)

Summary of responses.pdf (76.33 kb)

The European Chemicals Agency (ECHA) is expecting 10,000 substance registrations to be submitted between now and 30 November 2010 deadline.  This is a massive undertaking when put into perspective that a little over 10,000 registration dossiers have been submitted since 2008. 

To further intensify this administrative task ECHA has “strongly advised” REACH lead registrants to submit their substance dossiers at least two weeks before the deadline in order to leave enough time for the other substance registrants to submit their dossiers.  If these registrants decide at this late stage to heed ECHA's advice then it should expect, by its own estimation, roughly 2,000 lead registrant dossiers in the next week.

To aid the administrative process ECHA has said that its REACH-IT system will now be open during weekends from 19 November until the first registration deadline on 30 November 2010.  This decision offers some degree of scope to registrants; however, even for the most optimistic observer there remains a frantic and fraught three weeks yet to go.

To add to the complexity and confusion of the remaining registration period it appears that an increasing number of registrants are failing the business rules checks for submission.  This lack of familiarity with the registration submission process adds to the increasing burden and nervousness of ECHA and registrants.

If you do have registration obligations for this first REACH deadline then I would encourage you to pull out all the stops ahead of the deadline.  ECHA has announced that it will shut down REACH-IT on 1 December to upgrade the system.  And what really will happen past this date is anyone’s guess.

The Environment Agency has successfully had its £4.3m bid for ‘Improving Guidance on Regulations for Enterprise and the Environment’ (iGREEN) approved by the European Commission as part of its 2009 LIFE+ process.  Getting iGREEN approved is an excellent opportunity for the Agency to improve its advice and guidance to business, particularly SME’s, against a backdrop of massive domestic public sector budget cuts and uncertainty.

The funding will permit the Agency to develop upon its existing NetRegs service, which has already been cited as European best practice by the DG Enterprise BEST project (2006) for its innovative approach to delivering practical, sector-specific, environmental guidance to businesses across the UK. 

Going beyond the well-written guidance of NetRegs the iGREEN project will help deliver a package of innovative solutions aimed at improving the delivery of advice and guidance by using multimedia and multiple channels. If successful, this will allow delivery of essential environmental messages to regulated businesses, to change behaviour and reduce impact on the environment. This will be achieved through improving the way guidance is packaged for businesses and extending outreach to a wider business community.

EEF has been an active supporter of the Agency’s iGREEN campaign.  In addition to our role as a member of the Agency’s NetRegs Business Activity Group we also outlined our support for the bid process in a formal letter to Agency’s Director for Business & Environment, Ed Mitchell.

The Environment Agency is not alone in benefitting from 2009 LIFE+ process.  SEPA, NIEA, HMRC and WRAP were associated beneficiaries of the iGREEN bid team.  Business also stands to benefit from the project, the Agency predicts an increased administration burden saving from £32m to £56m+.

The project timeline for iGREEN is 1 January 2011 – 31 December 2013.  During this period the Agency must deliver on its four main project objectives. Listed in order of importance, these objectives are:

1. Develop access to an innovative range of linked interactive products and services to help businesses comply with their environmental obligations.
2. Coordinate market intelligence and market research between relevant business support stakeholders to ensure maximum uptake of crucial environmental messages.
3. Communicate the new services to the business community and relevant policy and support organisations within the UK and to other Member States.
4. Effectively manage and monitor the technical and financial aspects of the project – Ensuring stakeholders have committed to a shared strategy to ensure the sustainability of the project outputs.

EEF will continue to take a keen interest in iGREEN to ensure that the aim and objectives of the project are delivered.  I look forward to providing you with more information on this project in the New Year when it is formally launched.

Within all the debate surrounding free allocation to industrial sectors, seen as fully exposed to international competitiveness, under the EU Emissions Trading Scheme (ETS), there is an often forgotten, but important problem that needs to be addressed. That of electricity intensive sectors which will see their energy bills significantly increase as an indirect result of the EU ETS and the pass through of costs from electricity generators to their customers.

The ETS Directive makes provision for electricity-intensive companies to be compensated by their governments for the increases in electricity prices that will become steeper as the emissions ceiling begins to bite from 2013 onwards. There have however been fears that Brussels was back-tracking from this commitment to provide the overall mechanism for Member States to provide this essential support to these sectors.

We at UK Steel (a division of EEF) held a series of meetings with Commission and UK government officials in Brussels to press for early publication of draft proposals. More recently it has been learnt that the relevant Commissioner (Joaquín Almunia, DG Competition) has now decided that the Commission should proceed with drawing up the required rules, and a draft should be issued for consultation around Christmas. We will then be looking to the UK government to support such measures for UK sectors.