There has been a lot of coverage in the last week about the theft of approximately 475,000 EU ETS permits from a Czech Carbon Trader. What is interesting about this case is of course how it could happen in the first place, given that each and every EUA (carbon allowance) has its own unique serial number. How are these dodgy allowances sold, one can almost imagine a sub market, conducted in the shadows, where EUA are traded for brown packages full of Euros.

What is more interesting is how holding these stolen allowances in different parts of Europe will have a greater or lesser degree of risk attached to possession. It is only in cases like this do we remember that possession of stolen property is treated very differently, depending on which Member State you are in. For example, in the UK if you are found to have any of these allowances in your registry account, they are stolen goods and although you believed they were legitimate when you bought them, they could be confiscated without compensation. However, in Belgium (and other Member States), if you purchased the EUA in good faith, at a reasonable price, they are legally yours and you would not stand to lose money over the transaction. Even if they were taken off you, I understand you would be compensated for your loss.

This might go some way to explain the motivation for the theft in the first place, apart from money. It begs the question, if you are based in the UK, how do you know the allowances you have recently purchased are legitimate and how do you know assess the risk.

It appears the government is trying to make good on its manifesto pledge to increase the proportion of tax revenues accounted for by environmental taxes.

This week Treasury commenced a unique consultation exercise on environmental taxation. It held one of a number of workshops looking at how fiscal instruments can help shape behaviour change to meet environmental policy objectives. I say unique because Treasury rarely organise events of this ilk, which are commonplace in other departments. It is, to be honest, a breath of fresh air.

We were asked what would be a “fair” environmental tax. How effective are existing environmental taxes in changing behaviour? What existing taxes could be made “greener”? And what new “green taxes were introduced?

And we were treated to not one, but two government ministers:  Economic Secretary to the Treasury Justine Greening and Chief Secretary to the Treasury, Danny Alexander. The results, we were told, are to feed into a programme of work on environmental taxes which will influence the budget and policy making beyond.

Environmental taxes have proven to be effective provided they are visible, well-targeted and with a clear trajectory which provide time to plan and adapt. If designed correctly they could prove to be a powerful incentive for change, as argued in our climate report which calls for a carbon tax to replace layers and layers of poorly connected and over-designed and costly climate change policies.

But the government must be wise to growing cynicism amongst manufacturers. Before being elected in, the Conservatives promised that any additional revenue generated from new green taxes would be used to reduce the burden of taxation elsewhere. Yet anyone in the Carbon Reduction Commitment will roll their eyes at the latter. The decision not to recycle revenues generated from the scheme means an extra £1 billion for the Chancellor’s coffers. Not a bad haul for a scheme that was originally sold to us as being revenue neutral to business.

In light of this u-turn, it is therefore not surprising that there is a healthy degree of scepticism that this exercise is just a means for additional revenue-raising. So if government genuinely wants business buy-in on this agenda it must ensure – now more than ever – that it stays true to its promise to reduce the burden elsewhere. 

Let me know what you think.

The Industrial Emissions Directive (IED) entered into force today.  The Directive which consolidates the Industrial Pollution Prevention and Control Directive (IPPC) and six other existing Directives related to industrial installations was designed with the aim of providing a single clear and coherent legislative instrument for controlling pollution from industrial operations.

 The Industrial Emissions Directive was the outcome of a difficult and, at times, protracted lobbying campaign, but resulted in a workable and pragmatic outcome for industry and which ensures an improving level of environmental protection from sources of industrial pollution.  EEF was actively engaged on this campaign issue from the outset.

 At the core of the new Directive are the provisions to include an operating lifetime extension for large combustion plants and the continuation of derogations for operators from Best Available Technique (BAT) where justified. 

 The UK government (DEFRA) and regulator (Environment Agency) will begin working closely with stakeholders on how to implement the new requirements of IED.  The UK (and other Member States) has until 6 January 2013 to transpose the requirements of IED into national legislation (i.e. 2 years from 'entry into force'). In England & Wales this is likely to be via the Environmental Permitting Regulations.

Other important IED dates which are noteworthy are:

• From the 6 January 2013 IED will apply to all new installations
• From 6 January 2014 IED will apply to existing installations that previously were subject to IPPC, WID, SED and TiO2 directives (but not LCPs).
• From 6 July 2015 IED will apply to existing installations operating newly prescribed activities (e.g. specified waste recovery activities, wood preservation. 
• From 1 January 2016 LCPs must meet the specific requirements set out in Chapter III and Annex V of the IED

The IED builds upon the IPPC Directive, which is liked by industry for its risk-based approach to determining environmental permitting decisions.  It is now important that the Directive is successfully transposed into UK law.  EEF will be working as a key stakeholder in future government discussions to ensure this is the case.

Data estimates for commercial and industrial (C&I) waste arisings in England show a 29% reduction over the last six years.  These results, released as part of a DEFRA survey, demonstrate the efforts taken by businesses to improve resource efficiency despite a floundering national waste policy.

In 2009 48 million tonnes of C&I waste was produced in England.  This compares to 68 million tonnes in 2002/03, the last time the survey was carried out.  The results also show greater levels of recycling of C&I waste (up 10% over period) and a reduction (12%) in volume of waste sent to landfill.

Whilst DEFRA is keen to show evidence that its policies are decoupling economic growth from waste production it has remained tight-lipped on C&I performance.  This is, in part, due to the fact that the method for data collection is reliant on a number of estimates, and with changes to waste classifications the results are not entirely comparable with earlier surveys in 1998/99 and 2002/03.  Equally, DEFRA remains unclear over the effect the recession has had on waste arisings. 

There is, however, common acceptance that waste is reducing and that this trend is reflected across all waste types with the exception of “discarded equipment” (i.e. waste electrical and electronic equipment).  Yet without confidence in the data it remains difficult to judge overall performance and to ensure that policies are delivering on their objectives and to time.

The survey data will undoubtedly be used to shape the government’s Waste Review which is expected in April.  However, to get a full understanding of waste trends in England the Government must get a proper grip on waste data to ensure its policies facilitate further reductions which help not hinder business.  Until this is achieved the goal of a ‘zero waste economy’ seems a long way off.