Inside Track

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.

The New Year will see the Environment Agency flex its new found muscle as it starts to use the six new civil sanction powers that were introduced under the Regulatory Enforcement and Sanctions Act 2008.

Five of the new powers: Fixed Monetary Penalties; Variable Monetary Penalties; Compliance Notices; Restoration Notices; and Stop Notices, do more or less what their title suggests.  However, the sixth power, an Enforcement Undertaking (EU) is a new offering and may be used widely by the Agency. 

An EU allows an offender to agree with the regulator a course of corrective action rather than face prosecution.  The Agency has developed an ‘undertaking form’ and guidance on its website to make it easy for offenders to offer an EU.

The Agency’s decision to pursue these new powers was in due to its frustration at having no real middle ground between offering advice/cautions and formal prosecution. It also didn’t help that its success at prosecution was pretty poor.

The Agency has argued that these new powers will give it greater scope to influence and affect change within an organisation.  During the consultation process, in which EEF was actively engaged with government and the regulator, the Agency was keen to stress that these powers would not be issued flippantly like parking tickets.  The first port of call for any inspector would be to offer information and advice where a non compliance has been observed, but could resort to civil sanctioning powers where there is repeated non-compliance.

These new powers mark the start of a new and hopefully increasingly positive relationship between the regulator and regulated industry.  However, to ensure the transition of civil sanctions from policy development to deployment are fairly and equitably applied EEF wants to hear from members where these powers have been exercised and for what reasons.  We want to ensure that the Agency honours its consultation commitment that the powers will not be the regulators default position and that they will be applied consistently and proportionately.   

Did the European Chemicals Agency (ECHA) get its figures wrong on the number of substances that were to be registered under REACH by 30 November?  ECHA predicted upwards of 5000 substances, we now know that only 4,300 substances have been registered in time for the first deadline.

This disparity is a worry to EEF. We have long been concerned that some chemical manufacturers may decide not to register the substance(s) they produce.  This action would require that the substance(s) be withdrawn from the market.  If downstream users are not informed of this decision it exposes them to business continuity risks. 

It is too early to say whether ECHA has got its figures wrong or not as it will take some time over the coming weeks for the 24,675 individual substance dossiers to be processed.

In ECHA's press release it has said that it will, in the subsequent months, examine any differences between the final number of registered substances against its earlier forecast.  However it does state that the number of registrations is in line with the original Commission estimate.

Here’s hoping for a happy ending.

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.

I fear that most of my blog items are telling manufacturers bad news about climate change and environment policy developments. Well this one is very different and it shows that manufacturers are forging ahead in terms of sustainability.

The EEF Future Manufacturing Awards will announce its 2010 regional winners at ceremonies held across the UK next month, with particular recognition for companies successfully seizing the business opportunities presented by the fast growing market for low carbon products and services; and also those actively taking measures to reduce water, electricity and gas usage, and cut waste to landfill. I have seen these entries and there is so much the sector can learn from the examples of innovation.

The Awards have been designed to recognise environmental responsibility, innovation, enterprise and excellence in apprenticeships across today’s manufacturing industry. The Environmental category, in partnership with British Gas, recognises the outstanding measures taken by companies in the sector to preserve the environment and combat climate change.

In this, the second year of the competition, members of the judging panel say the entries have been of an exceptionally high standard. It is incredibly impressive and significant to see such a large volume of manufacturers achieving massive cost savings as a result of their approach to environmental efficiency.

Well done to all those who have entered into the awards programme this year, for having an important story to tell. Find out the winners of the regional ceremonies at the end of November here: www.eef.org.uk/awards

I think most business caught by the CRC are still in shock that government will, from 2012, take nearly £1bn from them in what can be seen as a carbon tax.

In the absence of recycling revenues, should government be confident that the performance league table, which provides a publically comparative index of participant’s energy efficiency, is a strong enough driver to affect substantial change within the sector.

I believe that these sort of schemes work much better if there is both a ‘carrot and stick’, rather than just the ‘stick’. This heavy stick approach will do little to engage organisations, but more importantly, as I said last Wednesday, seriously damages the trust between manufacturers and government.

Our members are so dismayed at the announcement that we have today written to Gregory Barker to outline our concerns. The letter, backed by many manufacturing companies and manufacturing Trade Associations, will outline that the decision to push through this change to CRC without consultation seriously calls into question the way in which government intends to work with the private sector, as a trusted partner, to tackle the national deficit. The decision also does nothing to simplify an already complex policy landscape and calls into question the government’s desire to deliver a low carbon economy at least cost to industry.

We will hear further details of proposed changes to CRC in the next month or so and I am sure we are all left wandering whether those proposed changes will be as damaging as this one.

As I mentioned in a previous blog entry, the Environment Agenda is changing, mainly due to a predicted significant cut in its funding from central government. The way it regulates industry is set to take on a different form in the next year or two. With less emphasis on inspections and form filling and a new focus on nailing the bad guys and self compliance for the good guys.

Self compliance may take the form of submitting an ‘Annual Environmental Compliance Statement’ that is signed off by the CEO. The statement could include some minor breaches of your permit, as long as it is shown the company has adequately dealt with the problem(s). There would be fewer, or no, inspector visits and the whole exercise would be kept within the current legal framework and therefore there is no need to amend existing legislation. Effectively, the Agency would leave you alone and trust you to get on with running your business.

It sounds like a ‘no brainer’ surely? But for me, it raises a few important questions.

Unlike the Health & Safety regime, your CEO isn’t as personally liable for managing and signing off the company environmental compliance record. This new approach would put the CEO firmly in the firing line, if the statement was found to be anything but accurate.

Would your CEO therefore be happy to take on this added personal liability?

One solution could be for ‘the Board’ to sign off the Compliance Statement. This would still enable significant ‘buy in’ from those at the top of the company. As this Board level involvement is seen as a really positive aspect of the compliance statement. In that, it brings to the attention of the Board, issues of emissions to land, air and water.

Another problem is that the Statement would be a public document. Also, if the CEO or Board had to sign off the report, then might this require more work for the company as a whole. Surely the Board would require a significant level of assurance, that what they are signing is robust and correct. Of course you could see this from the other side of the coin, that ‘robust and correct’ is no bad thing.

Certainly the Environment Agency needs to show clearly the benefits, such a system would bring to the Regulator and industry alike.

What is your opinion, is this a brave new way forward, or more red tape?