1. Assessment of options to streamline legislation on industrial emissions
Meeting of the IPPC Advisory Group
8 December 2006
Caspar Corden & Alistair Ritchie
Entec UK Limited

2. Overview of presentation
Introduction to the project
Methodology
Screening of potentially problematic interactions
Streamlining scenarios
Impact assessment
Areas for further work and further data

3. Introduction – background
Range of industrial emissions legislation:
Main Directives – IPPC, LCP, SE, WI
Others – GHG-ET, EIA, Seveso II, Water Framework, chemicals legislation, etc.
Commission's 2003 Communication "On the road to sustainable production: Progress in implementing Council Directive 96/61/EC". Consultation suggested possible changes:
Greater integration with other directives
Enable emissions trading for certain pollutants
Legislative Simplification (Council) and Better Regulation

4. Introduction – objectives
Assessment to help Commission develop plans and proposals on:
Evolution of the IPPC Directive
Interaction with other instruments
EU's overall approach to controlling environmental impacts of industry
Possible difficulties in the way IPPC and other EU measures interact
Economic, social and environmental impacts of possible streamlining options:
Different degrees of integration; BAT-based permitting; ELVs; interaction of NOx / SO2 emissions trading schemes

5. Current status
Draft final report made available on Circa website (
Main report including key findings and elements of analysis
Appendices including literature review, case study reports and supporting analysis
Findings are preliminary subject to further review and analysis

6. Acknowledgements Case study installations and authorities
Advisory Group and affiliated organisations
Commission

7. Methodology – literature study (1)
Review of main Directives and other instruments
Review of literature considering interactions
Three main areas of focus:
Regulatory interactions between IPPC and others
Scope
Definitions
Operative requirements
Monitoring and reporting
Structures in other developed countries
Emissions trading for NOx / SO2

8. Methodology – literature study (2)
Review of regulatory interactions:
Several interactions with potential to cause problems
Little evidence on magnitude of problems
Other developed countries:
USA
Examples of media-specific and integrated permitting
SO2 and NOx emissions trading schemes
Japan
Local approaches
Various non-regulatory approaches

9. Methodology – literature study (3)
Emissions trading for NOx / SO2:
EU experiences (Netherlands NOx, Slovakia SO2, United Kingdom SO2)
Pros and cons
Cost-effective and rewards emission reductions (but trading can be constrained by BAT interpretation)
Regulatory certainty on minimum standard overall
Need not compromise AQ directive limit values (but this can constrain demands)
Administrative costs but these can be minimised ('transfer' scheme)
Potential to compromise integrated approach but expected to be minimal
No need for EU framework but EU input potentially needed to facilitate and ensure consistency with other legislation

10. Methodology – questionnaire
Verify or correct findings from literature study
Fill gaps in analysis
Practical experiences on interactions and possible solutions
Extent of existing Member State / installation 'streamlining'
Initial views on possible scenarios
Sent to Advisory Group 4 April 2006
31 responses received (on Europa website)

11. Methodology – case studies (1)
Practical and quantitative information at site level
Understand severity and consequences of any problems
EU versus national problems
Perceived versus real problems
8 sectors / 9 Member States / 15 installations

12. Case studies (2) Member States: Sectors: Belgium (2)
Finland (1)
Germany (1)
Hungary (2)
Netherlands (3)
Poland (1)
Portugal (1)
Slovakia (1)
United Kingdom (3)
Sectors:
Power generation (conventional fuel and waste co-incineration)
Waste incineration
Waste co-incineration in manufacturing
Refineries
Landfills
Chemicals manufacture
Surface treatment using solvents

13. Methodology – case studies (3)

14. Output of data collection stages
Aim is to "go beyond general statements or anecdotal comments on inconsistency, duplication, etc ... and provide clear, precise, practical and quantitative information, illustrated by real examples, in order to make the problems, consequences and possible solutions clear"
Much better clarity on problems with practical information and real examples
Extent of quantitative information, especially beyond the site level, is limited

15. End of part one Questions and comments from Advisory Group
Overall project
Literature and legislation review
Questionnaires
Case studies

16. Screening of potential problems
Problem definition covers all interactions
Screening to determine whether further analysis should be undertaken:
Does it represent a problem in practice (based on literature, questionnaires, case studies)?
Community legislation or national implementation
Ongoing concern or mainly historical significance?
Further analysis for those where Community action could potentially best address the problem

17. Problematic interactions for further analysis
Emission limit values of Sector Directives may limit the uptake of BAT and achievement of the desired level of ambition of IPPC
Monitoring requirements vary across Directives and may be unnecessarily burdensome in combination
Differences in definition of ‘installation’, ‘plant’, etc. has implications for separate permitting
Multiple requirements for MS reporting to Commission
Requirement to apply BAT may limit overall potential for cost-effective emissions reductions, in particular for NOx and SO2
Differences in definitions of solvent consumption between IPPC and SE Directives
Replacement of virgin fuels by waste is hindered by WI Directive ELVs

18. Analysis of possible solutions
Problem is determined to warrant further analysis (Section 4 of draft final report)
Possible objectives for future policy developed (Section 5)
Streamlining scenarios (Section 6)
Impact assessment (Section 7)

19. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

20. Summary of impact assessment
Highlights of main findings of streamlining scenarios
Detailed analysis in the draft final report:
Environmental
Economic
Social
Various other implications

21. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
Promotion of combined permitting regimes
Removal of unnecessary monitoring and reporting
Combine Member State reporting requirements
Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

22. Impact assessment – Scenario 1
All other scenarios assessed against this baseline
Takes into account future changes resulting from implementation of existing policies

23. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

24. Impact assessment – Scenario 2.1
Problem:
Separate permitting requirements under different Directives, partly due to differences (e.g. definitions of 'installation') – only some MS and some Directives
Perhaps €10-60 million per year cost savings not currently realised
Objective: reduce the cost burden associated with multiple permitting
Perhaps 10% of cost savings could be realised through amending current directives. Perhaps up to 50% if through a new combined directive
A - Sc2.1: When talking through final bullet need to explain how combined permitting is facilitated and why it is roughly 10% and 50% respectively

25. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

26. Impact assessment – Scenario 2.2
Problem:
Variety of monitoring and reporting requirements across Directives (burden in combination)
Prescriptive requirements of WI Directive may in some circumstances discourage co-incineration with no environmental benefit (case studies)
Objective: reduce costs and disincentives for operators
Significant costs of monitoring could be reduced:
Estimated annual costs for EU are: Non-ferrous metals €0.7m monitoring on top of IPPC plus € m fuel switching; cement €7m; LCPs €5-20m
Only limited sectors and pollutants identified so far where sector directive monitoring/reporting could feasibly be removed?
Need for stringent controls on where allowed and demonstrable low emissions by other means

27. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

28. Impact assessment – Scenario 2.3
Problem:
Resource burden of multiple MS reports to Commission (includes burden on operators and regulators)
IPPC, SE, WI and others
Objective: Combine reporting into single system
Overall reduction in burdens €1-10m per year
Potential savings in paper and energy for report production
Concentration of burdens at one point in time

29. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

30. Impact assessment – Scenario 2.4
Problem:
IPPC Directive: surface treatment using solvents above a 'consumption capacity'. Lack of definitions
SE Directive: defines key terms and refers to actual consumption
Installations with very low actual consumption may be covered by IPPC
Objective: Allow installations with actual consumption <IPPC 'capacity' threshold to be subject to SE Directive alone
Possible €0.2 - €1.9m savings for operators; €0.3 - €2.3m savings for regulators
Significant uncertainty on other impacts covered by IPPC and not SE Directive (metals, energy, raw materials, water, wastes, particulates, noise)

31. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

32. Impact assessment – Scenario 3
Problems:
ELVs of sector directives may limit uptake of BAT and desired level of ambition of IPPC
Use of waste fuels hindered by WI Directive ELVs
Objectives:
Make greater progress towards achieving BAT-AELs
Reduce disincentive to co-incinerate waste, reducing cost burden on industry
Example for large coal power stations (costs and benefits brought forward):
NOx – Annually € m abatement cost for kt emission reduction plus health benefits of € m
Dust – Annually €4-120m cost for 1-6kt reduction plus health benefits of €15-450m
Uptake highly uncertain
Other sectors to be considered (WI Directive and sectors not covered by sector directives and ELVs)

33. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

34. Impact assessment – Scenario 4
Problems due to different directives:
Variety of monitoring and reporting requirements across Directives (burden in combination)
Resource burden of multiple MS reports to Commission
Separate permitting requirements under different Directives
Objective: As per scenarios ; single directive would improve uptake and promote consistency
Cost savings indirectly through less uncertainty, reduced monitoring/reporting/inspection,
Additional administrative costs for revisiting and re-issuing permits

35. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

36. Impact assessment – Scenario 5
Problem:
ELVs of sector directives may limit uptake of BAT and desired level of ambition of IPPC
Objective: Make greater progress towards meeting BAT-AELs (varying degrees of incentive/requirement in scenario e.g. demonstrable assessment of BAT)
Example for large coal power stations (costs and benefits brought forward):
NOx – Annually €75-300m abatement cost for kt emission reduction plus associated health benefits of € m
Dust – Annually €2-80m cost for 0.5-4kt reduction plus health benefits of €7-310m

37. Streamlining scenarios
1 – Do nothing
2 – Streamline with minimal substantive changes
2.1 Promotion of combined permitting regimes
2.2 Removal of unnecessary monitoring and reporting
2.3 Combine Member State reporting requirements
2.4 Harmonise SE and IPPC Directive definitions
3 – Single directive without sector ELVs where overlap with sector directives (reliance on BAT)
4 – Single directive retaining sector directive requirements
5 – Clarify use of BREFs in permitting
6 – Facilitate emissions trading in NOx and SO2

38. Impact assessment – Scenario 6
Problem:
BAT requirement may limit cost-effective emissions reductions (NOx and SO2)
Objective: Determine most cost-effective instrument for reducing emissions; allow MS to establish trading/transfer schemes
Costs and benefits highly dependent upon emissions cap; reduced benefits and costs (overall net cost) associated with achieving a cap less stringent than meeting BAT-AELs throughout (but potential improvement on current situation)
ET allows cap to be set e.g. at BAT-AEL equivalence, with potential cost savings (e.g. €85m per year for a LCPs in a hypothetical MS with allocation at 200 mg/Nm3 – compared to uniform adoption of BAT-AELs)

39. End of part two Questions and comments from Advisory Group
Problematic interactions
Streamlining scenarios
Impact assessment

40. Further work and further data
"It is to be expected that review of this first draft will provoke significant comment and possibly submission of further data"

41. Significant uncertainties (1)
Scenario 2.1 – Extent of potential further combination of permitting regimes and cost savings – examples of data from Member States and operators?
Scenario 2.2 – Unnecessary monitoring and reporting requirements (esp. WI Directive) and potential for cost reductions? What other sectors/pollutants?

42. Significant uncertainties (2)
Scenario 2.3 – Time savings for MS and regulators if only one report covering IPPC, WI, SE Directives?
Scenario 2.4:
Number of installations covered by IPPC but with actual consumption < thresholds in Directive
Comparative costs of regulation (operators and inspectors) under IPPC versus SE for an installation
Implications of IPPC versus SE Directive for other environmental impacts (other pollutants, energy, waste, noise, etc.)
Scenarios 3 and 5:
Current deviation from BAT-AELs (though some information available)

43. End of part 3
Inputs from Advisory Group – further data?

44. Close Thank you for all inputs so far Caspar Corden +44 20 7843 1432
Alistair Ritchie