1. Assessment of options to streamline legislation on industrial emissions IPPC Review Stakeholder Hearing 4 May 2007 Caspar Corden Entec UK Limited

2. 2 Objectives of the project 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

3. 3 Methodology Main project tasks: –Literature study –Questionnaire –Case studies –Screening and scenario development –Impact assessment of streamlining scenarios Broad study covering numerous issues – detailed approach and results are in reports

4. 4 Streamlining scenarios Do nothing 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 Single directive without sector ELVs where overlap with sector directives (reliance on BAT) Single directive retaining sector directive requirements Clarify/improve use of BREFs in permitting Facilitate emissions trading in NO x and SO 2

5. 5 Removal of unnecessary monitoring and reporting requirements 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 Certain monitoring/reporting requirements could be disapplied (where no emissions or very low emissions of pollutants) in specific cases based on evidence from operator meeting defined criteria at EU level Significant costs of monitoring could be reduced: –Estimated additional annual costs of monitoring under WI Directive (on top of IPPC) across EU are: Non-ferrous metals €0.7m; cement €7m; LCPs €5-20m –Some of these costs could be avoided –Only limited sectors and pollutants identified where sector directive monitoring/reporting could feasibly be removed

6. 6 Combine Member State reporting requirements Problem: –Resource burden of multiple MS reports to Commission (includes burden on operators and regulators) –IPPC, SE, WI Directives and others Objective: –Combine reporting into single system Overall reduction in burdens €1-10m per year across EU (plus savings in paper and energy for report production) However, concentrates burdens at one point in time

7. 7 Integration of existing directives into single framework Problems due to different directives (IPPC, SE, LCP, WI): –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 –Lack of certainty and consistency Single directive could lead to cost savings through greater certainty, reduced monitoring/reporting/inspection Possible additional administrative costs for revisiting and re-issuing permits if necessary Benefits only fully realised in combination with other scenarios (e.g. combining monitoring/reporting requirements; harmonising certain definitions)

8. 8 Single directive without sector ELVs where overlap with sector directives (reliance on BAT-based approach) Problem: –ELVs of sector directives may limit uptake of BAT and desired level of ambition of IPPC (some permit ELVs clearly based on sector Directives) Objective: –Make greater progress towards achieving BAT-AELs Example for large coal power stations: –NO x – Annual emission reduction 0-100kt across EU with valued benefits of €0-800m at abatement cost of €0-230m (benefits and costs brought forward) –Dust – Annual emission reduction 0-3kt across EU with valued benefits of €0-230m at abatement cost of €0-60m –Mercury – Annual emission reduction of 0-0.7t across EU Uptake highly uncertain and sector directive ELVs provide a 'safety net' Other sectors also relevant e.g. those covered by WI Directive

9. 9 Improving use of BREFs in permitting Problem: –Insufficient progress towards meeting BAT-AELs in BREFs; some permit ELVs clearly based on sector Directives Objective: –Make greater progress towards meeting BAT-AELs Example for large coal power stations: –NO x – Annual emission reduction 30-260kt across EU with valued benefits of €100-2,200m at abatement cost of €75-600m (benefits and costs brought forward) –Dust – Annual emission reduction 0.3-8.0kt across EU with valued benefits of €7-600m at abatement cost of €2-160m –Mercury – Annual emission reduction of 0.1-2.0t across EU Implications depend upon specific change considered: –Higher estimates of benefits assume demonstrable record of assessment why deviation from BAT-AEL has been allowed (more prescriptive than current requirement for new/changed installations) Relevant for other sectors

10. 10 Facilitate emissions trading in NO x /SO 2 (1) Problem: –BAT requirement may limit cost-effective emissions reductions (NO x and SO 2 ) –Some Member States already have schemes in place Objective: –Use most cost-effective instruments for reducing emissions; allow MS to establish trading/transfer schemes In example for this study, group of installations and/or sectors designated by MS to operate under a cap (e.g. equivalent to BAT-AELs) Voluntary; requirement to apply installation-specific BAT for SO 2 and NO x removed subject to ET being taken up instead BAT-based permit conditions remain for other pollutants Compliance with ambient air quality limits would remain part of IPPC permit conditions

11. 11 Facilitate emissions trading in NO x /SO 2 (2) Coal power sector taken as illustrative example only, to illustrate potential cost-effectiveness Aim was not to consider how such a scheme would work in practice Main benefits arise derive from differences in marginal costs Overall cost saving compared to implementing installation-specific BAT-AELs (and environmental benefits foregone) – could achieve broad goal of BAT- AELs at lower cost Monitoring, reporting and verification costs do not need to be significant

12. 12 Other scenarios Impacts of scenarios assessed against a 'do nothing' scenario Promotion of combined permitting regimes –Some MS have separate permitting requirements under different Directives (e.g. in part due to definitions of 'installation') –Could reduce cost burdens by perhaps up to €5-30m if done as part of a new combined directive Harmonising IPPC definitions with SE Directive –Surface treatment using solvents ("consumption" versus "capacity") – low consumption activities may be covered by IPPC –Possible savings of €0.5 to €4m per year for operators and regulators across EU, but some risk of emission increases

13. 13 Conclusions Provision of clear, precise, practical and quantitative information with real examples Making problems, consequences and possible solutions clear Lack of quantitative information/evidence beyond individual site level for a number of issues so significant uncertainties in EU-level data (other studies ongoing) Potentially significant improvements could be made –Significant cost savings for industry/regulators –Enhanced level of environmental protection –Improved competitiveness/competition –Combinations of these Risks of possible negative impacts for most scenarios –Making changes to current regime –Unintended consequences for environment e.g. risk of increased emissions (safeguards needed)