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Beyond Regulatory Compliance incentives to improve the performance of IPPC installations

This presentation discusses the incentives and measures that encourage companies operating IPPC installations to go beyond regulatory compliance. Case studies on NOx charge and solvent tax are presented, along with conclusions and final reports.

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Beyond Regulatory Compliance incentives to improve the performance of IPPC installations

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  1. Beyond Regulatory Complianceincentives to improve the performanceof IPPC installations Advisory Group meeting Date: 8th of December Erwin Schenk & Miriam Weber

  2. Presentation • Short intro BRC project • Overview of case studies • NOx charge • Solvent tax • Conclusions • Final report and planning

  3. Overall objective Assess instruments that encourage or drive companies that operate IPPC installations to go beyond regulatory compliance (BRC)

  4. Main research questions • What are the main incentives for companies to go BRC? • Which measures, tools, programs create these incentives? • In which context were these measures and tools successful? • What is their effectiveness in going BRC? • What is their interaction with IPPC? • Is the IPPC directive considered as a barrier?

  5. Conceptual framework Influencing mindset and behavior of IPPC operators Go BRC or improve environmentalPerformance Measures, tools/instruments • Examples • Financial instruments • Environmental agreements • Industrial effectivity programmes etc. • Examples • Cost cutting • Marketing and sales • Image and reputation • Continuity of operation etc. • Examples • Lower emissions • Less resources • More energy efficiency • Less waste etc.

  6. NOx charge Sweden EMS Regulatory flexibility Green network Denmark Energy benchmark Responsible Care Environmental covenant (NL) Environmental agreement on global warming (D) Climate change levies Performance track (US) Energy Efficiency Initiatives Environmental agreement on water emissions (PT) Solvent tax system (F, CH) BitC Environment Index (UK) Identified instruments Blue marked instruments + Emerging Technologies were selected as case studies.

  7. Case studies (1) Performance Track U.S.: • Voluntary program recognizing and rewarding facilities performing BRC • Specific requirements for participation, such as EMS, continuous improvement and information of community • Benefits of publicity, networking, regulatory and administrative incentives etc. • Due to publicity benefits, specifically large (multinational) companies with a strong public image participate • Resulting in energy efficiency, resource efficiency, waste (water) reduction • Less administrative burden for industries as well as authorities, in directing inspection resources

  8. Case studies (2) Danish Green Network: • The Green network in Southeast of Jutland (Denmark). • Industries and authorities are working together in a network, aiming at continuous improvement. • Large industries as well as SMEs are taking part in the network. • Results are reduction of energy consumption, waste and waste water, air-emissions, some innovative developments, etc. • Key words in this co-operation are dialogue, voluntary agreement and commitment. • Key members are available to assist the companies with consultancy, reporting, and for other facilitations.

  9. Case studies (3) Emerging Technologies: Technology development, reviewed for 4 different emerging technologies mentioned in the BREFs: • Integrated Gasification Combined Cycle (IGCC) with heat recovery for the waste incineration sector • Smelting reduction with Cyclone Converter Furnace (CCF) in iron and steel industry • Adsorption of PCDD/F in sinter plants • Inorganic binder material for core-making in foundries In this case we looked at incentives and conditions to develop new techniques. Key aspects: public pressure, image considerations, more efficient use of resources, economics, private/public partnerships, risk vs R&D support, strong networks

  10. Two more detailled examples of the case studies: NOx charge (4) and Solvent tax (5). NOx charge Sweden: • A charge (about 4€/kg) on NOx emissions from energy generation at the industry. • Introduced in order to reduce emissions of NOx by 30% in 1995 compared to the 1980 level. • The intention was to achieve a more rapid reduction in NOx than was considered possible by relying strictly on legislation. • There would be a drive for cost effective emission reductions beyond the legal requirements. • System is operated independently from permit authorities. • Industries involved: P&P, LCP, Wood, Food, Metal, Waste and Chemical

  11. Case studies: NOx charge Sweden (3)

  12. Case study: NOx charge Sweden (4)

  13. Case study: NOx charge P&P plant (5) NOx to atmosphere and N to water. Red line is ELV; Dotted line is target.

  14. Case studies: NOx charge Sweden • Incentives: economics and reputation. • Advantages: companies take cost effective measures that in many cases go beyond the legal requirements with respect to the reduction of NOx. • Conditions to be effective: 1. Economics & refunding to the industry, and 2. Cultural, such as high environmental awareness of Swedish industry and cooperation and trust between authorities and industry. • Disadvantage: sectors involved are not considered as homogeneous • Interaction with IPPC: positive, but could be less positive in future for integrated approach when taking into account more pollutants. • Increased emissions of non-combusted compounds, ammonia and nitrous oxide (N2O) • BRC? Yes. Not only environmental efforts, but also clear results can be demonstrated.

  15. Case study Solvent tax (F and CH) • Taxes on solvents to reduce emissions of VOCs (introduced in France in 1985, in Switzerland in 1997) • In France as part of broad environmental taxing system for industries; in Switzerland singular system for industries as well as public • Revenues of Swiss system are paid back to citizens. French revenues flow back to general state budget. • Exemption of tax in CH if reducing VOC emissions at least 50 % below legal levels.

  16. France € 38 / tonne VOC No exemption of taxes Douane competent authority No driving force for industries For specific industries Revenues to state budget Switzerland 3 Swiss Francs (€ 1,5) / kg VOC Exemption of taxes possible Douane competent authority Driving force for industries For industries and consumers Revenues paid back to public Case study Solvent tax (2)

  17. Case study Solvent tax: results CH (3)

  18. Case study Solvent tax: results F (4)

  19. Case study Solvent tax (5) • Type of instrument: financial instrument • Incentive: Primarily financial • Advantage: Driver for cost-effective substitutes or measures, making use of knowledge/expertise of industries • Conditions to be effective: tax level high enough to drive industries; close relation and cooperation between environmental and financial departments; earmarked funds for industries or public • Disadvantages: administrative burden for authorities as well as industries, dependency on information and expertise environmental and financial institutions vice versa • Interaction with IPPC: seems to fit with integrated approach; possibly negative effect on waste or energy consumption; flexible instrument • BRC?: specifically in Switzerland numerous examples on BRC, as industries can be exempted from tax if emissions are reduced at least 50 % below levels in regulation. Many industries use this exemption possibility.

  20. Case studies (6) Industrial Energy Efficiency, Slovenia and the Netherlands: • Various initiatives by authorities to improve energy efficiency, such as energy audit programme and scheme, fund for energy efficiency investments (SI) and benchmarking covenant (NL) • Strong financial driver, as investments are directly related to costs of energy consumption • Funding of audits and investments in SI were cost effective (e.g. € 1 state budget resembled € 16 energy cost saving) • In NL negotiatied agreements on energy efficiency and emission reduction; contracts signed by branch organisations • Dutch government ensures no additional legislation or taxation to be put in place • Applicable to small and large industries in SI, to large IPPC installations in NL

  21. Main conclusions on research questions (1) 1.What are main incentives for companies to perform BRC? • Finances and cost reduction (incl. resources) • Image and market • Being member of a network or voluntary initiative 2.Which instruments create these incentives? • Financial tools (taxes, subsidies) demonstrate best examples of performance beyond what is required by the IPPC permit; • Less clear examples demonstrated by more voluntary instruments such as Performance Track and Danish Green Network; • Note: many of the tools also support companies to comply with their permit conditions.

  22. Conclusions on research questions (2) 3. In which context were these instruments successful? • Cultural aspects (Scandinavian countries) • Public-private co-operation (subsidies for ET development) • Importance of networks and branches • Refunding of charges and taxes • Level of voluntary participation (compare Performance Track, Green Network vs Dutch covenants) 4. What is their effectiveness in going BRC? • Voluntary instruments often lead to small BRC improvement efforts • Financial instruments demonstrate more clear examples of BRC

  23. Main conclusions on research questions (3) 5. What is the interaction with IPPC? • Not one of interviewees (stakeholders) indicated to experience real barriers or expect problems with the instruments studied, and IPPC implementation in near future. • The networking instruments (Performance Track, Green Networks) and energy efficiency initiatives seem to fit well with all of general principles of IPPC. • The financial instruments seem to interact well, however some concerns exist for the future (e.g. NOx charge and N2O limit).

  24. Planning: final steps • Draft final report to AG members in December • Comments to DHV in January (deadline to be set by DG Env) • Final report to Commission in February

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