The Industrial Emissions Directive 2010

1. The Industrial Emissions Directive 2010 YES Breakfast, 27 February 2013 Nabarro LLP and Waterman

2. What are the aims of the Industrial Emissions Directive 2010 (“IED”)? • IED replaces, amends and corrects seven existing environmental Directives on pollution control • It aims to: • resolve overlaps and inconsistencies between the directives by combining them into a single, unified structure • simplify and reduce the administrative burden on operators • streamline permitting, reporting and monitoring requirements • achieve a high level of environmental protection • strengthen the use of best available techniques (“BAT”)

3. How will the IED be implemented? • Implementation by 7 January 2013 - England and Wales missed this deadline • Implemented by the Environmental Permitting (England and Wales) Regulations 2013 (“2013 Regulations”): • 2013 Regulations approved by Parliament on 13 February 2013 • DEFRA: 2013 Regulations in force today (27 February 2013) • 2013 Regulations will amend the current Environmental Permitting (England and Wales) Regulations 2010 (“EPR”) to transpose the requirements of the IED • New guidance is to be developed and existing guidance updated • Regulators have been briefed about the changes to the EPR

4. IED timetable for impact on business • 7 January 2013 – operators of newPart A and existing Part Binstallations must comply with applicable parts of IED. Applications for new facilities after this date must demonstrate IED compliance • 7 January 2014 - operators of existingPart A installations (not Large Combustion Plants (“LCPs”) must comply with applicable parts of IED. Includes new facilities permitted prior to January 2013 but operational after this date • 7 July 2015 - IED applies to existing installations operating newly prescribed activities (e.g. some composting & Anaerobic Digestion facilities, some Mechanical Biological Treatment facilities) • 1 January 2016 - LCPs must meet the specific requirements set out in Chapter III and Annex V of the IED

5. IED changes: Extended scope of EPR • EPR requires operators of “regulated facilities” to hold an environmental permit for their activities • IED has widened the definition of a “regulated facility” • various sector-specific technical changes have been implemented • permits will be required for previously excluded activities and vice versa • Changes since the DEFRA consultation • 2013 Regulations do not introduce a single permit for multiple activities at one installation • no registration system for solvent emission activities in place of the permitting regime, therefore a permit will still be required

6. IED changes: BAT • Regulator responsibilities Regulators are required to: • be aware of developments in BAT • actively encourage the application of emerging techniques • use future BAT conclusions as the reference point for setting permit conditions • set permit conditions stricter than BAT only where: • necessary to ensure that no significant pollution is caused; or • environmental quality standards require stricter conditions • Impacts • Operators will be under increased pressure to apply new techniques to their activities • Regulators may use applications for new permits/permit variations to discharge their obligation to encourage the use of emerging techniques • Operators should consider appeals against “gold-plated” permit conditions

7. IED changes: Deemed conditions and enforcement • Permits for Part A installations, waste/co-incineration plants or solvent emission activities deemed to include conditions: • If a permit condition is breached to: • inform the regulators; • ensure that compliance is restored within the shortest possible time; and • If the breach poses immediate danger to human health or the environment, to suspend operations until compliance is restored • If an incident occurs which significantly affects the environment to: • inform the regulators; • take measures necessary to limit the environmental consequences; and • take measures to prevent further possible incidents • Impacts • Regulators can now serve enforcement notices even if no permit breach • Increased risk of an offence under the EPR, leading to severe penalties: • Magistrates’ Court – fine up to max £50,000 and/or 12 month imprisonment • Crown Court – unlimited fine and/or 5 years’ imprisonment • Directors’ liability • Loss of revenue on suspension of operations • Operators need clear procedures on reporting lines, monitoring, incident notification and liaison with regulators

8. IED changes: Permit reviews • Regulator obligations: to reviewpermits in accordance with Art. 21 of the IED. The reviews will: • take place within 4 years of the introduction new BAT conclusions; • reconsider permit conditions and update (where necessary) to ensure compliance with IED and new/updated BAT conclusions • reconsider and update permit conditions, as a minimum, where: • pollution caused by the installation is of “such significance” that existing emission limit values need to be revised or new values included in the permit; • operational safety of an activity requires other techniques to be used; and • it is necessary to comply with new (stricter) environmental quality standards • Impacts for operators • Possible variation of permit conditions and introduction of more stringent requirements • Operators should consider whether there is any scope to appeal those variations

9. IED changes: Baseline reports • Obligations For permitted activities involving the use, production or release of hazardous substances, a baseline report will be required to: • determine the state of soil and groundwater contamination at the permitted site • enable a comparison to be made at the time of surrender • Impacts for operators • New installations: baseline report required on permit application • Current installations: baseline report required on the regulator’s next operational review • Increased costs for operators to prepare/revise reports

10. Summary of technical changes to EPR • Stringent Emission Limits for LCPD installations • Many activities have been removed from Schedule 1 or downgraded from Part A1 to A2 or B • Waste Section has been significantly rewritten • Some new activities have been added

12. LCPD • Minimum requirements for large combustion plants – Chapter III and Annex V • SOx, NOx and dust emission limit values (ELVs) must be at least as stringent as those prescribed in the IED • It also provides various optional “bounded flexibilities” through which those ELVs can be relaxed or not applied • The transitional national plan (TNP) enables operators to opt to place plants in the TNP. Overall annual emissions cap which reduces between 2016 and 2020. Gives operator time to make adjustments • The “limited life derogation” (LLD) operate for no more than 17,500 hours, from 1 January 2016 to 31 December 2023. ELVs set at 31 December 2015 are maintained till closure

13. Activities Removed from Schedule 1 • Forty-nine industrial activity descriptions removed because: • no longer carried out e.g. destroying a railway vehicle by burning if asbestos has been incorporated in, or sprayed on to, its structure • covered by other description e.g. landfill gas engines will now generally be regulated as DAA's to the landfill • not in IED – deregulation • DEFRA and WAG have retained some activities which are not in IPPC or in IED but pose an environmental risk • For a full list of changes please see handout

14. Activities Removed from Schedule 1 (cont…) A number of activities removed from following sections: 1. Energy • 1.1 Combustion activities • 1.2 Gasification, liquefaction and refining activities 2. Metals • 2.2 Non-ferrous metals 3. Minerals • 3.1 Production of cement and lime • 3.2 Activities involving asbestos • 3.3 Manufacturing glass and glass fibre • 3.4 Production of other mineral fibres 4. Chemicals • 4.1 Organic Chemicals • 4.2 Inorganic chemicals • 4.3 Chemical fertiliser production • 4.4 Plant health products and biocides • 4.5 Pharmaceutical production • 4.7 Manufacturing activities involving carbon disulphide or ammonia 5. Waste • 5.1 Incineration and co-incineration of waste 6. Other • 6.1 Paper, pulp and board manufacturing activities • 6.4 Coating activities, printing and textile treatments • 6.6 Timber activities

15. Activities downgraded from Part A1 to A2 or B 3.1 Production of cement and lime • Grinding cement clinker is moved from a Part A1 to a Part A2 activity 4.1 Organic Chemicals • A1(e) The flame bonding of polyurethane foams or polyurethane elastomers, is now a part B activity 6.6 Timber activities • The part A1 activity is removed (Curing, or chemically treating, as part of a manufacturing process, timber or products wholly or mainly made of wood if any substance in paragraph 7 of Part 1 of this Schedule is used). • It is replaced with a Part A2 activity: Preservation of wood and wood products with chemicals with a production capacity exceeding 75m3 per day other than exclusively treating against sapstain

16. If the activity is no longer permitted then what do I do? • Where the permit relates only a schedule reference which is no longer included, that permit ceases to have effect. • Where a permit contains any conditions which relates solely to a description which is no longer included, that condition ceases to have effect.

17. If the activity moves from Part A to Part B or other type of permit then what do I do? • Activities moving from Part A to B or other type of permit: • the permit is deemed to be granted; and • any conditions of that permit which are applicable only to Part A installations cease to have effect. • Change in regulator to Local Authority

18. Waste Sector - Incineration • Incineration and co-incineration of hazardous waste is only a Part A1 activity if it is above 10t per day. • Incineration and co-incineration of non-hazardous waste is only a Part A1 activity if it is above 3t per hour; it was previously 1t per hour. • The incineration of waste in a plant which is not an incineration plant or a co-incineration plant is no longer a Part A1 activity. • A2 activities are removed and Part B activities now cover incineration or co-incineration of specific wastes if they exceed 50kg per hour. • Removal of PAH and PCB monitoring requirements from waste incinerators. • Activities below these thresholds are small waste incineration plants (SWIP) and BAT does not apply.

19. Waste Sector – Disposal and Recovery • Previous Schedule 1 of EPR • Section 5.3 was Disposal of Waste other than by Incineration or Landfill • Section 5.4 was Recovery of Waste • Did not include recovery of non-hazardous waste • Deemed equally high environmental risk as other waste activities • New Schedule 1 of EPR • Section 5.3 is now disposal or recovery of hazardous waste exceeding 10 tonnes per day, including blending, mixing or repackaging prior to other activities • Section 5.4 is now disposal or recovery of non-hazardous waste exceeding 50 tonnes per day (or 100 tonnes per day if the only waste treatment activity is anaerobic digestion) including new activities: • pre-treatment of waste for incineration or co-incineration • treatment of slags and ashes • treatment in shredders of metal waste including waste electrical and electronic equipment and end-of-life vehicles and their components • larger biological treatment sites including MBT, AD and composting

20. Waste Sector – Disposal and Recovery (cont…) Old Section 5.3 Part A1(b): The disposal of waste oils (other than by incineration or landfill) in a facility with a capacity of more than 10 tonnes per day (including storage) New Section 5.3 Part A(1)(a)(x): Disposal or recovery of hazardous waste with a capacity exceeding 10 tonnes per day involving one or more of the following activities: oil re-refining or other reuses of oil ‘Do you have any uncertainties about which waste management activities are now subject to IPPC requirements? If so, how would you like them remedied?’ Fifteen out of 27 had uncertainties, including five of the eight respondents from the Waste sector. These uncertainties can be addressed in guidance.

21. Other New Activities IPPC requirements upon: New activities at current Part A installations have until 15 July 2015 to obtain a permit

22. Application Timetable • “Duly made” applications must be submitted by: 30 September 2014: • Gasification or liquefaction of coal or other fuels in installations with a total rated thermal input of 20 megawatts or more • Biological processing of chemicals • Non Hazardous Waste Recovery Activities 31 December 2014: • Hazardous Waste Activities • Non-Hazardous Waste Disposal • Wood Preservation 31st March 2015: • Temporary or underground storage of hazardous waste • Independently operated treatment of waste water • Food sector

23. BAT Assessment Published in 2004 Published in 2004 Published in 2009 BAT – Best Available Techniques Sector specific

24. Key BAT changes BAT Conclusions published by the EU Four years for regulator to review permit if necessary, update permit conditions “derogation” provision - regulators can set less stringent emission limits than BAT

25. Published BAT Conclusions 2013/84/EU: tanning of hides and skins 2012/135/EU: iron and steel production 2012/134/EU: manufacture of glass Best available techniques reference document for energy efficiency 2012/119/EU: rules concerning guidance on the collection of data and on the drawing up of BAT reference documents and on their quality assurance

26. How do BAT conclusions vary from current BAT?

27. BAT – Get involved Information comes from operational experience Operators have full opportunity to influence BAT conclusions DEFRA chairs a grouping of UK industry representatives who have shown themselves able to identify any perceived disparity of practice within the EU in respect of industrial pollution control.

28. Costs • Associated charges are very unlikely to increase as a result of IED • However, cost to specific sectors: • Possible refund on subsistence costs for activities that are no longer covered by a schedule reference

29. What to do now (and where you could come unstuck)… • Start permit applications early to: • allow adequate time to complete them before the deadlines • discover and overcome issues early • allow regulated activities to start sooner, bringing immediate economic benefits • avoid unnecessary enforcement action • Ongoing compliance • Audit current processes/procedures to ensure compliance with IED and BAT • Review subsistence charges to deduct activities no longer requiring a permit • Consider preparation or review of baseline reports • Develop a plan for ongoing monitoring and assessment of activities against these criteria, to avoid nasty surprises on permit review • Regulator liaison • Developing early and open relations is to everyone’s benefit • Ensure that advice/position statements are given in writing • Educate the regulators about your business – and CHALLENGE them!

31. Contact details • Waterman • Tom Cullingford, Associate Director • thomas.cullingford@watermangroup.com • 0114 229 8900 • Nabarro • Lukas Rootman, Partner • l.rootman@nabarro.com • 0114 279 4022 • Alex Ibrahim, Senior Associate • a.ibrahim@nabarro.com • 020 7524 6569 • Rebecca Roffe, Associate • r.roffe@nabarro.com • 0114 279 4040