In May 2017, we reported here on an interesting instance of a refusal by the Environment Agency (“Agency”) to grant the Day Group an environmental permit to operate a new facility at Avonmouth Docks, Bristol. Day Group appealed against that refusal. On 31st January 2018, the refusal was overturned and the permit was granted. Contested permit decisions of this nature are rare and as some of the issues raised are both interesting and key to many permitting situations, we set out below pertinent details of this permitting journey.

Background

Day Group applied for an environmental permit to treat up to 130,000 tonnes per annum of incinerator bottom ash (“IBA” – which is waste). The operations at the facility are designed to remove metals in the IBA (for further treatment offsite) leaving the residue as a product commonly referred to as incinerator bottom ash aggregate (“IBAA”). IBAA is a product used in the construction sector. Day Group is a leader in IBA treatment and the new facility was designed and built following principles applied successfully at some of its other permitted sites in England. Indeed the design was arguably amongst the best currently operating anywhere in the EU.

In April 2017, the Agency refused the permit application. Day Group appealed and the appeal was heard by Inspector Palmer at an Inquiry which began on 28th November 2017 in Bristol. The appeal was contested by the Agency (until the day before the opening of the Inquiry).

The appeal was also contested (including throughout the Inquiry hearing itself) by Bristol City Council (the “Council”), in respect only of potential noise nuisance, and by local residents on miscellaneous grounds.

Permit Application

In its permit application Day Group expressly recognised that the site is located close to a number of sensitive receptors. These included housing (the closest of which was approximately 50m away) and the Severn estuary.

In addition to these sensitivities, current and historic (non- Day Group) waste management operations at the site, and neighbouring the site, had caused amenity issues for local residents. In turn, these issues led to local resentment and lack of confidence concerning the potential management of operations and regulation of such operations. Of course, these other operations were not the responsibility of Day Group but, nonetheless, Day Group recognised the existence of these concerns and sought to address them in both the design of the facility and its intended management of operations.

Intended operations

Operations at the site would be conducted in three distinct stages. The first stage was initial storage and maturation of the IBA (approximately three weeks) in a three sided building with an open front and a vented ridge line (for gas management), water suppression system to assist in managing potential dust emissions and another suppression system to assist in managing odour risk. Following maturation, the IBA would be transported in an enclosed environment via covered conveyors to a series of enclosed buildings in which trommels, magnetic and eddy current separators and the like would remove the metal fractions and deposit these in skips. The residual IBAA would be transported, again via enclosed conveyors, to the third stage being stockpiling, storage and blending in walled bays. This third stage was not enclosed but was covered by a comprehensive water suppression system to manage dust.

Day Group did not shy away from the potential amenity risks. It commissioned odour, dust and noise risk assessments of its design and intended management. These confirmed that the design and intended management were amongst the best in the UK and/or the EU.

Refusal

The reasons given for the refusal were: "based on the information that has been provided to us we [Environment Agency] do not consider that the proposed method of operation would use the best available techniques [“BAT”] and we are not satisfied that the activities can be undertaken without resulting in an unacceptable risk of significant pollution of the environment due to dust and odour which will result in offence to human senses or impair/interfere with amenity and/or legitimate uses of the environment and be harmful to the quality of the environment. In addition it has not been shown that pollution will be prevented in the event of severe flooding at the site".

Dust and Odour

At the permitting stage, the Agency was not satisfied by the infrastructure and management controls employed by Day Group. It required total enclosure of operations within buildings with negative air pressure, fast acting doors and air abatement. For the Agency, only this would be BAT.

The parties were very far apart in terms of evidencing and justifying their positions on these potential amenity risks. In terms of evidence, the Agency relied on a spreadsheet of its officers' comments and experiences arising from a number of IBA facilities in England (including Day Group sites). Day Group contested the relevance, weight and proper interpretation of this evidence and relied heavily on its own record at its similarly designed and operated sites.

BAT

Bearing in mind that BAT is a pivotal feature of permitting it was fascinating how differently the two parties approached what BAT means and how it is applied. Unfortunately space constraints do not permit a deep dive here into the arguments. The Agency argued that in the local setting nothing less than total enclosure with negative pressure, fast acting doors and abatement of air would suffice. However the Agency could not articulate exactly what this meant, whether it related to all 3 stages of the operations or only certain stages and how this position fitted within current law and policy in England, the UK and EU.

Day Group disputed the Agency’s position on BAT in terms both of practice and theory. In terms of theory, Day Group was forced to address what was current BAT and what might be BAT. The reason for this was that for this type of installation BAT is broadly shaped by the BAT Reference Document (“BREF”) on waste incineration (current version being dated 2006). This BREF was in the process of its periodic review at EU level (a lengthy and unfinished process). It appeared to Day Group that in real terms the Agency was essentially trying to impose what it (the Agency) thought BAT should be in several years when the BREF had finished the process of its periodic review at EU level (2019) and also the subsequent implementation period for the revised BREF (4 years to 2023). In terms of practice Day Group produced convincing evidence from IBA facilities currently operating in both the UK and in other EU member states to the effect that the proposed facility would entail BAT and that the Agency’s position (without justification) was beyond BAT.

Financial Considerations

For Day Group this was a major piece of the argument albeit contested by the Agency. Day Group challenged the Agency’s position on the grounds that the Agency had not had due regard to the financial considerations applicable to its decision making set out in (1) the legal definition of BAT, (2) section 39 of the Environment Act 1995, (3) (relevant) Sector Guidance S5.06 and (4) the new but untested (at least in this context) Statutory Growth Duty (regulators to have regard to economic growth in their decision making - section 108(1) of the Deregulation Act 2015).

Flooding

The Agency’s concern was that in the event of flooding of the site what measures would be in place to tackle the risk of receding flood waters dragging IBA offsite and causing pollution? Early in the appeal proceedings Day Group and the Agency agreed a flood emergency plan which removed this area of contention.

Permit agreed

Just before the Inquiry opened, the Agency dropped its opposition to the grant of the permit. Day Group agreed to make some amendments to the facility and management plans. The Agency and Day Group also agreed the wording of an environmental permit for the Inspector to consider.

The Council and local residents continued their opposition to the grant of the permit, and thus the inquiry itself had to run its course.

Decision

Inspector Palmer decided in favour of Day Group. He concluded: "It has been demonstrated that the installation would not result in significant pollution and that appropriate mitigation measures would be used to reduce emissions to acceptable levels in order to protect the environment. Furthermore, the conditions of the draft permit would ensure adequate ongoing protection of the environment. It has been demonstrated that the requirements of the IED [Industrial Emissions Directive] and EPR [Environmental Permitting (England and Wales) Regulations 2016] would be met. Accordingly I conclude that the appeal should be allowed and an environmental permit for the scheduled activity described above be granted...".

We draw two particular observations from this appeal. The first is that what probably made the permit application so difficult was the amount of local opposition arising from experiences associated with historic and other activities. It was almost as if the regulatory acceptance threshold was set at a level higher than required by law, to reflect this local opposition. Day Group was not responsible for these other activities but nonetheless its application was tarred by such grievances. The second is how we view a permit, in commercial terms. Sometimes permitting is approached purely as a compliance issue. Day Group’s determination in this appeal demonstrates that in real terms the permit is an asset in its own right. It is one of the assets required for the business.