EU air quality package  revealed

The European Commission  published its Clean Air Policy  package on 18 December 2013,  which confirms that the EU intends  to fully comply with current air quality  standards by 2020 and set further  pollution reduction targets up to  2030. 

The package introduces three main  components:

  1. A clean air programme for Europe  with measure to ensure current  targets are met;
  2. A National Emission Ceilings  Directive which would impose  stricter national emission ceilings  for six pollutants;
  3. A proposal for new draft directive  aimed at cutting pollution from  medium sized combustion  installations such as power plants.

The proposals will need to be  approved by the European  Parliament and Member States  before they can be adopted. This  could take up to three years, but as  the Italian Government has said it is  keen to make this a priority when it  takes over the presidency of the  European Council in the latter half of  2014 the proposals could be  adopted by the end of the year.

According to the European  Commission, air pollution is the main  environmental cause of death in the  EU and has a significant effect on our  health and the economy. 

Draft Directive on medium  sized combustion plants 

A recent European Commission  proposal published a draft Directive  with aims to cut sulphur dioxide  (SOx), nitrogen oxides (NOx)  particulate emissions from  installations with rated thermal inputs  between 1 and 50 megawatts,  classed as medium size combustion  plants. This threshold will apply to  energy plants installed for street  blocks or large buildings and small  industry installations.

The proposal forms part of the EU’s  air quality package released on 18  December 2013. If adopted, this  Directive would supplant the  Industrial Emissions Directive which  entered into force in February 2013,  and extend the Integrated Pollution  Prevention Control regime beyond  large combustion plants. 

Unlike for large combustion plants  which are regulated by the  environmental permitting regime, the  draft Directive introduces a simple  registration scheme and monitoring  requirements for medium-sized  combustion plants. During  registration, operators would need to  provide information listed in Annex I,  such as the type and share of fuels  used, number of expected operating  hours and the start date of operation.  Annex II of the draft instrument also  sets stringent emission limit values  for new combustion plants, which  would take effect at the start of their  operation. Existing plants however  will have until 2025 to prepare for  compliance.     

To ensure that compliance is  achievable, the level of NOx pollution  limit has been set to require  combustion-related modifications  instead of end-of-pipe abatement  equipment, which would have had  greater cost implications for plant  operators. Exemptions are also  allowed for plants that only operate  for less than 500 hours annually with  lower particulate limits. 

It is anticipated that the proposal will  not be finalised until 2016. However,  operators should continue watching  this document and anticipate that  the new emission limit values might  impact the design and construction  of new combustion plants currently  in the pipeline.  

Aggregates levy  exemptions – suspended?

The 2013 Autumn Statement has  confirmed that the UK government  will suspend the exemptions,  exclusions and reliefs from the  aggregates levy in the next financial  year while the European Commission  continues investigating the State aid  issue. The government has  published draft legislation to  implement the suspension following  the announcement. This means that  certain materials currently excluded  will become taxable from 1 April  2014.  

The aggregates levy was introduced  in 2001 to provide an incentive to  industry to use recycled material and  reduce waste by taxing commercial  exploitation of rock, sand and gravel,  previously at a rate of £2 per tonne in  2013. Certain aggregates have been  exempt from the levy, which include:  clay, coal, lignite, shale and slate,  spoil from industrial processes.  These materials will become subject  to tax later this year. Material that is  mainly the spoil, waste or other  by-product of any industrial  combustion process or the smelting  or refining of metal will also be  covered by the levy. 

While companies currently exempt  from paying the levy will have to  budget for higher operating costs,  this measure is heavily supported by  the British Aggregates Association  who argue the levy was anticompetitive to the quarry industry as  a whole. At the same time, HMRC  has promised in a policy paper dated  19 December 2013, that repayments  will be made to businesses affected  by the suspension following  conclusion of the Commission’s  investigation, should the terms be  allowed by the Commission. 

Meanwhile, businesses should  prepare to register for the levy and  keep financial records updated for  future evidence to claim repayment.  HMRC has confirmed it will need to  be satisfied that any repayment for  the suspension should not unjustly  enrich taxpayers.