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:
- A clean air programme for Europe with measure to ensure current targets are met;
- A National Emission Ceilings Directive which would impose stricter national emission ceilings for six pollutants;
- 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.