Long-running challenge over cement kilns burning waste comes to an end

The saga over the legality of permitting cement kilns to burn waste seems to have run its course in the UK courts after the House of Lords dismissed challenges to a permit granted to Rugby Cement. Although superficially this was a victory for the Environment Agency, some of the legal arguments raised by the applicants found favour with the Lords and remain open. Had the factual background to the case been different, the result might not have been the same.

In 2001 the operators of Rugby Cement’s Rugby site had applied the Agency for a permit under the Pollution Prevention and Control Regulations 2000 to allow it to burn shredded tyres as a replacement for some of the coal and petroleum coke used as a fuel. The application raised local controversy and, as the Agency noted in its decision document, "few determinations have been subjected to such intense scrutiny and debate".

The first core legal issue raised in R (on the application of Edwards and another) v Environment Agency and others (House of Lords 24 April 2008 [2008] UKHL 22) was whether the proposed change in fuel meant the application was for a project subject to the requirements of the EC environmental impact assessment (EIA) Directive 85/337. The change did not require planning permission under British law, which would have brought into play the British regulations on environmental assessment, but the claimants argued this was not relevant as a matter of European interpretation.

They argued that the proposal fell within one of the categories listed in the Directive, either a waste disposal installation for the incineration of non-hazardous waste with a capacity exceeding 100 tonnes a day (subject to compulsory assessment under the Directive) or an installation for the disposal of waste (subject to discretionary assessment).

Lord Hoffman, who gave the lead judgment, doubted whether this was the case. He noted that the first half definition of a ‘project’ under the Directive referred to the execution of construction works or other installations of schemes, and this "appears to contemplate the creation of something new and not merely a change in the way existing works are operated".

The second half of the definition referred to "other interventions in the natural surroundings including those involving the extraction of natural resources". But he felt this concept cannot be "easily applied to the changing of a fuel in an existing installation".

Lord Hoffman noted that one of the discretionary classes of projects was a change or extension to an existing Annex I or Annex II project "which may have significant adverse effects on the environment". But the High Court had already found as a matter of fact that the change in fuel type would not have any such adverse effect and so this category did not come into play.

But he accepted, as did his colleagues, that the European Court of Justice (ECJ) had consistently given a broad interpretation to the Directive’s scope and purpose, and he was not confident the European Court would come to the same view. As such, the point of law was not acte clair (clear and free from doubt), and if the issue had been needed for the case’s determination, a reference to the ECJ would have had to be made.

However, he felt the information supplied with the pollution prevention and control (PPC) permit application satisfied the EIA Directive’s requirements. This included information on the nature, quantities and sources of foreseeable emissions and a description of any foreseeable significant effects on the environment.

In the 2000 Berkeley case (ENDS Report 307, pp 46-47 ), the House of Lords quashed a planning permission which had not been formally subjected to environmental assessment, but Lord Hoffman distinguished the case because the alleged environmental statement had to be pieced together from several sources. In contrast, in this case, "The application itself, emanating from the applicant as the EIA Directive requires, was perfectly adequate."

Lord Mance also agreed that the information supplied had satisfied the Directive’s requirements, but he was more certain that had the point been relevant, the proposal would have fallen within Annex I of the Directive. It was clear from some of the project categories listed in the Directive that they did not involve construction works as such, and the change of fuel did involve "not inconsiderable physical adaptation of the company’s site and plant".

But the equating of the information requirements under the EIA Directive and the PPC application requirements is not perfect. The Directive, for example, obliges the applicant to provide information on the main alternatives studied by the developer and the main reasons for his choice, taking into account the environmental effects. The PPC application provisions do not require this.

The second main legal issue raised concerned the duty of the Environment Agency to consult on further information arising during the application process. This related not to emissions from fuel burning in the main stack but to the escape of dust and particulate matter from low-level point sources in the plant arising from the general operation of the cement works. Although this had not been an issue at the start of the proceedings, it had assumed much greater importance during its course.

Lord Hoffman noted that the basic structure of the Pollution and Prevention Control Regulations, reflecting the 1996 EC Directive on integrated pollution prevention and control (IPPC), was two-fold. Emission limits had to be placed to reflect all appropriate pollution prevention measures in particular through the application of best available techniques (BAT). But even if BAT were applied, there was an additional requirement that "no significant pollution" was caused. This was defined in the regulations as pollution that caused a breach of an environmental quality standard defined in European Community legislation.

In this context, the relevant environmental quality standards were contained in Directives made under the 1996 air quality Directive. As Lord Hoffman explained, the purpose was to provide an upper ceiling of air quality, otherwise excessive pollution might be caused by the cumulative impact of several plants, each applying BAT to their process.

In its original application the applicant had described various sources of low-level point sources on the site, and proposed using fabric filters to trap and collect the dust from these sources. This was accepted as BAT. But the claimants argued that the Agency had not properly consulted on whether, despite the application of BAT to these sources, there would still be "significant pollution" in that the relevant EC environmental quality standard on small particles (PM10) might be breached.

The application had contained modelling information commissioned from consultants on the predicted emissions from the main stack which had concluded that the contribution of fine particulate matter would be insignificant. But no information had been provided on the possible impact of the contribution of emissions from the low-level point sources.

In view of the contentious nature of the application, the Agency decided to commission an assessment on this issue from its own in-house air-quality modelling assessment unit. The final report produced predicted that due to the existing high background concentrations of PM10, the emissions from low-level point sources would result in a breach of the relevant environmental quality standard if all the sources were emitting at their limit values at the same time. As Lord Hoffman put it, "In other words, there was already so much dust in the air in Rugby that, on certain assumptions fed into the model, the addition of PM10 from the plant appeared likely to breach the EQS."

The Agency considered there were considerable uncertainties with the modelling exercise, which had been based on the worst-case scenarios. In its view, the relevant environmental quality standards might not be exceeded in reality, and made its decision accordingly.

The complainants did not argue that the Agency had acted unreasonably in law in granting the permit. What was an issue was whether the Agency had a legal duty to make public its internal reports from the air-quality modelling assessment unit to allow the public an opportunity to make representations in the light of the information.

Lord Hoffman first noted that under the IPPC Directive, the duty to provide information to the public applied only to new installations or substantial changes to existing installations. Neither of these conditions applied in this case, and any case based on the Directive must therefore fail.

However, the transposing regulations, the Pollution Prevention and Control Regulations 2000 made no distinction between new and existing installations. Under the regulations, the Agency had to maintain a public register containing the particulars of the applications itself, but this did not help since the Agency’s own air quality assessment was not part of the application. But the regulations gave power to the Agency to require the applicant by way of notice to provide further information needed to determine the application, and in such cases both the notice and information supplied in response must also be placed on the register.

In this case, no formal notice had been issued in relation to emissions from the low-level point sources. There had, though, been some informal correspondence with the applicant during the preparation of the Agency’s air assessment study.

The applicants argued that the Agency was not entitled to seek significant information by informal means rather than a notice since this would be a means of avoiding the requirement to place the information received in the public register.

Lord Hoffman doubted whether the information the company gave the Agency was significant, and the Agency had prepared its study on the basis of the low-level point sources fully described in the application. But in any event, Lord Hoffman did not consider the regulations implied a requirement to exclude informal communication between the applicant and the Agency.

"In a complicated application, one would expect Agency officials to have discussions with the applicant about matters of concern. It would be extremely inhibiting if the Agency ran the risk that its decision would be vitiated because the applicant was held to have communicated some item of information which might to have been subject of a formal inquiry."

Lords Hope and Walker agreed with this analysis, but Lords Brown and Mance were less convinced. Lord Mance argued that if there was no obligation to publish information obtained informally from the applicant, "it would create a remarkable lacuna in the intended regulatory scheme".

It did not follow that any further information had always to be obtained by formal notice. In his view, the requirement to publish the "particulars of the application" in the register should be interpreted not just to include particulars in the application itself, but also any information subsequently obtained informally from the applicant.

Even if the Directive and national Regulations did not require disclosure of the Agency’s air-modelling exercise, the question remained of whether the Agency was still under a common law duty to disclose it as a matter of fairness. Both the High Court (ENDS Report 364, pp 46-47 ) and the Court of Appeal (ENDS Report 378, pp 53-54 ) had held that they were under such a duty, but that in the circumstances the failure to disclose was not sufficient to justify quashing the decision.

The Agency had not challenged this interpretation of the common law duty of fairness, though Lord Hoffman doubted whether it should impose extra duties to disclose internal documents. He said: "When the whole question of public involvement has been considered and dealt with in detail by the legislature, I do not think it is for the courts to impose a broader duty."

But the issued remained about whether the courts below had been right to refuse to quash the permit, despite their finding of a procedural irregularity in the Agency not disclosing its air assessment reports. The grant or refusal of the remedy sought in judicial review is always ultimately a matter of judicial discretion.

In several cases in the 1990s concerning failure to comply with environmental assessment requirements, the British Courts had refused to quash a planning permission on the grounds that an environmental assessment would have made no difference to the outcome. But in the 2000 Berkeley case, the House of Lords took a tougher approach and warned that, certainly where a failure to comply with EC law was involved, the courts should be reluctant not to quash the relevant decision.

But in the present case, Lord Hoffman warned that Berkeley was a case where no environmental assessment had been carried out and it should be considered in its context. Here, in contrast, one was dealing with domestic law and the failure to produce information.

Furthermore, since the decision the actual emissions had been monitored, and reports from both the company and the local authority indicated that the PM10 air quality values had not been exceeded as a result of the operations.

It followed, according to Lord Hoffman, that the relevance of the Agency-commissioned reports had been overtaken by events: "We no longer need to rely upon predictions. We know what has actually happened." He considered that in those circumstances the courts below had been justified in not quashing the permit.

The issue as to whether a change in fuel type can bring a project within the EIA Directive, and the extent to which the information requirements under the IPPC Directive and national implementing regulations meet the Directive’s requirements may yet reach the ECJ.

The European Commission has been considering whether to bring infringement proceedings against the UK on this point. Whether the Commission will now be convinced by the House of Lords decision to drop any action remains to be seen.

Richard Macrory is professor of environmental law, University College London