IPPC is driving resource efficiency, says DEFRA

Integrated pollution prevention and control (IPPC) is driving resource efficiency and spreading the use of environmental management systems, a study for the Environment Department (DEFRA) claims.1

The study examines the impact of the pollution prevention and control (PPC) regulations, which were introduced in England, Wales and Scotland in 2000 to implement the IPPC Directive. Northern Ireland followed suit in 2003.

It is based on questionnaires sent to 1,368 UK sites that had received permits by August 2005. The response rate was 12%.

The research found evidence of improved resource efficiency and waste minimisation, with operators saving an average of £31,000 per site in resource costs, with the range varying widely from £1,000-£340,000.

IPPC has also increased the number of sites with environmental management systems, with 42% of improvement conditions in permits issued by the Environment Agency requiring their introduction. Many permits also included improvement conditions relating to emissions, effluent discharges and monitoring.

The paper, coating and textile sectors were given the most improvement conditions, indicating they had the most to do to meet IPPC standards. Many sites in these sectors were not regulated under the previous integrated pollution control (IPC) regime.

  • Costs: The total cumulative cost of IPPC to UK operators had reached £770 million by 2005, and is expected to reach £820 million by 2011. However, the data is skewed by a small number of operators with high costs. Removing these reduces the figures to £170 million and £200 million, respectively.

    The costs of making a PPC application, including staff time and consultants, averaged around £50,000 per site. They varied widely depending on the complexity of the application, with half of respondents estimating their costs to be £30,000 or less.

    Application fees paid to the regulator averaged £15,000 per site, with average annual subsistence fees of £8,400. By 2005/06, the environment agencies had received £40 million in fees.

    Estimates of one-off compliance costs from improvements required by IPPC also varied considerably. The average was £32,000, but one major upgrade drove the average to £350,000. The most significant cost was capital investment, followed by monitoring, reporting and management time. The study put the average annual ongoing costs of regulation at £43,000 per site.

    The IPPC Directive requires operators to use best available techniques (BAT) to control pollution. But few operators provided details of the costs of achieving BAT standards. Of those that did, around half said BAT requires changes to the design and operation of their installation.

    The average annualised capital expenditure on design changes was £7,086, while the average annual cost of operational changes was £10,000.

    Over half of respondents said BAT has required an increase in monitoring and reporting.

    BAT is an evolving concept needing regular review to keep pace with technological advances. But only half of respondents said they planned to reassess BAT regularly - underlining the importance of regulators requiring such work in improvement programmes.

    There was a general perception, especially among smaller firms, that the cost of IPPC was a competitive disadvantage. Operators were sceptical that other member states would apply IPPC as rigorously as the UK. However, little evidence was provided to support these views.

    Larger firms were more positive, especially about improved access to markets. IPPC has also benefited companies in the environmental services industry.

    Commenting on the report, David Morgan, head of regulatory affairs at the Confederation of Paper Industries, said the cost of preparing an application for a paper mill was twice the study’s estimate - some £100,000 - while Kevin Considine, UK Steel policy adviser, said the costs were "considerable". But both expressed support for IPPC and urged the European Commission to make greater effort to ensure the Directive is applied consistently across the EU (ENDS Report 387, pp 53-54 ).

  • Benefits: The benefits proved much more difficult to quantify. The study says there were "extreme difficulties" in disentangling the effects of IPPC from the previous IPC regime and other EU legislation such as the waste incineration Directive.

    The questionnaire asked operators to estimate annual mass releases of key air pollutants before and after receiving the permit. But few answered the question, and the researchers fell back on the agencies’ pollutant release inventories.

    A major drawback is that the inventories do not include releases from sites prior to their falling under IPPC. Another is that they do not take account of changes in production.

    The inventories show that emissions of five pollutants, including oxides of nitrogen and sulphur, particles and volatile organic compounds, fell by almost 8% over a five-year period from 1998-2002.

    However, the study says the result is not clearly attributable to IPPC and is line with general trends. Focusing on IPPC’s impact on emissions in a few specific sectors would probably prove more informative.

    Martin Bigg, Environment Agency head of industry regulation, said significant cuts in emissions at sites previously regulated under IPC were never expected. Most gains will be made in sectors new to IPPC, such as food and drink.

    A further study is planned after IPPC is fully implemented in October 2007.

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