DEFRA and Agency spring to the defence of IPPC

The integrated pollution prevention and control (IPPC) regime is a good example of modern, risk-based regulation that stimulates innovation, according to a report by the Environment Department (DEFRA) and the Environment Agency. The report aims to shape the Department of Trade and Industry’s review of the role of regulation in stimulating innovation and cleaner technology.

Last December’s pre-Budget report confirmed the strength of the deregulatory climate in Whitehall. It contained a range of initiatives to cut the burden of regulation (ENDS Report 359, pp 32-35 ).

In March, the Government announced plans to set up a powerful Better Regulation Executive, based at the Cabinet Office, to drive forward reform (ENDS Report 362, p 4 ).

Meanwhile, the DTI’s innovation strategy, launched in January 2004, has been studying how environmental regulation can be designed and implemented to secure objectives in a way that promotes innovation and business opportunities (ENDS Report 348, p 37 ).

A DTI-led research project, with input from DEFRA and the Agency, has been looking at three policy areas: IPPC, vehicle emission standards and the impact of television design. In April, the DTI organised a seminar to discuss the project’s findings.

DTI Minister Lord Sainsbury told delegates that the UK’s commitment to better regulation was shared by the European Commission. Commenting on a Commission communication on better regulation, published in March, he said: "There is now solid political support in Europe for a vigorous better regulation programme."

Feeding into the study, DEFRA has produced a report examining the relationship between IPPC and innovation in pollution control. The paper is supported by case studies, produced by the Agency, which provide practical examples of how IPPC has encouraged regulated companies to innovate.

Introducing the work, Agency PPC policy advisor Tim James was keen to emphasise his organisation’s credentials as a modern regulator. Quoting the recent Hampton report on modernising regulation, Mr James said the Agency is a "high-performing national regulator". The report praised the Agency’s operator and pollution risk appraisal scheme as an example of best practice, he said.

Mr James said that, in contrast to the Confederation of British Industry’s view that IPPC was a barrier to innovation, IPPC helped companies put innovation into practice through an outcome-focused, site-specific approach to regulation.

DEFRA’s report - a draft summary of which was presented to the meeting - says that IPPC requires operators to use the "best available techniques" to control releases. BAT does not prescribe the use of specific techniques, but focuses on outcomes - the "hallmark of modern regulation".

European guidance on the best available techniques - the so-called BREF documents - supports the regime by reviewing a range of techniques for each sector and recommending which are BAT. These may include innovative techniques as well as those which are tried and tested.

The Agency submitted a small number of case studies on the positive effect of IPPC on innovation.

One example is Anglesey Aluminium near Holyhead. In the past, the operator monitored emissions of hydrogen fluoride manually, but this was of limited value in controlling the process to minimise emissions. As a result of IPPC, the company developed an innovative continuous monitoring system which allowed it to improve process control and cut emissions of the pollutant by 56%.

The Agency also highlighted the case of Arjo Wiggins’ paper mill in Stowford. As a result of IPPC, the company was under pressure to reduce emissions of wastewater from its dying process. The batch production of specialist coloured paper created a significant volume of waste cleaning water. The company developed an innovative production process in which dye is added to the paper-making process at a later stage, resulting in much less waste.

DEFRA recognises that IPPC is not specifically designed to drive innovation. It is first and foremost a regime for environmental protection. IPPC is most effective at encouraging the diffusion of existing innovative technology rather than stimulating its development - so-called "market pull" rather than "technology push".

Both DEFRA and the Agency recognise the challenges of implementing IPPC. While the Agency is keen to help operators’ innovative solutions, in reality this takes a great deal of time and resources. Both of these are in short supply given the workload of issuing permits for thousands of sites.

One important barrier to innovation, perhaps not recognised by better regulation experts in Government, is the desire among some companies to avoid making improvements so as to minimise costs.

Some operators have failed to submit an adequate BAT assessment in an attempt to test the Agency’s resolve. Given the Agency’s permitting workload, there is a risk that the drive to improve operator performance may be blunted (ENDS Report 321, pp 23-25 ).

Companies in the environmental technology and services sector are concerned at their lack of access to the BREF process, which may mean they are missing opportunities to market innovative techniques (ENDS Report 355, p 13 ).

John Cockaday, from the DTI’s innovation group, said that the main output from the studies would be a "think innovation" guide for all Government officials due in six months’ time.

The guide would include recommendations for "innovation-friendly" policy making. For instance, policies should be designed to reduce risks to innovators while increasing the risks to non-innovators. An example is voluntary labelling schemes on product performance, Mr Cockaday said.

The project on the impact of television design (see next article ) highlighted how some new technologies are threatening a massive increase in energy consumption. Policy-makers must consider the most appropriate time to intervene to encourage improvements in product performance, the DTI believes.

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