The price of natural gas has soared in recent months, catching out businesses accustomed to low prices. Gas normally costs 30-40 pence per therm, but soared to a high of £1.70 in November. The price has settled back to around £1/therm, but the increase has hit manufacturing companies hard. Some are also concerned about potential interruptions to their gas supplies if supply tightens over the winter.
Over the past 15 years, gas has become the fuel of choice in industrial boilers partly for economic reasons, but also because it because it releases much less sulphur dioxide (SO2) and particulate matter than traditional fuels such coal or oil. As a result many integrated pollution prevention and control (IPPC) permits require operators to use gas, subject to contractual interruptions to supply.
Martin Bigg, the Agency's head of industry regulation, denied the regulator had come under pressure from industry to allow firms to switch fuel. However, he confirmed that concern over gas prices had been raised in meetings with trade associations.
Nevertheless, the Agency has introduced a centralised procedure to fast-track applications from companies wanting to switch to using oil, bypassing the normal variation procedure under the IPPC regime.
The Agency is asking companies to submit a proposal for switching fuels, outlining the financial benefits to the company and the impact on local air quality.
"Where a proposal shows there will be no significant impact, the Agency is likely to agree," Dr Bigg says. "I don't believe it's in anyone's interest to delay the decision... The Agency needs to be proportionate in its response."
Instead of granting a formal variation to an operator's permit - which could require formal consultation with statutory consultees and the public - the Agency is issuing an "enforcement position letter" saying it will not enforce the permit's conditions regarding fuel use. The exemptions will last all winter, until 1 April.
The Agency has already granted 12 companies permission to switch from gas to oil. The number is set to rise as the Agency has received a further 17 enquires.
In a statement, the Scottish Environment Protection Agency confirmed that it also had adopted a similar policy. SEPA has approved two applications and expects more to follow, but told ENDS it was unable to name sites without first notifying the firms involved.
The Agency is adamant that local air quality standards will not be breached as a result of the change. But a shift to oil will result in a increase in emissions of SO2, particulate matter and carbon dioxide.
The issue raises questions over the Agency's interpretation of the "best available techniques" (BAT). Historically, the regulator has largely ducked the question of fuel choice in power stations and other combustion processes, largely because it has been able to rely on market trends. However, the Agency is allowing companies to use a more polluting technique - for now, temporarily - to save money. According to the Agency, the switch from gas to oil is saving one company some £75,000 per month.
Dr Bigg disagreed that BAT is being eroded. He said decisions were based on assessment of costs and benefits and "there would not be a significant local impact".
Some companies operate combustion plants that cannot burn oil. For instance, Ineos Chlor is having to hire three small oil-fired boilers to supply 35MW - 10% of the site's demand. Other companies may have scrapped stand-by plant capable of running on oil.
The Paper Federation's David Gillett said that paper mills had been hit "very considerably" by the rise in gas prices. He said one firm had been forced to suspend production temporarily and that a sustained period of high prices could put some firms out of business.