Life at the sharp end: chemicals firms grapple with IPPC

Preparing for the integrated pollution prevention and control (IPPC) regime has been a major undertaking for environmental managers, consultants and regulators across the UK. The organic chemicals sector presented a particular challenge because of its size and complexity. In this feature, ENDS looks at the applications and permits from three organic chemicals companies on Teesside and talks to the environmental managers who dealt with the challenge.

If headlines are anything to go by, only one environmental issue is preoccupying the chemicals industry - the debate over the European Commission's proposed REACH programme on chemicals testing. The industry's concerns over the potential impact of the EU emissions trading scheme might come in a distant second.

On the ground, however, the main workload for environmental managers in the sector has been the need to apply for IPPC permits.

By August last year, 162 companies in the organic chemicals sector in England and Wales had applied for a IPPC permit. Fifty or so have now received a permit. Most applications, covering existing installations, arrived in two tranches in 2003. The rest of the chemicals sector - covering inorganic chemicals, pharmaceuticals and agrochemicals - will follow over the next two years.

Applying IPPC to the large and highly complex organic chemicals sector is perhaps the most critical test in the implementation of the new regime.

The Environment Agency - which was already struggling with a backlog of applications from other sectors - has attempted to smooth the process by introducing centralised permitting groups in an attempt to reduce the backlog (ENDS Report 342, pp 9-10 ). It has also changed its policy on site condition reports to reduce the amount of intrusive investigation required (ENDS Report 344, pp 44-45 ).

In order to get a snapshot of progress in implementing IPPC, ENDS visited the Agency's public register in York which covers the North East of England. We homed in on applications and permits for three chemicals manufacturers on Teesside, and talked to the managers who produced them, in order to give a flavour of what IPPC has meant to the industry (see box ).

Climbing the paper mountain
Visiting the public register brings home just how much paperwork has been generated by IPPC. Many applications, complete with site condition reports, are five inches thick or more.

An application requires an operator to give detailed consideration to every aspect of a site's environmental impact, and to assess whether it is using the best available techniques (BAT) to control it.

Most companies started work on the application a year before the submission deadline. As Seal Sands Chemicals' regulatory systems manager Mike Sandford said: "If you look at the amount of time and effort spent on making an application then it is clear that IPPC has been the number one environmental management issue."

The scale of the task and the lack of guidance came as a shock to many environmental managers. Oxford Chemicals' Vince McNeilly said "the alarm bells started ringing during a presentation from the Agency at a seminar in 2001...We were told that the Agency wanted a concise and informed application, not a wheelbarrow-load of paper, but there was no guidance to help us."

Guidance for the sector was published in late September 2002, just three months before the first application window opened. The Agency's electronic application template was also too late to be of much use. The IPPC Bureau, which produces EU-wide guidance on BAT, has also suffered from delays. Even now, it has only issued guidance for large volume organic processes, and nothing on speciality chemicals.

"Nothing was done on time", Mr McNeilly complained. "Everything always arrived at the eleventh hour."

The costs have also been significant - and not without controversy. The application fee alone for Seal Sands was almost £72,000. Mr Sandford explained that the Agency had charged the company according to the 13 chargeable components it operated under IPC, rather than its new risk-based EP OPRA methodology which was not in place at that time. Seal Sands has since calculated that its fee would have been almost halved under EP OPRA - although other companies are likely to have been losers from the change.

In common with a growing number of companies, Seal Sands used consultants to help write its application. Mr Sandford puts the total cost at some £200,000, and says that the application took an estimated 2,000 hours to write.

Huntsman Petrochemicals' environmental manager John Galbraith told ENDS that the company wrote its own application using in-house technical experts. However, it used consultants for the site report and air dispersion modelling. The application for Huntsman's olefins installation cost some £123,000 and took six man-months to write.

Oxford Chemicals, which runs the least complex of the three sites, spent £70,000 on its application, which was prepared in conjunction with consultants Posford Haskoning. Even so, it required a substantial amount of input from company staff. "On the positive side, if it wasn't for our inspector, we would have floundered a lot more...He had a really positive input," Mr McNeilly said.

Seal Sands' application was determined by an inspector in a centralised permitting group who had no prior knowledge of the site. Many in industry have expressed concern that this new approach may lead to a lack of understanding and inappropriate permit conditions. Mr Sandford invited the inspector to visit the site, in an attempt to cut down on misunderstandings and obvious questions about the operation.

Taking it to the next level
On the face of it, IPPC should be a more transparent and rigorous system than the previous IPC regime.

Seal Sands' Mike Sandford said: "The requirement to use the source, pathway, receptor model [for assessing environmental impacts] is the main difference. Under IPC, we had to describe the process and its controls... IPPC is far more rigorous."

In a shift from practice under IPC, the Agency now expects operators to refer to indicative BAT performance levels and its "H1" BAT assessment methodology. The idea is to give operators benchmarks against which they should assess the performance of the plant - moving away from the rather nebulous concept of "best available techniques not entailing excessive cost" under IPC.

Mr Sandford argues that IPPC is a better tool for protecting the environment, because it offers a more holistic approach and brings "technically connected" processes together under a single permit. This more rounded approach has allowed companies to prune the number of authorisations, often quite drastically. Under IPC, Seal Sands and Oxford held five and two authorisations, respectively - both companies now hold single site-wide IPPC permits which in theory should allow more coherent environmental management.

Another positive aspect for speciality chemicals manufacturers is the provision for a multi-product protocol under an IPPC permit. This is aimed at companies such as Oxford and Seal Sands which produce batches of product to order, often at short notice, and need to carry out a range of different types of chemistry. Companies can now register the types of chemistry they expect to carry out, provided they can demonstrate that they have appropriate controls in place. Under IPC, operators often had to apply for numerous minor variations for each change.

IPPC also requires operators to address issues which were left out of the IPC system. These include an assessment of contamination of the site and a protection plan to ensure that it does not deteriorate, as well as consideration of energy use, resource consumption and odour and noise impacts.

The most controversial, and onerous, new requirement has been the site report. "Most of the debate we've had with the Agency has been over our site report," Mr Sandford said.

At first, the Agency expected companies to draw a clear "line in the sand", normally using intrusive sampling to determine the state of the site. Any contamination that was subsequently revealed under IPPC could trigger stringent clean-up requirements. However, last summer the Agency changed its policy - partly to speed up the permitting process - and companies can now submit sampling data after the permit has been issued.

"The change in policy left us caught between two stools," explained Mike Sandford. Like others in the sector, Seal Sands had already submitted sampling results when the Agency changed its policy. The company found some contamination from toluene under part of the site, but says that this is historic and does not represent an ongoing problem.

Many chemicals companies are now having to put together a site protection and monitoring plan (SPMP). The Agency introduced SPMPs last summer, in a bid to establish a consistent method of preventing deterioration of the land at a site. Seal Sands found that considerable work was needed to reformat information it already held into the form required in the Agency's SPMP template.

Playing a straight bat on BAT
Despite the increased robustness of the new regime, many operators in sectors already under IPPC such as steel, cement and paper have failed adequately to assess whether the installation meets BAT standards. Some companies are reluctant to address areas where performance is poor because of the potential cost of improvements, particularly in economically hard pressed sectors such as steel (ENDS Report 321, pp 23-25 ).

The concern is that history may be repeating itself. Ten years ago, regulators implementing IPC were often forced to issue a permit on the basis of inadequate applications and pursue additional information through improvement conditions (ENDS Report 227 pp 3-4 ).

An Agency spokesman told ENDS that a number of chemicals firms had not submitted adequate BAT assessments, while some operators have submitted applications which are little more than a defence of existing practice. Typically, he said, an operator will argue that because it was regulated under IPC they must already be using BAT.

An environmental manager in one chemical company confirmed this view: "The Agency doesn't have the resources to challenge companies which submit an application which is not quite right."

Examination of the public register at York suggests that inspectors are making relatively little use of the power to request further information under schedule 4 of the PPC regulations. The picture was difficult to assess, because the Agency appears to have adopted a policy of not placing schedule 4 notices - or indeed other substantive correspondence between the inspector and the company - on its public files.

It may be that inspectors are asking companies for more information informally, through site visits, phone calls or e-mail. However, another explanation could be that inspectors are preoccupied with turning round applications as fast as possible - and are not pushing operators for further information or testing their BAT cases.

One key question is whether the chemicals sector has the cash to pay for a significant programme of investment in BAT. David Thomas from Oxford Economic Forecasting told a Chemical Industries Association conference in January that the UK industry is emerging from an economic slowdown and is set to experience growth of 3.5% into 2005. However, he warned that profits are likely to be invested in new capacity in developing markets rather than at home. This suggests that the Agency may struggle to persuade many chemical manufacturers to make new cash available for environmental improvement programmes.

Key pollution control issues
The three companies' improvement programmes reveal different pollution control priorities for each operator. The key issues raised were trailed last year in the Agency's draft sector plan for the industry (ENDS Report 333, pp 22-25 ).

The major issue for Huntsman is fugitive emissions of VOCs, in particular the carcinogens 1,3-butadiene and benzene. According to the Agency's Pollution Inventory, the company's olefins facility - which dates back to the 1970s - emitted 145 tonnes of butadiene in 2001, falling to 87 tonnes in 2002. The level of benzene released to air and water increased slightly to 47 tonnes over the same period.

Huntsman has made some effort to address whether its pollution control techniques constitute BAT. However, arguably it skates over the issue where its current performance is less convincing. On fugitive emissions, for example, Huntsman gives the impression that the issue is already well under control as a result of existing improvements. It accepts that upgrades are necessary, such as replacing valves and pumps with low-leakage appliances, and says that a programme is under way but gives no details on the timescale.

The Agency responded by setting Huntsman 25 items in its improvement programme, eight of which require upgrades to reduce fugitive emissions of butadiene and benzene. Another condition requires the firm to upgrade its benzene storage tanks - a potentially costly exercise.

Huntsman's John Galbraith said that the company has already made significant reductions in fugitive emissions. He refused to be drawn on how it would approach making further reductions under IPPC.

Seal Sands appears to have taken the most thorough approach towards assessing BAT. The company lists all the indicative BAT requirements and states clearly whether it complies or not, and offers a list of proposed actions with timescales.

Seal Sands received five improvement conditions in its permit. On fugitive emissions, the firm has to put in place a leak detection and repair programme. It has also been asked to look at alternatives to its stirred-tank reactors. The requirement is controversial because the technology is the mainstay of the speciality chemicals sector. However, the Agency is convinced that alternative techniques may be more efficient. For example, speciality chemicals company Thomas Swan has pioneered the use of supercritical fluids for batch processing (ENDS Report 330, p 15 ).

Mike Sandford argues that "no company is going to throw away all that equipment because a BAT assessment suggests there will be marginal benefits." Seal Sands has more than 15 stirred-tank reactors. Replacing one unit, together with the associated abatement equipment, would cost up to £500,000. Mr Sandford thought it unlikely that any other technology would be suitable for his site at a reasonable cost - and argues that improvement condition is part of a long term plan to ensure that companies are aware of other techniques when they plan major refits or new-build plant.

Oxford's application says very little indeed about BAT, although this may be because the site appears to have a lower potential impact than the other two. The main environmental issue facing the site is odour.

The site manufactures aroma chemicals such as mercaptans, which can be smelt at levels of parts per billion. Mr McNeilly said that Oxford had received only a "couple of complaints".

Five of the six conditions in Oxford's improvement plan relate to odour. The firm must implement an odour management plan as specified in dedicated guidance on the subject (ENDS Report 333, pp 41-42 ). Part of this will involve monitoring to address the lack of data on odorous emissions in the application. Oxford must also assess whether activities which pose a risk of odour problems should be abated using an existing biofilter system.

Vince McNeilly said that Oxford already has formal procedures in place to manage odour, but that the IPPC permit requires them to be brought into line with the guidance. He was concerned about the potential cost of improved odour monitoring equipment capable of detecting minute concentrations. "The human nose is still the best form of detection," he added.

Driving for cleaner technologies?
Of course, ENDS' visit to the public register gives only a snapshot of what IPPC means for three chemicals firms selected more or less at random. Even so, it is worth asking whether the new system, which has required significant effort from both regulators and regulated, is making a significant difference to industry's performance.

On evidence to date, it is not clear that IPPC is offering much more than a continuation of IPC, albeit with a new impetus for improvement driven by the application process. Permit improvement programmes suggest that the Agency is pushing operators in certain priority areas - but there is concern that pressure to get permits out of the door means that inspectors are less able to hold operators to account or to push for cleaner technologies.

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