E nvironmental legislation in Europe- is it a barrier to the Circular Economy? PRESENTATION

1. Environmental legislation in Europe- is it a barrier to the Circular Economy?PRESENTATION Dr Anne-Gaelle Collot Acting Director Environment & Sustainability , Chemical Industries association, UK Make it Work conference, 10 December 2015, Edinburgh

2. The Chemical Industries Association • The CIA is the organisation that represents chemical and pharmaceutical businesses throughout the UK. • Our activities are split between lobbying and provision of advice and services. Our policy agenda stretches across the economy and competitiveness; our products and the way we work; health, safety & environment and employment issues. • We represent all sizes of chemical and pharmaceutical businesses, of which approximately 70% are overseas headquartered. Adherence to Responsible Care principles for manufacturing and product stewardship during transportation and use along the value chain is a condition of membership.

3. The Chemical Industries Association • We lobby and campaign at the UK and EU level on issues of importance to the industry to ensure that it operates safely, profitably and with due care for the interests of future generations. • Under the Chemistry Growth Partnership which is a joint industry/Government initiative, being led by industry for industry, the UK chemical industry pledged to increase its Gross Value Added contribution to the UK economy by 50%, from £195 billion to £300 billion by 2030. • Secure and competitive energy and feedstock, accelerated innovation, strengthening supply chains and practical & fit for purpose legislation will be critical in realising this vision.

4. Environment legislation • Picture of an installation

5. Manufacturing sites: What is environmental legislation? National Emissions ceilings Directive EU ETS Environmental Impact Assessment Directive Biodiversity Strategy Air quality directives REACH Medium Combustion Plants CLP Environmental permit (IED) Water Framework Directive Waste Framework Directive Groundwater Directive Water EQS Directive Soil Strategy Natura 2000 National contaminated soil regime Environmental Liability Directive

6. The Industrial Emissions Directive • The Industrial Emissions directive was adopted in 2010 & had to be transposed into national legislation by 7 January 2013. • Its main objective is about minimising pollution from various industrial sources throughout the European Union. • All our manufacturing sites in the UK are covered by the IED • Like the Former IPPC directive the IED is based on several principles, namely: • (1) an integrated approach, • (2) best available techniques (BAT), • (3) flexibility, • (4) public participation • (5) inspections

7. IED principles- the Integrated approach The integrated approach • The purpose of the Directive is to ensure a high level of protection of the environment taken as a whole. • Permits must take into account the whole environmental performance of the plant (e.g. emissions to air, water and land, generation of waste, use of raw materials, energy efficiency, noise, prevention of accidents, and restoration of the site upon closure.

8. What are the issues for the chemical industry? • The Chemical sector is complex and diverse and has the greatest number of BREFs (i.e. 8) of any sector that falls under the scope of the IED with 22 out of a total of 33 BREFs which cover either directly or indirectly the chemical sector. • The EU Commission has recently proposed the development of a new chemical BREF on waste gas (the Was Gas for chemicals BREF)

9. The UK experience of IED implementation • Environment is devolved in the UK therefore each administration (i.e. Scotland, Wales, Northern Ireland and England) can choose how to implement the IED • the objective is to achieve some consistency however in the implementation of: • the assessment of environmental impact and risk- H1 guidelines • the BREF documents- e.g. how do the BATAELs get translated into permit Emission limit Values • The Derogation procedure

10. What are we doing in the UK? • We are working closely with the UK authorities and the CIA and a selection of our members are members of the UK delegations on the BREF Technical Working Groups (TWG) • We agree with the UK authorities on a UK position on the BREFs and we ensure that dialogue is established with our European colleagues and other Member States • We organise joint events for industry and the UK authorities • We meet our European Counterparts. We have recently proposed and gained support for a common position on IED implementation and the BREFs with 7 Business Ministries and 7 national chemical trade associations/federations (i.e. the Group of 7 + 7)

11. What’s wrong with the BREFs? • The BREF process is currently resource intensive, lengthy and is experiencing delays. • The IPPC Bureau’s decision-making lacks transparency and does not clarify the methodology used for the derivation of the legally binding BATAELs from the data that has been collected • The cost of implementation of the BREF documents is not adequately considered during their development at present even though it is expected to be very significant for the European chemical industry. Many installations will have to apply for a time limited derogation, which may or may not be granted. • Some of the chemicals BREFs do not fit with the UK risk-based approach to environmental permitting

12. What’s wrong with the BREF- a concrete example e.g. The Common Waster Water (CWW) BREF • Adopted last week after ~ 8 years of review • 2nd BREF to be adopted out of 9 chemicals BREFs • Covers both large combined waste water treatment operations and the treatment of single waste water streams. • It contains conflicting requirements: • BATAELs* are based on concentration • BAT 7 requires that measures are in place to reduce water use • BAT 7. In order to reduce the usage of water and the generation of waste water, BAT is to reduce the volume and/or load of waste water streams, to enhance the reuse of waste water within the production process and/or to recover and reuse raw materials. *BATAELS: Best Available Technique Associated Emission Levels

13. What is needed? • The IPPC Bureau should adopt a more focused approach when developing the BREF documents. The BREFS should only focus on a number of key environmental issues based on an environmental impact assessment of the associated emissions and avoid overlap with other BREFs. • This will simplify the BREF process while ensuring that any significant sources of environmental pollution are tackled as a matter of priority and deadlines are met. • The IPPC Bureau should use a well-designed and transparent procedure to derive BAT-AEL ranges. The option for a ‘second draft’ should remain open. • This will avoid unachievable BAT-AEL ranges being set and therefore reduce the number of derogations sought. • The BREF process should seekto ‘Competitiveness proof’ BAT conclusions to minimise the impact on the European Chemical industry while addressing legitimate environmental concerns. • It should include a systematic impact assessment of the proposed BAT conclusions when the first draft (D1) is released.

14. The Circular Economy and Resource efficiency

15. Energy efficiency and environment legislation There are a significant number of regulations on energy efficiency which cut across both environment and energy legislation: For example for the design of a new boiler, the following has to be considered: • The energy efficiency BAT in the Large Combustion (LCP) BREF • Energy Efficiency Directive (Article 14) • Energy efficiency BREF • As well as the permit for GHG emissions under the EU emissions trading scheme (EU ETS) which is currently under review and under which the European Commission is proposing a cap on free emissions allowances to be reduced faster than we can abate • Some of them may well be inconsistent but this is the complexity and excessive bureaucracy which would need to be reviewed • To make ‘better regulation’ there is a need to be aware of overlaps both within a topic area and with other topic areas e.g. in the UK, the Business Energy Efficiency tax review only looked at energy/carbon reporting overlaps under DECC and not with EA/DEFRA as well.

16. The waste legislation • We support the concept of a Circular Economy as proposed. It is good business practice to use resources efficiently by minimizing waste and optimizing product reuse. • But in practice, there is often uncertainty on the legal status of the substance or object to be used as a resource and this is in conflict with resource efficiency and environmental improvement. • Setting targets for industrial waste would be impractical and would be in conflict with the IED and the BREFs • Incineration and landfilling can be sustainable options for some industrial wastes • The rules for the cross-border shipments of waste need to be simplified

17. Can we achieve the Circular economy? • Can we achieve the circular economy with the current environment legislation? • Permitting and environment? • Environment and Energy efficiency? • Waste Framework Directive? • Risk versus hazard? Thank you for your attention