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Annex B: Partial Regulatory Impact Assessment: Implementing the E-PRTR Regulation and a UK-PRTR

1.0 Title of proposal

1.1 This Partial Regulatory Impact Assessment ( RIA) evaluates options for implementing the European Pollutant Release and Transfer Register ( E-PRTR) Regulation, and establishing a UK-Pollutant Release and Transfer Register ( UK-PRTR) that complies with the UN-ECE Protocol on Pollutant Release and Transfer Registers (the PRTR Protocol).

2.0 Purpose and intended effect

2.1 Since 2001, the European Commission has collected data on mass emissions from all Integrated Pollution Prevention and Control ( IPPC) Directive installations, and published a collation and analysis of the data in the form of the European Pollutant Emission Register ( EPER) ¹⁶. The purpose is to provide information for the public and regulators, and to have data for assessing compliance with EU and international obligations.

2.2 Under this system, the UK provided the necessary emissions data through the pollution inventories for England and Wales, Scotland, Northern Ireland, and DTI regulated offshore installations, as well as estimations made by Defra on behalf of local authority regulated IPPC installations in England and Wales.

2.3 For the reporting year 2007 onwards, the EPER is replaced by the E-PRTR Regulation, and with this transition comes a number of new reporting requirements. Most notably, data is required for a number of new industry sectors that fall outside the scope of the UK's existing pollution inventories.

2.4 At the same time, as a signatory state to the PRTR Protocol, the UK is required to establish a national PRTR, as opposed to the separate inventories that currently exist across the UK.

2.5 This Partial RIA considers the costs and benefits of the different options for extending the UK's PRTR capabilities in these ways.

2.6 In considering these options, policy decisions will be made in a way that is consistent with the principles of better regulation - proportionality, accountability, consistency, transparency and targeting. The decisions will also seek to ensure that the resultant policy looks to minimise any burdens on business, both in terms of administrative and compliance costs.

3.0 Background

Objectives of PRTRs

3.1 Pollutant Release and Transfer Registers ( PRTRs) are publicly accessible compilations of data that describe the releases and/or transfers of substances to the environment. They have three primary aims:

• to provide the public with easy access to information about pollution from industrial sources both in their local area and nationally;
• to help environmental regulators protect the environment by providing information to aid policy development and monitor the effectiveness of policies; and
• to help the Government meet its national and international commitments and obligations for reporting of pollutant releases, e.g. the UNECE Convention on Long-range Transboundary Air Pollution, and the United Nations Framework Convention on Climate Change.

PRTRs in the UK

3.2 The Environment Agency for England and Wales created its on-line Pollution Inventory ( PI) of annual emissions of pollutants emitted from industrial activities, in 1998. The Scottish Environment Protection Agency ( SEPA) established a similar inventory in 2004 called the Scottish Pollutant Release Inventory ( SPRI). In Northern Ireland, the Environment and Heritage Service ( NIEHS) operates a Pollution Inventory reporting system, though access is only available to the public on request via its paper based public register. The Department of Trade and Industry ( DTI) also collects emissions data for offshore oil/gas installations through the offshore Environmental Emissions Monitoring System ( EEMS), though there is no provision for direct public access.

3.3 In this Partial Regulatory Impact Assessment, unless specifically mentioned, these various UK reporting systems will be referred to as the ' UK inventories.' The Environment Agency, SEPA and the NIEHS will collectively be referred to as 'the UK environment agencies.'

European and international obligations

3.4 The UK inventories have provided much of the information for the UK's submissions to the EPER - a PRTR that operates at the level of the European Union ¹⁷. Under the EPER, Member States produced a report every three years ¹⁸ on the emissions of industrial activities regulated under IPPC into air and water. The European Commission made the data publicly available via its website ¹⁹.

3.5 The development of the EPER was taken further when the European Community and its Member States (with the exception of Malta and Slovakia) signed the PRTR Protocol (to the Aarhus Convention) in May 2003. The obligations of the PRTR Protocol extend beyond those of EPER in a number of ways, including:

• more activities are required to report data;
• there are more substances on which to report;
• operators are required to report releases to land and off-site waste transfers;
• the PRTR must include releases from diffuse sources;
• data must be reported on an annual basis; and
• signatory states are required to establish a publicly accessible national PRTR.

3.6 It is common practice for European Community law to be brought in line with the provisions of an international agreement, such as the PRTR Protocol, before that agreement is ratified by the European Community and its Members States. To enable this, the EPER has been replaced by the E-PRTR Regulation, which entered into force on 24 February 2006. There are, however, some elements of the PRTR Protocol that the E-PRTR Regulation does not address, including the need to establish a publicly accessible national PRTR. The first reporting year for the E-PRTR is 2007 - this refers to the year in which releases and waste transfers occur.

Implementing the E-PRTR Regulation and PRTR Protocol

3.7 The UK's existing pollution inventories take us a significant way towards implementing the E-PRTR Regulation and PRTR Protocol. There are, however, several E-PRTR sectors that fall outside their scope:

• activities in England and Wales regulated by local authorities as "Part A(2) activities ²⁰" under the Pollution Prevention and Control ( PPC) (England and Wales) Regulations 2000;
• the following activities, if not regulated as Part A(1) activities in England and Wales and Part A activities in Northern Ireland, under their respective PPC Regulations:

(a) coal rolling mills (with a capacity exceeding 1 tonne per hour);

(b) industrial plants for preservation of wood and wood products with chemicals with a production capacity exceeding 50 m ³ per day;

(c) installations for the building of, and painting, or removal of paint from ships, with a capacity for ships longer than 100 m;

• in Northern Ireland, municipal waste-water treatment plants (with a capacity exceeding 100,000 population equivalents);
• independently operated waste-water treatment plants serving one or more activities in Annex I of the E-PRTR Regulation (with a capacity exceeding 10,000 m ³ per day) ²¹;
• underground mining and related operations;
• opencast mining and quarrying (where the surface of the area being mined equals or exceeds 25 hectares); and
• intensive aquaculture (with a production capacity exceeding 1,000 tonnes of fish and shellfish per year).

3.8 Another key implementation gap concerns the requirement placed on the UK by the PRTR Protocol to present PRTR Protocol/ E-PRTR data on a UK-PRTR that is accessible to the public via electronic means. The Environment Agency's Pollution Inventory and SEPA's SPRI deliver this objective in part, but we do not have comparable systems in place for those E-PRTR processes regulated by local authorities in England and Wales, the NIEHS or the DTI.

Rationale for government intervention

3.9 The provision of reliable, timely, and accurate information is a key role for government where such information would not be provided by the market. In the case of environmental information, the provision of information by the market alone would be unlikely to be efficient for a number of reasons including some incentive for business to under-report the emissions or transfers of pollutants. Where information was provided it might also be patchy, inconsistent, or delayed.

3.10 The rationale for government to move to electronic provision of information exists on both efficiency and equity grounds. Providing information electronically is more efficient in a number of ways than providing the information in a paper form. The first reason is that it is likely to reduce dissemination costs as electronic information can generally be provided at zero or negligible marginal cost (discounting any database development/maintenance costs).

3.11 Moving to electronic provision may also provide equity benefits, as information may be made available to a wider audience. Access to the internet is increasing at a rapid pace with 57% ²² of households having access to the internet at home and many more having access through public libraries, others' homes, their place of work or internet cafes.

4.0 Consultation

Within government

4.1 Representatives of other Government Departments and the Devolved Administrations of Wales, Scotland and Northern Ireland, and their regulatory agencies, have been appropriately involved in and consulted on proposals to implement the E-PRTR Regulation and the PRTR Protocol.

Public consultation

4.2 Public consultations on proposals to implement the E-PRTR Regulation and the PRTR Protocol are being initiated - two consultations are being undertaken, one for Scotland and another for the rest of the UK - and this Partial Regulatory Impact Assessment forms part of those consultations.

5.0 Options

5.1 In considering the implementation of E-PRTR for the new sectors and the establishment of a UK-PRTR, the following options have been considered ²³:

Option 1: do nothing

5.2 Under this option, the current pollution inventory systems would continue to be used across the UK.

Option 2: integrated UK-PRTR

5.3 Under option 2, one UK-wide PRTR would be established. This would present and allow users to interrogate, at a minimum, the same data package that is required to be submitted to the European Commission by the E-PRTR Regulation.

5.4 This option assumes that E-PRTR data would be collected for the new sectors by the relevant competent authorities.

Option 3: single portal linking to relevant PRTR inventories

5.5 Under option 3, three new publicly accessible web-enabled PRTRs would be established for (1) local authority regulated E-PRTR activities in England and Wales; (2) NIEHS/district councils regulated activities in Northern Ireland; and (3) DTI regulated offshore oil and gas installations ( i.e. making the EEMS publicly accessible). A portal website would also be established to link the various UK inventories.

5.6 This option assumes that E-PRTR data would be collected for the new sectors by the relevant competent authorities.

6.0 Costs and benefits

6.1 In assessing the costs and benefits of the options for implementing the E-PRTR Regulation and the PRTR Protocol, impacts on the following individuals and groups have been considered:

• consumers accessing additional information;
• industries affected by the new reporting requirements; and
• the public sector in its compilation and dissemination of emissions information.

Costs

Option 1: do nothing

6.2 In the event that the UK is found to have failed to submit the necessary E-PRTR data to the European Commission, the matter may be brought before the European Court of Justice. This could lead to infraction proceedings against the UK. The penalties for non-compliance would depend upon the seriousness and duration of the failure, but could include a 'lump sum' payment (minimum £8 million and up to perhaps £55 million) and, with a continued failure to comply, 'penalty payments' of around £3 million - £200 million per annum thereafter, following a second European Court of Justice judgment.

6.3 Also, having played a key role in establishing the principles of PRTR, both in EU and international fora, it would be damaging to the UK's reputation for it to be seen not to comply with the E-PRTR Regulation and the PRTR Protocol.

Option 2: integrated UK-PRTR

6.4 It is estimated that this option would impose a set up cost on the public sector of between £103k - £189k, with annual operating costs of between £20k - £34k. It is also expected to impose an annual cost of between £77k - £98k on the private businesses that provide the information.

6.5 Concerning the public sector, it is estimated that establishing a UK-PRTR web-enabled database would cost approximately £40k - £60k, with ongoing maintenance costs of between £5k - £10k per annum.

6.6 In respect of local authority regulated activities in England and Wales, Defra would incur the following approximate costs: £7k for the development of an electronic reporting form and a system to compile completed reporting forms; £4k for reporting guidance (estimated at 2 weeks of a higher executive officer's time); and £6k per annum for the administration of the reporting system, including chasing up late returns from local authorities and compiling the annual E-PRTR return for local authority regulated activities (estimated at four weeks per annum for an administrative officer ²⁴).

6.7 It is estimated that it would cost the Environment Agency, SEPA and the NIEHS approximately £12k - £34k (each) to bring the new E-PRTR sectors within the scope of their existing reporting systems. This would include tasks such as identifying the new activities, updating reporting forms, and developing reporting guidance (the cost range is dependent on the extent of reporting guidance produced for the new sectors).

6.8 The Environment Agency, SEPA and the NIEHS would also cover the ongoing costs for administering reporting for the new sectors, including chasing data returns, quality assessing the data, and compiling E-PRTR data returns for submission to the European Commission and the UK-PRTR (for both existing and new E-PRTR sectors) - estimated at approximately £3k - £6k (each) per annum.

6.9 The cost to DTI for making EEMS data accessible for meeting the reporting obligations of all domestic and international legislation ( e.g.EU/ OSPAR (the Convention for the Protection of the Marine Environment of the North-East Atlantic)) is £65k (which is in addition to other developmental aspects). It is estimated that approximately 25% of this cost ( i.e. £16k) would be attributable to the initial interfacing of the EEMS data base with the UK-PRTR.

6.10 Concerning the private sector, the operators of the new E-PRTR activities would incur the cost of processing and quality assessing the required data. It is estimated that it would on average take an operator four hours to complete the required reporting form each year. This equates to a cost of around £58 per annum per operator ²⁵. Therefore, across the estimated 600 to 800 additional activities, this would equate to a cost on business of £35k - £46k per annum. However, it is recognised that these cost estimates could change as a result of responses to this consultation.

6.11 The annual maintenance/reporting costs relating to the E-PRTR/ UK-PRTR reporting elements of EEMS could be expected to be in the region of £5k - £6k. Accordingly, DTI will need to review and adjust (accordingly) the annual fees charged to operators for the maintenance of the EEMS database, in order to reflect new developments relating to E-PRTR/ UK-PRTR reporting.

6.12 As regards local authority regulated activities in England and Wales, it is thought that the role of local authorities in chasing the completion of the E-PRTR reporting, checking the completed form, and sending it to Defra/ WAG, might amount to, on average, two hour's work per installation. At 2007/8 rates used in relation to the Local Authority Pollution Prevention and Control/Local Authority Integrated Pollution Prevention and Control charging schemes, this would amount to a charge of £92 per operator. On the assumption that approximately 400 to 500 activities will report E-PRTR data to local authorities, this would mean a total cost of approximately £37k - £46k.

6.13 This cost would be highlighted in the relevant annual charging scheme consultation. Charges will not be levied for E-PRTR related administrative duties undertaken in 2007/2008.

Option 3: single portal linking to relevant PRTR inventories

6.14 This option has been estimated to impose a set up cost on the public sector of between £111k - £192k, with annual operating costs of between £26k - £46k. It is also expected to impose an annual cost of between £77k - £98k on the private businesses that provide the information.

6.15 Concerning the public sector, it is thought that a new reporting system to compile and make data publicly accessible via the internet for local authority regulated facilities in England would cost approximately £30k - £40k, with ongoing maintenance/operating costs of approximately £5k - £10k. As under option 2, reporting guidance for local authority regulated facilities would be developed at an approximate cost of £4k (estimated at 2 weeks of a higher executive officer's time). The administration of the reporting system, including chasing up late returns and compiling the annual E-PRTR return for local authority regulated activities, would cost approximately £6k per annum (estimated at four weeks per annum for an administrative officer ²⁶).

6.16 The cost of providing a publicly accessible web-enabled database for NIEHS regulated PRTR activities, is estimated at approximately £15k - £20k, with an annual operating/maintenance cost of £5k - £10k.

6.17 The cost to DTI of providing a publicly accessible EEMS database for UK-PRTR purposes could reasonably be expected to be on par with those outlined in paragraphs 6.9 under option 2.

6.18 The cost of setting up a centralised web-portal, linking the various inventories and including some contextual information, is estimated to be approximately £10k, with an annual maintenance cost of £1k - £2k.

6.19 As under option 2, it is estimated that it would cost the Environment Agency, SEPA and the NIEHS approximately £12k - £34k (each) to bring the new E-PRTR sectors within the scope of their existing reporting systems. This would include tasks such as identifying the new activities, updating reporting forms, and developing reporting guidance (the cost range is dependent on the extent of reporting guidance produced for the new sectors).

6.20 The Environment Agency, SEPA and the NIEHS would also cover the ongoing costs for administering reporting for the new E-PRTR sectors, including chasing data returns, quality assessing the data, and compiling E-PRTR data returns for submission to the European Commission and the UK-PRTR (for both existing and new E-PRTR sectors) - estimated at approximately £3k - £6k (each) per annum.

6.21 The costs to the private sector would be as under option 2.

Benefits

Option 1: do nothing

6.23 This option provides no additional benefits.

Option 2: integrated UK-PRTR

6.24 The key benefits of establishing an integrated UK-PRTR lie in relation to (1) the provision of emissions and transfer data for the new E-PRTR sectors; (2) improved public accessibility for E-PRTR data in Northern Ireland; and (3) the ability to access emissions and transfer data for the UK as a whole from one publicly web-enabled database.

6.25 The integrated UK-PRTR will enable local residents and other interested members of the public to monitor emissions and transfer data for the new E-PRTR sectors. The level of benefits for each activity will vary with its location and the type of emissions. An illustrative range of £120 - £240 per annum is suggested per E-PRTR activity based on residents having a nominal value for these benefits of 12p per annum ²⁷ and the site being located so as to affect only a small village with a resident population of between 1,000 and 2,000 people. This equates to a total annual benefit of between £72k - £192k per annum across the estimated 600 to 800 additional activities.

6.26 Government will also benefit from this additional information through a more comprehensive evidence base on which to develop and monitor environmental policies. It is not, however, possible to value these benefits until the new data has been collected and any related policies have been defined.

6.27 Concerning Northern Ireland, local residents/members of the public will be able to access annual emissions and transfer data for all the E-PRTR activities via the internet, rather than having to do so through the existing paper based system. This will likely result in significant time savings on the part of the users.

6.28 Significant time savings will also result for those users who want to access and interrogate data for the whole of the UK. The integrated UK-PRTR will enable them to do this from one web-site as opposed to visiting the different domestic inventories.

Option 3: single portal linking to relevant PRTR inventories

6.29 The benefits for option 3 would be the same as those for option 2, with the exception that the data would not be drawn together in one database. Any analysis could not therefore be undertaken so easily across the different domestic pollution inventories. It has not been possible to quantify the differential impact this would have on the benefits of option 3, but they are unlikely to be substantial. As a result, it has been assumed that this option provides the same benefits as option 2.

7.0 Small Firms Impact Test

7.1 The proposals set out in this partial RIA will have minimal impact on business since they will only generate an additional cost for the comparatively small number of new industries that will be required to report under the E-PRTR Regulation, but that do not currently report to the existing UK inventories. Reporting for these industries will, however, be achieved in the least cost manner. We would, therefore, expect no disproportionate impact on small business.

8.0 Competition assessment

8.1 As these proposals will be implemented evenly across market participants, they are unlikely to raise significant competition concerns. In accordance with RIA guidance, each of the options was considered against the competition impact filter, which showed that an in-depth competition impact assessment was not required.

9.0 Enforcement, sanctions and monitoring

9.1 The Environment Agency, the NIEHS, and local authorities in England and Wales will enforce the E-PRTR reporting requirements for the new sectors through information notices served under the provisions of their respective PPC Regulations. These Regulations make the compilation of an inventory of releases, including waste transfers, a function of the regulatory agency, including local authorities by transfer of the regulatory agency's powers, whether an activity is regulated under the PPC Regulations or not. Failure to comply with any such notice will amount to an offence. Penalties for non-compliance will be determined in accordance with the provisions of the PPC Regulations.

9.2 The use of information notices as an enforcement mechanism may be subject to review in the future.

9.3 It is DTI's intention to use the provisions of existing offshore legislation (such as the Offshore IPPC Regulations) to enforce on operators of installations >50 MWth the additional E-PRTR reporting requirements, and to enable the imposition of penalties for any infringements. DTI will continue to work closely with Oil & Gas UK/the offshore industry on this issue to assist compliance by eligible operators.

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