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Proposals for Amendments to the Waste Management Licensing Regulations: A Consultation Paper

ANNEX B

DRAFT PARTIAL REGULATORY IMPACT ASSESSMENT

Introduction

The Executive is reviewing a number of exemptions to the waste management licensing system. This follows on from the consultation on the land spreading exemptions (contained in paragraphs 7, 9, and 19 of Schedule 3 of Waste Management Licensing Regulations 1994, issued at the end of 2002). Regulations based on responses received from that consultation are now in force.

This document provides a Partial Regulatory Impact Assessment (RIA) for each exemption under review. It discusses several policy options for each exemption and aims to outline the risks, costs and benefits for each proposal. In some cases, quantification of the costs and benefits has not been possible due to their intangible nature. Each exemption has its own RIA, which can be read independently of the others.

The Executive is also consulting on new mobile plant prescriptions as part of the review of exemptions. An RIA for the mobile plant proposal has not however been produced. As the proposal is an extension to the existing mobile plant that can be licensed, and has no direct costs/ benefits on industry.

Legal basis for the legislative review

The legal basis on which the review is founded is the same for all of the exemptions under review. The amendments will be covered by statutory instrument entitled ‘The Waste Management Licensing Amendment(Scotland)(No2) Regulations 2003.

Domestic legislation on waste stems from the Waste Framework Directive (WFD)¹. This has been transposed into UK law mainly through the Environmental Protection Act 1990 and the Waste Management Licensing Regulations 1994.

The principal objective of the WFD is to ensure that waste management activities do not cause harm to the environment or human health. The relevant objectives are set out in Article 4 which states that:

‘Member states shall take the necessary measures to ensure that waste is recovered or disposed of without endangering human health and without using processes or methods which could harm the environment, and in particular:

• without risk to water, air, soil, plants and animals;
• without causing a nuisance through noise or odours; and
• without adversely affecting the countryside or places of special interest’.

Articles 9 and 10 of the WFD state that any establishment or undertaking that carries out waste disposal or recovery operations must obtain a permit from the competent authority. The competent authority for Scotland is the Scottish Environment Protection Agency (SEPA).

Under domestic legislation, permits (waste management licenses or Pollution Prevention & Control permits) may be granted for a specific period, they are renewable, and contain conditions and obligations that the operator must meet. There is, for example, a requirement for any operator to demonstrate that they are ‘Fit and Proper’ for the purpose of managing the facilities. This includes a requirement for the operators to show that they are technically competent, lack relevant convictions and can provide adequate financial provision to cover the requirements of the licence.

Article 11 of the WFD states that establishments or undertakings carrying out waste recovery or disposal of their own waste at the place of production may be exempted from the permit requirements imposed by Articles 9 and 10. However, Article 11 states that exemptions may apply only:

• if the competent authorities have adopted general rules for each type of activity laying down the types and quantities of waste and the conditions under which the activity in question may be exempted from the permit requirements, and
• if the types and quantities of waste and the methods of disposal or recovery are such that the conditions imposed in Article 4 are complied with.

Furthermore, the establishment or undertaking must be registered with the competent authority, and Member States shall inform the Commission of the general rules adopted pursuant to the activities exempt from licensing.

Regulation 17 of the Waste Management Licensing Regulations 1994 uses Scottish Ministers’ powers under Section 33(3) of the Environment Protection Act 1990 to prescribe specific exemptions from control by waste management licensing. Regulation 18 of the Waste Management Licensing Regulations 1994 implements the Directive’s requirement for registration by the competent authority

The Executive’s review is therefore being conducted to ensure that the conditions and requirements imposed by Articles 4 and 11 of the WFD are met.

COMPOSTING

Title of Proposed Measure

Amendments to the waste licensing exemption (paragraph 12) regarding the small scale composting of biodegradable waste.

Issue

The National Waste Plan² sets an increase in the amount of organic waste, which is composted as one of the Executive’s key objectives. Over the next few years, composting will have a significant contribution to make in ensuring compliance with the Landfill Directive and its targets for the reduction of biodegradable municipal waste which is currently landfilled. Composting can benefit the environment by returning organic matter to the soil and aiding plant growth.

Composting does however have the potential to cause environmental pollution, harm to human health and nuisance through odours, leachate and potentially harmful bioaerosols, if the activity is not controlled properly.

The current exemption for composting as detailed in Paragraph 12 of Schedule 3 of the Waste Management Licensing Regulations 1994, restricts the composting activity to the place where the waste is produced, or where the compost is to be used (commonly known as the import/export restriction). However, if covered by a full waste management licence composting schemes may take waste from various sources, compost it, and then supply the resultant compost to a number of users. But, the costs involved in this route are considered very onerous for small-scale undertakings.

It is important to note that householders wishing to compost their own waste material for use in their garden do not need to be registered with SEPA.

Objective

To encourage community composting through the provision of an exemption which covers all general composting activities, regardless of the initial source of waste and the final destination of the compost (removal of the current export/import restriction). This must be achieved while ensuring continued protection of the environment and human health.

The proposals include a new requirement on operators to pay a fee to SEPA for the registration of the exemptions. The fee will only apply to operators composting more than 10 tonnes of waste per annum, and will not be imposed on those who are composting wholly or mainly agricultural waste. The fee will cover SEPA’s costs of inspection and analysis of information provided in the notification to them. This will enable SEPA to regulate the exempt sites more effectively and is in line with the general policy of charging operators on a cost recovery basis.

Risk Assessment

Unregulated composting poses potential risks to human health and the environment. Airborne micro-organisms (including bacteria and fungi) can be released. Vermin can be attracted to sites where litter is allowed to collect and disease can be carried by gulls and flies attracted to the sites.

Removing the current import/ export ban will help to reach the targets of reducing the amount of biodegradable municipal waste that is sent for disposal to landfill.

OPTIONS

Option 1

Do nothing and continue to rely on the current exemption, which covers composting at the place where the waste is produced or is to be used. This will mean that sites, which currently require a licence, will continue to do so.

Option 2

Provide a revised composting exemption with amended general rules that allow waste material to be transported to another location where it is composted and then to allow the resulting composted material to be transported to a third location for use. SEPA advise that an exemption may safely allow for this, as long as appropriate conditions are applied.

This revised exemption also aims to deal with a number of other issues. These include the need to provide temporary storage of waste prior to composting; allowing for the chipping, shredding and cutting of the waste; and providing for the screening of the waste.

Issues of Equity and Fairness

There are no issues of equity and fairness with the proposed approach. All composting facilities registered under the exemption will be subject to the same requirements, except for facilities composting less than 10 tonnes of waste per year, which will not be subject to fees or require to provide detailed information on registration. This reflects the lower level of risk these facilities present and the fewer inspections required of them by SEPA.

Benefits

Option 1

Operators of composting activities that currently use an intermediate location for the composting activity should hold a waste management licence. The level of scrutiny and site monitoring offered by waste management licences would ensure protection of the environment and human health, and compliance with the WFD. This is achieved through the application of specific conditions relating to the activity, and the requirement to pass the fit and proper person’s test. However, it is unlikely that small-scale community composting operators would apply for a licence for such operations as the requirements to obtain one are considered to be too onerous. Therefore, the requirement for a waste management licence will deter such composting activities, or encourage evasion of the regulations.

Option 2

There are several benefits resulting from providing a revised exemption:

• The exemption will encourage community-composting schemes, which might otherwise be prevented by the costs, and requirements involved in the waste management licence procedures. Increased composting will help to reduce pressure on landfills and increase waste recovery.

• The exemption will help to ensure protection of the environment and human health through:

Providing varying quantity limits of material allowed to be composted and specifying the composting methods to be used. We propose 4 different limits according to the risks associated with differing composting methods.

Requiring information on registration of the exemption including details of the composting site and surrounding area, the types and quantities of waste and method of composting. This provides SEPA with the information needed to ensure the activities will comply with the terms of the exemption and that they will not harm the environment or health. Sites composting less than 10 tonnes of waste per year would be exempt from this requirement.

• The exemption will provide clear guidance as to what materials can be composted in the exemption. Clear and transparent regulations will further encourage composting activities.

• Allowing the ‘all-round’ composting activity to be exempt will further encourage recovery. The revised exemption will allow for the chipping, shredding, cutting and pulverising of waste where it is part of the composting process, and for the screening of the waste. The exemption will also allow for the waste to be temporarily stored at a site before it is taken to the place where it will be composted.

Comments are invited on these proposed benefits.

Costs for Business, Charities and Other Organisations

It is difficult to be certain over how many sites are likely to be affected by the proposed exemption measures. Our best indication is from the number of sites that currently apply to SEPA for full licences. This suggests that 19 sites will be affected. However, it is likely that this figure is an underestimate. It is also expected that the number of sites that will be affected (both licensed and exempt activities) will increase, partly due to the Landfill Directive which imposes targets for the diversion of certain waste from landfill.

Option 1

It is assumed that the 19 sites presently importing waste to be composted will continue to require a full waste management licence to operate (and pay an annual subsistence charge) Significant costs are incurred in preparing an application for a waste management licence. These include for example obtaining planning permission (where required) and conducting pollution risk assessments. However, as the sites already hold a licence they will not have to incur the costs of the initial application fee, which includes the aforementioned licence preparation costs. Furthermore, once the activity has ceased, the operator must pay SEPA a surrender fee (£1,180) to cover their costs of issuing a certificate of completion and of inspection.

The ongoing costs for sites maintaining a waste management licence for composting activities are shown in the table below. All costs are presented in present values, and a 3.5% discount rate has been applied.

Table — Total Costs For Operators Over A 10 Year Period

We would welcome views and further estimates of the costs involved to be included in the full RIA.

Each operator will also need to demonstrate they are ‘Fit and Proper’ persons including provision of Technically Competent Management and financial guarantees sufficient to discharge the obligations of the licence. Both of these will increase costs further. However, the costs of financial provision vary significantly between sites and so an estimate has not been provided.

Other Costs

For any additional operators requiring a licence, the process for obtaining a waste management licence is a long one. It takes a minimum of 2 months for SEPA to process an application due to the statutory consultation requirements. This time commitment could, in itself, act as a disincentive to composting.

Option 2

It is difficult to estimate accurately how many sites will be exempt, but for the purposes of this paper we will assume 19 sites are affected and that a third of sites will compost less than 10 tonnes of waste per year. This will mean that 6 sites will not come under this exemption. The notification fee will be higher in year 1 than in subsequent years. This reflects the lower regulatory effort required to analyse the data received with the notification, when most of the information should be the same or very similar. Sites that compost less than 10 tonnes of waste per year will be exempt from fees and from having to provide detailed information to SEPA. Those sites composting wholly or mainly agricultural waste will also be exempt from charging. The table below provides the costs for option 2, for a 10 year project.

Table — Total Costs of A 10 Year Composting Project

Views are welcomed on these figures, in particular the costs and length of time taken to bring together the required information for both options.

Consultation with Small Business

The Executive would welcome further comment from all interested parties on these measures.

Recommendation

Composting has an important role to play in diverting waste from landfill, but the activities need to be properly controlled. We recognise that it is appropriate to exempt community composting activities from the requirements of licensing which, if applied, would be a major disincentive to the activity. We recommend option 2 as the most appropriate and cost effective measure.

Enforcement, Sanctions, Monitoring and Review

SEPA administers and enforces the waste management regime, including exemptions. SEPA will be required to undertake an initial and subsequent annual inspection of the site to check compliance with the exemption. They will issue internal guidelines and train staff to facilitate the implementation and enforcement. The Executive, in conjunction with SEPA, will keep under review the effectiveness of the regulation.

Dunnage

Title of Proposed Measure

To provide an exemption from Waste Management Licensing for the burning of dunnage at a dock.

Issue of Objective

On occasions, wooden packaging material (dunnage) from the import of plants and plant products is designated by the Forestry Commission for destruction at the port under the Plant Health Order 1993, to prevent the introduction of pests and diseases into the country.

Due to the threat of introducing such pests and diseases, some of which can travel considerable distances in order to find new territory, the only practicable and effective method of destruction is to have the suspect material burnt as close as possible to the dockside.

The current practice entails burning arrangements at various locations and circumstances at docks. The proposal will provide a more appropriate level of control through an exemption for the burning of such material, ensuring the activity is carried out in accordance with the WFD.

The proposals include a new requirement on operators to pay a fee to SEPA for the registration of the exemptions. The fee will cover SEPA’s costs of inspection and analysis of information provided in the notification to them. This will enable SEPA to regulate the exempt sites more effectively and is in line with the general policy of charging operators on a cost recovery basis.

Risk Assessment

The burning of waste materials in an uncontrolled manner has potential to cause pollution of the environment or harm to human health, and create nuisance from smoke and odours.

In theory, dunnage could be required to be burnt at any of the points of entry to the country, but the Forestry Commission consider that the actual number will be relatively small.

OPTIONS

Option 1

Do nothing. Continue with burning at various locations and circumstances at docksides.

Option 2

Introduce a voluntary scheme. The Port Authorities could set up a voluntary scheme to control these activities.

Option 3

Provide an exemption from waste management licensing. The Port Authorities will be allowed to burn dunnage provided they meet some general rules as detailed in the secondary legislation.

Option 4

Full waste management licensing requirements.

Issues of Equity and Fairness

Options 1 and 2 provide no guarantee that any one port will control the burning. It could be argued that local people are placed at a disadvantage through suffering nuisance and odours. Furthermore, as option 2 represents a voluntary agreement, those who join the scheme may be subject to higher costs (e.g. through the provision of burning facilities than those who decide not to join the scheme).

Options 3 and 4 provide no issues of equity and fairness as all port authorities would be subject to the same requirements and would have to provide similar facilities where they are required to burn dunnage.

Comments are invited on these. Details are particularly welcome on any issues that may have been omitted.

Benefits

Option 1

This option will have no benefits in reducing the burden of nuisance and pollution, and public complaint. However, there will be no requirement on the Port Authorities to spend any capital on providing facilities for burning

Option 2

If the scheme is adhered to, it is likely to reduce the burden of nuisance or pollution on local residents. However, it is unlikely to provide the level of security as present under options 3 and 4, as it is unlikely that all ports would partake fully in the scheme (although the level of uptake cannot be estimated). Indeed the lower the uptake, the higher the level of actual and potential nuisance and pollution on local residents. Such a scheme may be more responsive to changing circumstances and impose lower administration costs than a regulatory option.

Option 3

The exemption will reduce the risks associated with uncontrolled burning of dunnage by introducing common standards of environmental control at relatively low cost. It will meet the requirements of European Community and national law for the prevention of pollution and harm to health.

Option 4

The requirement for a waste management licence will significantly reduce the risks associated with uncontrolled burning of dunnage by the use of purposed built and authorised incinerators. These facilities will also meet the requirements of EC and national law for the prevention of pollution and harm to health.

Costs for Business, Charities and Other Organisations

The proposed measures will principally affect Port Authorities who are required to burn dunnage. It is estimated that 19 ports of entry in Scotland will require the on-site destruction by burning of dunnage. It is anticipated that the Forestry Commission would carry out their inspection duties as is currently the case, no matter which option is applied and the proposals will not impact upon the Plant Health (Forestry) (Great Britain) Order 1993.

Option 1

There would be no additional costs with this option.

Option 2

Some additional costs would arise for those setting up and taking part in the voluntary scheme, but given the uncertainties about up-take and what the scheme would look like, these costs cannot be quantified. A voluntary agreement would not be supported by the Executive or SEPA as burning such material without a permit or exemption from licensing is an unlawful activity.

Option 3

Notification Costs

It is estimated that ports will continue to operate under an exemption on a semi permanent basis.

It is estimated that SEPA might charge around £400 for the initial notification of the exemption. This would cover all burning activities for a year after which re-notification would be required. The re-notification charge would be lower, potentially at around £340 per annum per site. This lower charge reflects the reduced regulatory effort required to assess similar information year on year.

Capital & Maintenance Costs

There would be some capital and maintenance costs to the Port Authorities for providing a suitable hard standing and equipment. The exact figure for these will vary depending on local circumstances, but would typically be in the order of £0 — 1000 per site, although £800 has been suggested as the most realistic figure⁴.

Annual maintenance of the hard standing and any related requirements is estimated to be around £300 per year.

Administrative Costs

Administrative costs to each Port Authority registering an exemption is estimated to be £50 per annum (based on just over 3 hours at £16 per hour). This includes time taken to notify SEPA of the requirement to burn dunnage and to provide the necessary information. Some initial training as to the requirement to burn the material on the hard standing may be required and this is included in the cost.

The total costs of option 3 are provided in the table below. All costs are presented in present values, and a 3.5% discount rate has been applied.

Table — Costs Of Registering A Dunnage Exemption Over 10 Years

Option 4

This option would require the provision of purpose built incinerators for the burning and full permitting regulatory costs.

Regulatory Costs

In order to obtain a permit for the burning of waste in an incinerator, it is estimated that SEPA would charge an initial application fee of £842 with an annual subsistence charge of £861. There is also a permit surrender charge of £253.

Capital & Maintenance Costs

These include the costs of construction, hardware, maintenance and additional administration of a small-scale incinerator. It is not possible to provide accurate figures but typically these costs would be in the order of £5,000 + per site.

The annual maintenance cost of the incinerators is dependent on site conditions and individual incinerators, but an estimate of £500 per year per site has been provided.

Administrative Costs

It is difficult to estimate the total administrative costs. However, an incinerator is likely to need planning permission, which must be in place before a permit is granted. Putting together this application and the permit application (which will include pollution risk assessments) can be resource intensive. Furthermore, there are also the costs to the operator for the surrender of the permit when the operation has finished. These costs have been estimated to be up to £10,000 per site. Total costs for this option are shown in the table below.

Table - Total Costs for Permit Over A 10 Year Period

Other Costs

In addition to the costs outlined above, permitting requires the operator to show that they are a ‘fit and proper person’ (FAPP). The criteria for the FAPP test involve providing technically competent management, a lack of relevant convictions, and the provision of sufficient financial provision to cover the costs of the conditions imposed in the permit. The costs of such requirements have not been assessed due to the wide variety of potential costs involved. In addition, applying for a permit can be a lengthy process both in preparing the application, and in processing the application.

Comments are invited, and information is sought on the costs of each option. In particular, how the costs of each option compares with the profitability of the ports in question.

Consultation with Small Business

The Executive would welcome comments on the measures outlined, particularly from small businesses.

Recommendations

Option 1

Zero additional cost but does not deal with the risks associated with burning and the potential pollution and harm to human health.

Option 2

Low additional cost but may not deal with the risks associated with burning and there is no evidence to suggest that the Port Authorities would welcome or adhere to a voluntary scheme.

Option 3

This option provides common standards of environmental and public health control and minimises the risks of pollution or harm. The exemption complies with EU and national waste management legislation at reasonable cost to business.

Option 4

This option poses very high costs, especially for the provision for purpose built incinerators. These costs are considered far too onerous and could lead to evasion of the law and uncontrolled burning.

The Executive recommends option 3 as the most appropriate measure for dealing with this issue.

Enforcement, Sanctions, Monitoring and Review

SEPA, as competent authority, would be responsible for ensuring compliance with the proposed new exemption. The operator would need to submit a notification detailing how they would comply with the general binding rules, and SEPA would undertake an initial and annual inspection of the site as a minimum. The operator would also be required to maintain records and make these available to SEPA on request. SEPA will issue guidelines to officers once the proposed new exemption is introduced to ensure that the new regulation is implemented, monitored and enforced consistently. If the proposals are introduced, the Executive with SEPA will keep the effectiveness of the regulation under review.

Storage of Sewage Sludge

Title of Proposed Measure

Amendment to the waste management licensing exemption for the storage of sewage sludge prior to spreading under the Sludge (Use in Agriculture) Regulations; and for the spreading of sludge to non-agricultural land.

Issue

Following SEPA recommendations, the Executive has reviewed the exemption for the storage of sewage sludge to ensure that it continues to protect the environment and human health. This is in light of changes to industry practice, and the nature and quantity of sludge that can be stored as a result of proposed revisions to the Sludge (Use in Agriculture) Regulations 1989, on which there has been a separate consultation exercise.

Recognising that sludge can be recovered beneficially to non-agricultural land, the Executive proposes to continue to allow this activity to occur where it results in ecological improvement. Furthermore, the 1989 definition of agriculture that is used for the purposes of this exemption does not include the spreading of sludge to industrial crops. Industrial crops are used mainly for the production of energy from biogas. This is a growing industry and the Executive wishes to support it through the provision of an exemption from licensing for the spreading of sludge to such crops. The exemption therefore allows such spreading only where it confers agricultural benefit.

Objective

To encourage waste recovery activities through the provision of an exemption from waste management licensing. However, general binding rules are required to ensure that these waste recovery activities continue to meet the objectives of Article 4 and Article 11 of the WFD.

The proposals include a new requirement on operators to pay a fee to SEPA for the registration of the exemptions where the sludge is to be spread. The fee will cover SEPA’s costs of inspection and analysis of information provided in the notification to them. This will enable SEPA to regulate the exempt sites more effectively and is in line with the general policy of charging operators on a cost recovery basis.

Risk Assessment

If an exemption from licensing for the storage and spreading of sludge was not provided, the activity would require a waste management licence. This is a costly activity (see below) and such costs would act to deter those who store and spread the sludge from the activity. This would result in much of the sewage sludge recycled to land annually, being diverted to incineration or landfill. This is not a sustainable option and goes against Executive policy.

Furthermore, if provision is not made to allow the spreading to industrial crops to be exempt from waste management licensing, then it is likely that much of the sludge used for this purpose will be diverted to other outlets. The amount of sludge applied to land is expected to increase, particularly when changes to the Sludge (Use in Agriculture) Regulations come into force. If an exemption was not provided, the costs involved in obtaining a licence would probably make the activity unworkable. This in turn would impact on the production of energy from biomass, which is a resource that the Executive wishes to promote.

While the Executive wishes to encourage these activities, care must be taken to ensure that they do not cause harm to the environment and human health. The risks of not properly regulating the storage of sewage sludge cannot be quantified in terms of costs, but include water pollution incidents and nuisance as a result of odour and dust.

OPTIONS

Option 1

Retain the current exemption to allow for the storage of sewage sludge and the spreading to non-agricultural land where it confers ecological improvement. This will require those that do not meet the conditions of the exemption to obtain a waste management licence.

Option 2

Provide a revised exemption with enhanced ‘general binding rules’ which will more clearly specify the conditions that will contribute towards meeting Article 4 objectives. This will include the separate provision to allow the spreading of waste to industrial crops.

Option 3

Repeal the existing exemption, so that all undertakings storing or spreading the waste under the current exemption would be required to obtain a waste management licence.

Issues of Equity or Fairness

The Executive recommends option 2, under which there are no perceived issues of equity and fairness. All similar operations will be treated the same.

Benefits

Option 1

There are no additional benefits with this option as it represents the ‘do nothing’ case. Therefore there will be no impact on prevention of harm to human health and pollution of the environment. This option incurs no charges on operators who spread sludge to land under the exemption and so is the cheapest option for these operators.

Option 2

• Enhanced storage requirements help to ensure protection of human health and prevent pollution of the environment, especially given the increased use of de-watered sludge. The exemption will also ensure that the storage requirements pending use on non-agricultural land are consistent with the storage requirements pending use on agricultural land.

• The amendment clarifies requirements and allows SEPA sufficient time to consider the notification. The information requirements assist SEPA in their assessment, and ensure that the storage of sludge is regulated properly.

• The time limit on storage will ensure that the exemption is used to encourage waste recovery rather than disposal. This is in accordance with Executive policy to increase the level of waste recovered.

• Specifying the definition of "ecological improvement" achieves consistency with the exemption for spreading of industrial waste for ecological improvement and provides more control over the exemption so that the activities are recovery rather than disposal operations.

• Introduction of common standards for the storage of sewage sludge and spreading on non-agricultural land. This will enhance consistency and clarity between activities.

• The requirement on SEPA to inspect will help to ensure the legitimacy of the activity.

Option 3

Enhanced scrutiny and site monitoring through waste management licences would ensure that the operations are carried out in a way that protects the environment and human health. Requiring a waste management licence will meet the requirements of EU and national legislation.

Compliance Costs for Business, Charity and Voluntary Organisations

This exemption could affect anyone involved in sludge production and recycling of sludge on land. This will include Scottish Water and any owners of private sewage treatment works and contractors for the de-sludging of septic tanks. Unfortunately, numbers of these operators are unavailable.

In relation to the spreading for ecological benefit and for industrial crops, the exemption will affect those who conduct the spreading together with those who grow the crops. It is estimated that there was 8 notifications⁵ for the spreading of sludge in 2002/2003

It is anticipated that many of these operations will last around 5 years, with some operating on a semi-permanent basis.

Compliance Costs

Operators who fall outside the terms of the exemption are currently required to have a waste management licence. As this situation will remain constant no matter which option is chosen, these operators have not been included in the calculations. In 2002/3, approximately 60 notifications were received by SEPA for the storage of sludge, and it is estimated that 8 notifications were received for the spreading of sludge to non-agricultural land. These 8 notifications include both spreading to industrial crops and spreading to other non-agricultural land for the purposes of ecological improvement. This gives a total of 68 notifications for this exemption in 2002/3.

Costs shown below are in present values, and a 3.5% discount rate has been applied.

Option 1

There are no additional costs with this option as it represents the base case. An indication of current costs is detailed below.

SEPA currently incurs costs through considering whether the notification received complies with the general rules of the exemption, and for carrying out periodic inspections. The costs do not vary depending on whether the exemption is for the storage or for the spreading of sludge and are currently covered by grant-in-aid from the Executive, and are estimated as follows:

The operator also incurs costs through providing information to SEPA to demonstrate compliance with the general rules of the exemption. These costs will vary depending, for example on whether water companies have GIS systems to assist them with the task. We do not have access to exact figures, but it has been suggested that they will be in the region of £150 per notification. Therefore:

Total cost of option 1 = £23,120 + £10,200 = £33,320 per annum

Option 2⁸

In option 1, SEPA’s costs for carrying out inspections, considering the information provided in the notification to ensure compliance with the general rules of the exemption were all covered by the Executive through grant in aid. Under option 2 this will remain the case where an exemption is registered for the storage of sludge. However, a charge will be imposed on the operator where the sludge is to be spread for ecological benefit or to industrial crops (but not for spreading which is presently covered by the Sewage Sludge Regulations 1989).

The cost per notification (£533) is higher than under option 1 as there will be a specific requirement for SEPA to inspect the site in addition to the requirement to carry out appropriate periodic inspection. Furthermore, the information required in the notice will involve more analysis, particularly where there is a requirement to show agricultural benefit or ecological improvement.

Each registration will last for one year after which the operator must re-notify the exemption if the activity continues. A fee (where relevant) to SEPA must be paid on re-notification. A re-notification fee of £402 has been used in estimating costs.

The costs for those operations using the exemption for the storage of sludge will be approximately the same as under option 1 — i.e. £150 per notification. Although operators would be required to keep records which they do not have to do at present, the costs of such activities is anticipated to be minimal.

For operations using the exemption for the spreading of sludge for ecological improvement or to industrial crops for agricultural benefit, new requirements will be imposed. This is mainly through the requirement to provide information to demonstrate that the activity confers in agricultural benefit or ecological improvement. This information must be based on properly qualified advice. There is uncertainty over the costs of these assessments and of providing the necessary information to SEPA, but we have applied DEFRAs estimated range of £200 - £1000 per notification.

The regulation costs for storage and spreading operations are shown in the tables below:

Table — Maximum Costs for A 5 Year Storage Exemption

Where a repeat notification is required where the activity continues for more than a year, it is likely that the administrative costs of providing information to SEPA will be lower. This is because much of the information will be the same and therefore already available. It has not been possible to estimate how much these reduced costs will be.

Table — Maximum Costs for A 5 Year Spreading Exemption

Option 3

The repeal of the exemption would mean that waste management licences will be required for each exempt activity. All costs will be borne by the operators, who will cover SEPA’s costs.

The operator will be required to pay an initial inspection fee and an annual subsistence charge. Significant costs are also incurred in preparing an application for a waste management licence. These include obtaining planning permission (where required) and conducting pollution risk assessments. Furthermore, once the activity has ceased, the operator must pay SEPA a surrender fee to cover their costs issuing a certificate of completion and for inspection. We do not have exact costs for these, however estimates based on information given by industry are provided in the table below.

Table - Licence Costs For 68 Operators

In addition to the costs outlined above, each operator will need to demonstrate they are ‘Fit and Proper’ persons including provision of technically competent management and financial guarantees sufficient to discharge the obligations of the licence. Both of these will act to increase further the costs of option 3. However, the costs of financial provision vary significantly between sites, and does not necessarily have to be in place for the operation to begin. Therefore an estimate has not been provided.

We would welcome comments and further estimates of the costs involved. These will included in the full RIA.

Other Costs

Obtaining a waste management licence is a long process. It takes a minimum of 2 months for SEPA to process an application due to the statutory consultation requirements.

Consultation with Small Business

Soundings have been taken with the industry on the issue of sewage sludge recycling. Over the last few years, extensive research and consultation has been carried out on treatment and soil standards for sewage sludge recycling to land. A consultation for revisions to the 1989 Sludge (use in agriculture) Regulations has already been undertaken. Related to this, there is also a planned revision to the associated Code of Practice.

The Executive and SEPA were involved in the development of the Safe Sludge Matrix for crops, which provides advice on the use of sewage sludge on crops. It includes examples of the different crops used and details the voluntary ban on spreading of untreated sludge to such crops.

Recommendation

Option 1 does not act to fulfil the recommendations for improvement as suggested by SEPA. While enhanced controls would be provided by option 3 — i.e. the requirement for all operations to have a waste management licence, this option is over regulatory and over burdensome, given that the operations under this exemption can safely be provided within the terms of a waste management licensing exemption. Option 3 would discourage such waste recovery operations, resulting in more waste being diverted to disposal routes such as landfill.

Given this, the Executive recommends option 2. The option provides the most appropriate regulatory approach, being proportionate to the risks to the environment and human health.

Enforcement, Sanctions, Monitoring and Review

SEPA, as competent authority, administers and enforces the waste management regime, including exemptions. As well as the exemption conditions requiring the operator to notify SEPA and maintain records, SEPA has a duty to carry out "appropriate periodic inspections". They will also issue internal guidelines and train staff to facilitate implementation and enforcement. The Executive, in conjunction with SEPA, will keep under review the effectiveness of the regulation.

Sewage Treatment Works

Title of Proposed Measure

Amendments to the waste licensing exemption (paragraph 10) regarding the recovery of sewage sludge at sewage treatment works

Issue and Objective

The import of sewage sludge is currently an exempt activity under paragraph 10(1), Schedule 3 to the Waste Management Licensing Regulations 1994. The exemption allows the import for recovery of sewage sludge, screenings and septic tank sludge to a sewage treatment works (STW) without the need for a waste management license. The current exemption only applies to STW’s importing less than 10,000 cu.m of sewage sludge. All works importing more than 10,000 m³ require to be licensed. This currently equates to 25 sites.

The limit in the exemption was set following consultation with the water and sewerage industry. However, demand for increased capacity in order to allow the import for recovery of sewage sludge at STW’s has grown. The 10,000 m³ limit can present a barrier to the effective development of sewage sludge treatment facilities in certain areas.

There are over 700 STWs in Scotland of which some 68 have the capacity and capability of receiving and recovering imported sewage sludge. It is these 68 sites that are the subject of this RIA and consultation.

This review considers increasing the limit on the quantity of sewage that may be imported to a treatment works for recovery under an exemption from licensing from 10,000 m³ to 100,000 m³. per annum.

The objective of any proposed measure is to ensure that the legislative framework is complied with and that appropriate and proportionate limits and conditions are placed on the treatment of sewage and sludge imported to STWs, in order to encourage the effective and safe recovery of the waste.

The proposals include a new requirement on operators to pay a fee to SEPA for the registration of the exemptions. The fee will cover SEPA’s costs of inspection and analysis of information provided in the notification to them. This will enable SEPA to regulate the exempt sites more effectively and is in line with the general policy of charging operators on a cost recovery basis.

Risk Assessment

STW’s are already heavily regulated and facilities should have the capability of recovering sludge in an effective manner, the management/audit systems in place to cater for tankers of imported waste, and the infrastructure to collect any spillages and protect surface and ground waters. As a result, the risks to human health and the environment are considered to be small.

The recovery of sewage sludge in an uncontrolled manner has the potential for causing pollution of the environment and harm to human health. Untreated sewage carries a potential risk to human health through the transfer of pathogenic organisms and can cause nuisance and harm through obnoxious odours. There has been a great deal of public scrutiny of sewage treatment and recovery operations in recent times and it is important that these wastes are handled in a responsible fashion to minimise risk. Both exemptions to waste management licensing and the requirement for licences provide this level of responsible management ensuring risk minimisation.

There are estimated to be 68 STWs in Scotland capable of recovering imported sewage and sludge. Once the ban on untreated sewage and septic tank sludges being spread to land comes into effect, it is estimated that 25 of these will import more than 10,000m³ of sewage per annum. The full breakdown is given in the table below.

Table

If this amendment is not made to the regulations, SEPA will be forced to require all STW’s importing over 10,000 m³ to obtain a waste management licence which may deter the recovery activity taking place and the waste may be diverted to other outlets for disposal.

OPTIONS

Option 1

Do nothing and maintain the current exemption to allow up to 10,000m³ of sewage sludge to be recovered under the exemption and require waste management licensing for activities above that limit.

This will mean that the 25 sites, which currently import over 10,000m³, and thus are required to hold a waste management licence, will continue to come under the licensing regulations.

Option 2

Provide a revised exemption with a 100,000m³ limit on imported sewage and sludge and waste management licensing.

At this limit, only the 4 largest STWs will be required to have waste management licences. The remainder will be subject to the ‘general binding rules’ as set out in the amending regulations.

It should be noted that STWs are due to be subject to PPC regulation in the future. The costs of this requirement have not been assessed.

Issues of Equity and Fairness

Option 1

Representations were made to the Executive about raising the limit from 10,000m³ to 100,000m^3. The present limit may have affected development and investment plans and in the absence of change, SEPA will be duty bound to seek applications for licences for all facilities importing over 10,000 m³ per annum. Given there is no sliding scale of charges, disproportionate regulatory costs will fall on smaller operators.

Option 2

Increasing the limit to 100,000 m³ per annum would satisfy industry requirements. It is unlikely that there will be any issues of equity and fairness as this is what the industry are asking for.

Benefits

Option 1

Licensing for sites receiving over 10,000 cu.m will provide site-specific risk based controls, and will provide protection of the environment and human health.

Option 2

All sites would be subject to common standards of environmental control, but with only 4 of the very largest sites requiring site specific licensing. As with the other options, this would comply with EU and national legislation. Benefits will be incurred in the reduction in the time and resources required to obtain an exemption rather than a waste management licence (see costs section).

Costs

The recovery operations can extend over many years, becoming effectively semi permanent.

Option 1

Sites already holding a licence will not incur any additional costs, as they will carry on through business as usual. Sites that need to apply for a licence will incur costs through the preparation of the information required to be included in the licence application. This would include pollution risk assessments. Planning permission (if required) must also be in place before a licence can come into force and there are associated costs with obtaining this. Furthermore, once the operation ceases, an application for surrender of the licence must be made to SEPA. This involves further administrative costs together with a fee payable to SEPA for site assessment and the issue of a certification of completion.

Cost for Current Exempt Sites

Under this option there are around 43 exempt sites. These sites would have faced costs in the form of a one off notification charge¹¹ of around £376. There are no re-notification costs, as these would continue to be covered by grant in aid. The sites would also have faced administrative costs, through the putting together of information for the notification to SEPA, but these are difficult to estimate, However, they are likely to have been in the range £200 to £1000 (although for existing exemptions, this is likely to be at the lower end of the scale).

Therefore the maximum total costs for exempt sites:

43 x (£376 + £200) = £24,768, of which £8,600 is payable by the operators

43 x (£376 + £1000) = £59,168, of which £43,000 is payable by the operators

We would welcome accurate information from the industry as to how much it costs at present to notify SEPA of the exemption.

Option 2

It is estimated that under this option there will be 4 licensed sewage treatment works (STW’s) and 64 STWs will be exempt from licensing

The sites that have to be licensed will face costs in the form of an initial application charge and an annual subsistence fee. There will also be costs involved in the preparation of the licence application, and a cost will be incurred when a site decides to surrender it’s licence, in order to cover the costs to SEPA for issuing a certificate of completion and for inspection.

An indication of these costs are shown in the table below. Costs shown below are in present values, and a 3.5% discount rate has been applied. Application fee for full licensing is estimated at £2,582 and subsistence charge at £3,227. Licence surrender is estimated at £1,460.¹²

Table - Licence Costs for sites importing over 100,000 m³ p.a.

Costs for Exempt Sites

64 sites could register as exempt from waste management licensing.

These sites will face initial notification and annual re-notification charges. Sites will also incur additional costs through the preparation of notification.

Based on DEFRA estimates the initial notification may be around £376 and re-notification at £313 per annum, whilst notice preparation costs range between £200-£1000 per annum.

Table — Costs Of Registering An Exemption Over 10 Years

Other Costs

Option 1

This is unlikely to provide any further environmental benefits that are not already provided for by existing controls and legislation. The measure may result in companies considering importing sewage to smaller centres, with a result that tankers would travel greater distances to remote rural sites. These sites, by their nature, have less ability to withstand shock loads of ammonia or Biological Oxygen Demand that may be associated with imported sludge, and as such, any measure should not encourage their use.

Option 2

Sites that are currently licensed, but import less than 100,000 m³ will no longer require these licences although they will still be subject to the surrender provisions for the EPA 1990. However, companies may wish to retain licences to enable them to continue to import other industrial wastes, and so it is not possible to say what these costs might be.

For all options, capital costs of impervious pavements and drainage systems, where required, and other licensing or exemption requirements have not been assessed. Nor have the costs involved with obtaining the certificate of technical competence or the financial provision that are required to fulfil the ‘fit and proper person’ test required for waste management licensing.

Comments are invited as to the accuracy of the costs identified above, with evidence where possible. We would be grateful for information as to how each option would affect the profitability of the STW operations, so that the scale of concern can be gauged.

Consultation with Small Business

The Executive would welcome any further comment from interested parties.

Summary and Recommendations

All measures fully comply with EU and national legislation.

Option 1

In the short term, the present arrangements do not provide the certainty required to plan and invest in recovery facilities. All sites accepting sewage sludge over 10,000m³ per annum would be required to obtain waste management licences. While licences provide site-specific risk based conditions for pollution control, it is not felt that this will result in additional environmental benefits that cannot be obtained from an exemption.

Option 2

Will result in the majority of sites (94%) operating under an exemption, with the remaining [4] largest sites subject to waste management licensing.

The Executive considers that, for most STWs, the recovery of imported sewage sludge can be adequately controlled through the ‘general binding rules’ provided in an exemption from waste management licensing. We consider that only the largest works require additional measures that will need to be assessed on a case-by-case risk-basis, and that a cut off at 100,000m³ per annum establishes the correct balance. The Executive recommends that option 2 represents the most appropriate option to be brought forward.

Enforcement, Sanctions, Monitoring and Review

SEPA, as the competent authority, will be responsible for ensuring compliance with the proposed exemption. An operator will need to register with SEPA and put in place administrative arrangements for proper management control, quality assurance and record keeping. SEPA will be required to undertake an initial and subsequent annual inspection of the site. Should the proposed measure be accepted, SEPA would issue guidelines to officers and arrange training to ensure that the regulation was implemented, monitored and enforced consistently across the country. The Executive, in conjunction with SEPA, would keep under review the effectiveness of the regulation.

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