Regulatory Outlook | Environment | July 2018

Written on 26 Jul 2018

Current issues

Brexit consultation on new Environmental Principles and Governance Bill

On 10 May 2018, the UK government launched its consultation on the development of the Environmental Principles and Governance Bill. The consultation addresses key issues and questions around how environmental principles should be embedded into law, public policy-making and delivery, particularly following the UK’s departure from the EU. The consultation also considers what functions and powers the new independent environmental watchdog should have. The  “green watchdog” is intended to:

  • provide independent scrutiny on existing/future environmental law and policy;
  • respond to complaints about the government’s delivery of environmental law; and
  • hold the government accountable for the delivery of environmental law by exercising enforcement powers where necessary.

The consultation closes on 2 August 2018.

New Clean Air Strategy

On 22 May 2018, the government published a new Clean Air Strategy, which aims to cut air pollution through primary legislation as part of its 25 Year Environment Plan. The announcement came just five days after the UK government was referred to the Court of Justice of the European Union for its continued failure to tackle illegal levels of air pollution and five days after the EU Commission published a draft regulation aimed at controlling carbon dioxide emissions for new heavy-duty vehicles.

WEEE Directive: open scope

The Waste Electrical and Electronic Equipment Directive sets collection, recycling and recovery targets for electrical goods. From 15 August 2018, the EU’s ‘open scope’ or ‘catch all’ approach will take effect, such that all EEE will be classed within the scope of the Directive unless an exemption applies.

EEE is equipment that is dependent on electric currents or electromagnetic fields in order to function – as well as equipment for the generation, transfer and measurement of such currents and fields – which is designed for use with a voltage rating not exceeding 1,000 volts AC or 1,5000 volts DC.

Mayor of London announces Ultra Low Emission Zones

On 8 June 2018, the Mayor of London announced that from 25 October 2021, the Ultra Low Emission Zone (ULEZ) for light vehicles in London will be extended to include the North and South Circular roads. In addition, from 2020, heavy vehicles (including buses, coaches and HGVs) will be required to meet tighter emission standards in the Low Emission Zone.

As currently planned, the ULEZ will require vehicles entering the Congestion Charging Zone to meet certain emission standards. Failure to do so will result in a penalty charge. The ULEZ will be introduced in central London on 8 April 2019 following a consultation by Transport for London in November 2017.

Changes to Renewables Obligation

The Renewables Obligation (Amendment) Order 2018, which was laid before Parliament on 4 June 2018, will amend the Renewables Obligation in England and Wales to:

  • control the costs of RO support for biomass conversion and co-firing former fossil fuel generation stations;
  • require a declaration to be provided by certain stations when claiming support for combined head and power generation; and
  • clarify the greenhouse gas emission trajectories with which certain CHP stations must comply.

The Order follows a consultation in September 2017 and the government response in January 2018.

Combatting waste crime

On 8 March 2018, the Waste Enforcement (England and Wales) Regulations 2018 came into force. The Regulations aim to strengthen the powers of environmental regulators to address waste crime in England and Wales. Such powers include the ability to:

  • remove from a property waste which is being illegally stored, kept or disposed of;
  • take steps to eliminate or reduce consequences of unlawful keeping or disposal of waste; and
  • prohibit access to and the importation of waste into a site for up to 72 hours (by serving a restriction notice) or 6 months (where the court issues a restriction order) if there is a risk of serious pollution to the environment or harm to human health.

Non-compliance with the Regulations is a criminal offence.

In Focus: Brexit

Is any new EU legislation expected to come into force and effect before the end of the transition period?

The European Commission published a draft regulation on carbon dioxide (CO2) emissions for heavy duty vehicles on 17 May 2018. This will impose CO2 emission standards for new heavy-duty vehicles for the first time, with reduction targets set for 2025 and 2030. It is not clear when the proposed Regulation will be finalised and come into effect. The reduction targets are set for after the transition period and may be less relevant to the UK as a result.

The European Commission, Parliament and Council reached a political agreement to set a binding renewable energy target for the EU for 2030 of 32%, with a clause for an upwards revision by 2023. This is in conjunction with the Commission’s proposal for a revised  Renewable Energy Directive which will replace the Renewable Energy Directive 2009 (Directive 2009/28/EC). It is not clear when this will come into force.

Is a new regulator needed, or do additional powers to be given to an existing regulator?

The European Union (Withdrawal) Act 2018 contains a provision (section 16) to secure environmental protections after Brexit and introduce an environmental watchdog.

The provision gives DEFRA until 26 December 2018 to publish an Environmental Principles and Governance Bill. This will include a set of environmental principles, a policy statement, and provisions to establish an independent environmental watchdog with legal enforcement powers to keep the government in check.

Is there an existing “equivalence” or “recognition” regime for recognising Third Country regulatory regimes?

There is no EU equivalence or recognition regime for environmental law.

Does current UK government policy mean that (subject to the terms of a future trade agreement between the UK and the EU) material changes to regulation or enforcement are likely post-Brexit?

There is speculation amongst some that existing EU legislation transposed into UK domestic law will not be properly updated or subject to proper governance once the UK leaves the EU. In particular, in areas where the UK has struggled to meet certain EU environmental standards, such as air quality, nature protection and treatment of urban waste water, there is a concern that the government may use Brexit as an opportunity to lower these standards.

However, some environmental regimes originated in the UK and it seems likely that the UK will keep the substance of these regimes, such as the regulation of emissions from industrial installations. The current UK government has also committed itself to a 25 Year Environment Plan which sets out detailed targets by which the government will monitor progress towards a better environment, with an emphasis on delivering a “green Brexit.”

Additionally, the EU and the UK are both signatories to areas of law governed by international treaties, which means the UK will remain subject to these international regimes, even it if is no longer bound by EU law (for example, transfrontier shipment of waste and use of HFC refrigerant gas).

What should businesses be doing now to prepare for Brexit?

  • Review your compliance strategies to ensure that even if EU environmental standards are lowered in the UK, you continue to comply with certain standards for Europe-bound substances and products.
  • If you are entering into contracts which have the potential to be affected by Brexit (that is, contracts that will continue after the transition period ends) you should evaluate the impact of Brexit on those contracts and consider adding provisions that expressly provide for situations in which your ability to perform the contract is affected by Brexit. This exercise should include an evaluation of the impact Brexit might have on your supply chains.
  • Utility businesses in particular should keep track of the key EU environmental law which materially impacts their long-term strategy in the UK, including Emission Trading, Environmental Permitting, and Greenhouse Gas Emissions targets to ensure their business plans account for any significant changes going forward.

Dates for the Diary

15 August 2018 The EU’s ‘open scope’ or ‘catch all’ approach takes effect such that all EEE will be classed within the scope of the Directive unless an exemption applies.
1 January 2019 The Kigali amendment to the Montreal Protocol (which brings the future production and consumption of hydrofluorocarbons (HFCs) under the control of the protocol) enters into force.
April 2019 The main rates of climate change levy increase from April 2019 to recover revenue lost from abolishing the Carbon Reduction Commitment Energy Efficiency Scheme (CRC Scheme).
October 2019 As part of the 2016 Budget, the government confirmed that it will abolish the CRC Scheme from the end of the 2018-2019 compliance year, with businesses required to surrender allowances for the final time in October 2019.
1 April 2023 After 1 April 2023, under the MEES Regulations, landlords must not continue to let any buildings which have an EPC rating of less than “E”, unless an exemption applies.