February 2004

IPPC - How Much Will It Cost?

As companies are phased into the new Integrated Pollution Prevention Control (IPPC) regime, the question on everyone's lips is how much will the permit cost?

As more and more regulatory regimes are phased in across England and Wales, the Environment Agency is seeking to improve the effectiveness and efficiency of regulation via common risk assessment approaches.

The EP-OPRA (Environmental Protection - Operator and Pollution Risk Appraisal) scheme has been developed by the Environment Agency as a risk screening methodology for the Integrated Pollution Prevention and Control (IPPC) and Landfill Directives.

The Environmental Protection Act 1990 introduced Integrated Pollution Control (IPC) and charging which was simple to use but provided no advantage to the operators to improve. With the dawn of the IPPC regime, EP-OPRA was introduced in April 2003 and allowed scores to be used for charging purposes, hence providing an incentive for operator improvement. Now, in 2004, the Agency have just ended a consultation period for the EP-OPRA 2004/05 version 2, which will be the pricing structure for this year's Part A (1) process operators.

The EP-OPRA system aims to target those activities that pose the greatest risks to the environment by assessing four attributes:

Complexity
Location
Emissions
Operator Performance

Supported by a spreadsheet and guidance, the system provides look up tables and objective scoring systems which are to be completed by the operator. From these assessments, an EP-OPRA banded profile is calculated by the spreadsheet, producing a final output from each attribute. Each attribute has been divided into 5 bands A to E, where A equates to the lowest band, requiring the least amount of regulatory oversight and E the highest. These bands are then carried forward to generate the EP-OPRA banded profile for the installation covered by the permit.

Complexity

Schedule 1 of the PPC Regulations lists all the activities that require an installation to be subject to a PPC permit. The more complex an installation the more regulatory effort will be needed to understand the processes involved, their interactions and their pollution potential, hence the higher the fee.

Location

The amount of regulatory effort will depend on the location of an installation and its environmental context. Those sites in close proximity to human population, Sites of Special Scientific Interest (SSSIs) and highly sensitive receiving waters will be subject to higher application and subsistence fees.

Emissions

An emissions index approach is used for emissions to air, water and land. The index is based on calculated Emissions Thresholds for various pollutants which reflect the potential for a substance to cause environmental harm.

Operator Performance Appraisal

To a large extent the preceding attributes are beyond operator control, with the exception of emissions which can be abated. However, operator performance is an aspect which can be heavily influenced by the operator in order to manage the risks to the environment and lower the application fee.

Assessed annually, operator performance includes attributes such as the number of pollution incidents and complaints, plant maintenance and the possession of a recognised environmental management system (EMS) such as EMAS or ISO 14001.

Operator performance can significantly affect OPRA band and therefore fees, for example:

Organisation	Application Fee	Subsistence Fee
EMS accredited to EMAS / ISO 14001	£5300	£2600
EMS but no external audit	£7900	£3800
No EMS	£10400	£5200

It is with this appraisal scheme that the Environment Agency hopes to encourage operators of prescribed activities under the PPC regulations to manage and improve their environmental performance.

The Environment Agency will be assessing sites with the operators as part of the pre-application time with a regulator. Subsistence fees are open to reduction and change, depending on operator performance and emissions reduction.

At present 450 IPPC permits have been issued to installations at an average of £8,600 per application fee. Prices vary significantly even within the same industry sectors, for example a good performing Surface Treatment operation can expect to pay around £6000 in application fees, whereas poor performers in sensitive locations with no management systems carrying out the same processes will expect to pay up to £25,000.

The initial EP-OPRA banding and therefore application and subsistence fees will be finalised at the point of permit issue.

Part A (2) and B installations as under Schedule 1 of the PPC Regulations will be operating a different fee system under their Local Authority. The fee payable to the local regulator is a set fee of around £1800 per Part A activity and around £1300 for a Part B process. The consultation for the 2004/05 charging scheme has recently come to an end so the finalised scheme is expected to be released around the same time as the EP-OPRA system.

If you require any further advice on how to reduce your PPC permit fees, please contact Richard Whitaker at Pro Enviro Ltd.