Business criticises green industry plans

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A Commission proposal aimed at toughening up emissions legislation for industrial installations has come under fire from business leaders, who say it could force power stations and other plants to shut down.

Commission plans to revise the existing rules on emissions from industrial installations across the EU are under attack from business leaders for being overly costly and lacking flexibility. 

The proposal, presented by the Commission on 21 December 2007, seeks to ensure that existing rules on industrial emissions are better complied with, after a review revealed that only 50% of industrial installations in the EU have thus far been granted permits containing limit emission values. 

Under the new plans, installations would only be able to diverge from the use of “best available techniques” (BATs) under specific conditions, meaning that governments will no longer be able to grant increased flexibility to certain installations according to their location or design. 

It is this provision that constitutes the major sticking point for industry, which relied on such exemptions to keep certain older plants alive. The Commission says it will investigate the possibility of introducing more flexibility through the development of EU-wide rules on emissions trading for NOx and SO2 – similar to those in existence for CO2 – although no such provisions are included in the legislative proposal.

Minimum emission limits for large combustion plants would be strengthened under the new rules, and medium-sized plants generating between 20 and 50 MegaWatts (MW), as well as activities such as the production of wood-based panels and preservation of wood – until now excluded from the scope of the directive – would also be subjected to limit values, in order to ensure that all member states receive the same high level of environmental protection.

Furthermore, the proposal introduces minimum provisions on environmental inspections of installations, a review of permit-granting conditions, and reporting of compliance. Incentives for the development and promotion of environmentally-friendly technologies are also included. 

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Environment Commissioner Stavros Dimas said: "Industrial emissions in the European Union remain too high and are having detrimental effects on human health and the environment […] The EU must ensure that companies meet their obligations and use the best available techniques." 

According to the Commission, making the granting of permits conditional on the use of BATs "will have positive knock-on effects on health and the environment, greatly exceeding the costs (that) installations will incur to comply with the new directive". 

Indeed, it foresees that the emission reductions achieved at large combustion plants alone could offer net benefits ranging between €7 to €28 billion per year and should reduce premature deaths and years of life lost by 13,000 and 125,000 respectively. 

It further adds that the proposed directive will reduce administrative costs for authorities and operators by between €105 and €255 million per year, "thus contributing to the future sustainability of EU industry". 

However, BusinessEurope, which represents European employers, says the cost of compliance could force many plants to close. "These directives will impose a disproportionate cost on industry, leading to production cuts in Europe rather than to further innovation and investment in clean technologies," it said in a letter sent to Industry Commissioner Günter Verheugen on 3 January. 

The association says it would prefer to maintain the current system, which allows governments to maintain some flexibility when granting permits, and that the introduction of a trading system for pollutants like NOx or SO2 is unlikely to work as well.

The 1996 Directive on Integrated Pollution Prevention and Control (IPPC) introduces a permit system to prevent and limit pollution from large-scale industrial installations. Sectors covered include everything from metals, chemicals and paper to processed food, oil refineries and large-scale pig and poultry farms. 

Permits are issued by the competent authorities in member states and require industrial operators to apply Best Available Techniques (BATs) - the most cost-effective techniques to achieve a high level of environmental protection. 

Based on the BATs, which are set at EU-level, the permits include precise limit values for atmospheric pollutants that cause acid rain and smog, such as sulphur dioxide (SO2), nitrogen oxides (NOx), dust and volatile organic compounds (VOCs). 

Nevertheless, the current directive allows authorities to take into account the technical characteristics of the installation concerned, its geographical location and the local environmental conditions when drawing up emission limits – a flexibility that the Commission believes is being abused. 

Indeed, although member states were given eight years (until October 2007) to ensure that their existing industrial installations are fully compliant, according to the Commission, just 50% of installations in the EU have been granted permits so far. 

  • 21 Dec. 2007: The proposal was transmitted to Council and Parliament for examination in 2008.

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