Official Report 444KB pdf
Pollution Prevention and Control (Scotland) Amendment Regulations 2014 [Draft]
Agenda item 2 is subordinate legislation. Members will take evidence from the Minister for Environment and Climate Change on the draft Pollution Prevention and Control (Scotland) Amendment Regulations 2014. The instrument has been laid under the affirmative procedure, which means that Parliament must approve it before its provisions may come into force. Following this evidence session, the committee will be invited, under agenda item 3, to consider the motion to approve the instrument.
I welcome the minister, Paul Wheelhouse, and two of his Scottish Government officials: George Burgess, deputy director for environmental quality; and Rob Morris, Scottish Environment Protection Agency sponsorship and pollution reduction team leader. Good morning, gentlemen. Minister, would you like to speak to the regulations?
I would, convener, thank you.
Good morning, everyone, and thank you for this opportunity to provide an opening statement on the draft Pollution Prevention and Control (Scotland) Amendment Regulations 2014. Along with other parts of the United Kingdom, Scotland is required to transpose article 14, paragraphs 5 to 8, of the energy efficiency directive by 5 June 2014. The directive establishes a common framework and lays down rules to promote improvements in energy efficiency.
The specific requirements of article 14, paragraphs 5 to 8, relate to a cost benefit analysis being carried out when a new or refurbished thermal electricity generation, industrial or energy production installation is planned. Exemption thresholds and exclusions are set out in draft regulations.
Scotland will be consistent with the other parts of the UK on those aspects of the directive. For example, where there is too little waste heat available, where no demand for heat exists or where the distances are too great for a viable connection to be made, there is no need to carry out a cost benefit analysis. Furthermore, certain peak-load and back-up electricity-generating installations, nuclear power stations and carbon capture and storage installations are exempt. The draft regulations make that clear, and that clarity will be of benefit to business. When a cost benefit analysis is required, that will ensure that high-efficiency co-generation, the recovery of waste heat and connection to a district heating and cooling network are identified. Where the cost benefit analysis shows that it is beneficial, SEPA will issue a permit, with conditions to ensure that the measures are implemented.
We are late in transposing because we wanted to be consistent with our UK counterparts on the technical detail and to be able to fully consider the responses to the consultation earlier this year. The timetable for transposition was tight, in that just seven months was available from the publication of the European Commission’s guidance on article 14. That guidance was important, as it clarified aspects of the directive’s meaning and, therefore, what the draft regulations needed to cover.
One other Administration in the UK, Northern Ireland, has laid its draft regulations—I understand that it did so last night. England and Wales will follow in October. The route chosen for transposition in Scotland is via amendment of the Pollution Prevention and Control (Scotland) Regulations 2012—the PPC regulations—which provide a ready-made framework for implementation and are familiar to the vast majority of operators who are affected. That is because their installations already require a permit under the PPC regulations. Operators are also familiar with SEPA as the regulator.
Although we believe that Scotland will be the first in the UK to transpose the requirements—we may be overtaken by Northern Ireland, given its move last night—we have made provision for the delay in transposition by issuing directions to SEPA.
I propose to the committee that the draft regulations provide the right mechanism for transposing the requirements of the directive, and I ask for your support in agreeing to them.
Finally, the committee should be aware that the draft regulations make a number of minor corrections to errors in the PPC regulations. Those corrections introduce no new regulatory burdens.
Thank you, minister. Do members have any questions?
Good morning, minister, and welcome to the committee. I have a general question. Is there a mechanism to ensure that the criteria are the same in Scotland, England, Northern Ireland and Wales, or is it a matter of the first country deciding and the rest falling into line? Are there discussions to agree a common approach? How does it work in practice?
My understanding is that it is usually the latter. When a new directive comes out, there is good engagement between officials in the four Administrations. We sit down and discuss what we need to do to make sure that we all comply individually and how we can co-ordinate collectively and learn from what is being done across the four Administrations. There is good collaboration between officials in our Administration and those in Northern Ireland, Wales and England to ensure that there is a common understanding of what the regulations mean. That is why it is so important to wait for guidance from the Commission so that we know what its intent is and how to interpret the directive.
In this case, we have a good example of how that collaboration works. Although I might have made light of it, it is not a competitive situation between the Administrations; we just happen to have been keen to comply as soon as possible, to be good progressive partners in Europe and to demonstrate that we are taking the directive seriously. Other Administrations similarly are trying to do their best to comply with the deadlines, and there has been good collaboration between officials.
George Burgess or Rob Morris might want to discuss the detail of how that collaboration works in practice, but there has certainly been positive engagement between departments.
I do not think that there is much to add to the minister’s comments. A lot of email exchanges and meetings take place between the various Administrations around the United Kingdom to ensure that the technical parts of the regulations are as consistent as we can make them.
In the notes that accompany this bit of subordinate legislation, there is the phrase
“In order to benefit business by having as much uniformity between Scots, English and Northern Ireland law as possible”,
which suggests that there might be examples of where that level of uniformity is not possible. Is that just a useful phrase, or are you aware of any examples of where we cannot have the desired level of uniformity? If there are such examples, how might that affect the legislation in the future?
I will invite George Burgess to comment on your second point in a moment.
The intent is not to create unnecessary differences when that can be avoided. We have a European directive that, in theory, applies to the whole of Europe; I hope that it is being applied by all Governments in Europe. We work to make sure that there is a common understanding and there are not different interpretations of the requirements between different Administrations that might lead to different legal outcomes in the application of the regulations. To avoid that unnecessary cliff edge between one Administration and another, such understanding is essential.
George Burgess might want to comment on the legal parameters and whether there are any legal differences between England and Scotland in that respect.
As far as we are aware, there are no differences of substance. For example, the search distances that are set out in the table on page 6 of the regulations will be consistent across the UK.
There are differences of form. We are using the pollution prevention and control regulations, and Northern Ireland has very similar regulations to ours. Some years ago, England and Wales moved on to a different set of regulations, the environmental permitting regulations. Their regulations will therefore look different from those in Scotland and Northern Ireland, but there is no difference in what they require operators and the regulator to do. Operators who might be operating across the UK will be able to use similar guidance and mechanisms for carrying out the cost benefit analysis.
Thank you. That is fine.
Good morning. Can you explain to me the connections between the planning system and the requirement for a cost benefit analysis in certain circumstances? I would be encouraged if there was guidance to enable developments for the saving of energy and the use of combined heat and power to happen in places that are close to communities. Is there a cross-departmental view on that?
I am certainly aware of how the regulations would be applied. A plant could be anything from a distillery to a power plant that needs to generate a significant amount of heat and therefore uses fuel to do that. Obviously, the town and country planning system would take that into account and work from the point of view of existing structural plans and local district heating strategies and plans that are available at the local authority level. It would take into account in the first scanning or filtering exercise whether a cost benefit analysis is needed. It might say that, in the area where the plant is proposed, the local authority has plans to develop a district heating network and that therefore there is likely to be demand for district heat in that area. That would perhaps imply that there was not a failure of the test of whether there was a market. It might be that, although there is no current market, there could be one and therefore it might be necessary to deliver a cost benefit analysis to prove one way or another whether district heating is a viable proposition for the plant to take on board.
Rob Morris or George Burgess might want to add to that, but it is my understanding that there is a linkage between the town and country planning system and local district heating mapping and strategies. I agree that it is important that the processes talk to each other. Rob or George might want to comment on the technicalities.
As the minister said, there will be communication between the town and country planning system and SEPA’s permit system. They are separate systems, so the majority of installations will require planning permission and a permit from SEPA. The operator can seek those in parallel or one after the other. The benefit of setting out as clearly as we can in the regulations when a cost benefit analysis is required is that the operator will know that from the outset; it will be sensible for them to have that in mind when they begin to design their installation and plan accordingly. SEPA always encourages operators to discuss matters with it well in advance of submitting an application, and they can be dealt with well at that stage of the process.
What is implicit in what George Burgess said is that a business presenting a good business case for investment to its board or to other stakeholders or shareholders will look to maximise the financial return from the investment. It would therefore be remiss of a business not to take the opportunity to sell waste heat to a local market, because doing that would improve a developer’s yield. There are other drivers, but the process that George described will ensure transparency and clarity about what developers will be required to do. Hopefully, that will allow them to design it in from the start.
SEPA is producing guidance on how the regulations will work in practice, with flow charts and information that it is necessary for operators to take on board on all the regimes that apply. That will be useful in the kind of situations that were described earlier.
I wonder whether I can carry on to where this is leading. I understand that the regulations will require a business to undertake a cost benefit analysis of combined heat and power, or whatever it is. This takes me back 30 years and what I will say follows directly from my experience of 30 years ago. You can demonstrate that thermodynamically combined heat and power is a perfectly sensible thing to do and you can demonstrate—I did—that there would be a cost benefit in doing it, but a business can still turn round and say, “Well, actually this gives me some complexity and uncertainty I don’t want, so never mind your cost benefit analysis, I’m not going to do it.” Is what follows from the regulations that the licensing authority—SEPA or whoever—will require a business to do combined heat and power, or will a business still be able to say, “Never mind the rest of you, I don’t want to do it. It’s too complicated”?
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The short answer is that there would be a requirement on the business. If the cost benefit analysis demonstrated a sound case, and if it was decided that the proposed scheme would not destroy the business or the project—in other words, if a reasonable person would say that there was a case for a district heating network to use that heat, thereby improving the energy efficiency of the plant and the whole project—SEPA would be able to require the operator to progress the scheme.
As for the mechanics, the company would to some degree have to decide how it would proceed. SEPA would not direct a company in that respect, but it would require the business to make use of the heat. George Burgess may want to tell me that I am wrong on that, but that is my understanding of the regulations.
I am interested in the evidence that we have from another source about the increasing emissions from public sector buildings. Has any area of the public sector planned a pilot to seek and use waste heat from nearby businesses? You probably cannot give a particular example just now, but it would be interesting to know whether we can set an example by showing how such a scheme would work.
I believe—I may be incorrect, as you may have local knowledge on this, convener—that Wick general hospital is looking at how waste heat can be used. There are also a number of projects involving distillers and other operators. In Glasgow, a social housing development and a college campus are combined. There are precedents in the form of existing collaborations, so we are not starting with a blank sheet.
The idea is better developed on the continent, so there are international comparators in which public sector and social operators use waste heat from commercial operations to make them more energy efficient. We can certainly come back to the committee with some examples if that would be helpful for your further deliberations on energy efficiency measures.
It would be very helpful indeed. The Caithness general hospital project is one that I am aware of, but it would be good to get some examples out there so that people can see that we are taking the scheme seriously in the Government and in the public sector in general.
Absolutely. The point about the public estate is well made. SEPA is a good example, as it is constantly seeking to improve its emissions figures. Although we can seek perfection, it is difficult to deliver in practice, but SEPA and other agencies of Government are working extremely hard to try to bring down their emissions. The issue will no doubt be discussed, as I am sure Claudia Beamish is well aware, in the public sector climate leaders forum. The question of how we can deliver on specific issues such as this one will be subject to further discussion.
Thank you. If there are no other questions, we move to agenda item 3, which is to consider motion S4M-10972, which asks the committee to recommend approval of the draft Pollution Prevention and Control (Scotland) Amendment Regulations 2014. There is room for a formal debate of up to 90 minutes on the motion if that is needed.
Motion moved,
That the Rural Affairs, Climate Change and Environment Committee recommends that the Pollution Prevention and Control (Scotland) Amendment Regulations 2014 [draft] be approved.—[Paul Wheelhouse.]
I invite members to make any comments they wish.
I will not take up 90 seconds, never mind 90 minutes. In view of what the minister has just said about the degree of compulsion, the regulations are very welcome. However, I note, wearing a previous professional hat, that the situation is likely to be complicated simply because different bits of the heat input and output may well be in different hands, and getting people to co-ordinate may be commercially difficult. The spirit might be very willing, but it might be quite difficult to make it work. I do not envy SEPA that part of its job, any more than I envy it much else that it has to do.
Does the minister wish to sum up?
I thank Mr Don for his comments. We recognise the complexity, which would be taken into account in the cost benefit analysis. I am sure that the deliverability and the cost and complexity therein would be considered. I have confidence that the regulations will be proportionally applied, but I thank Mr Don for his comments about SEPA. I know that its staff work very hard, and I appreciate his remarks.
Motion agreed to,
That the Rural Affairs, Climate Change and Environment Committee recommends that the Pollution Prevention and Control (Scotland) Amendment Regulations 2014 [draft] be approved.
I thank the minister and his officials. We will take a little break just now for the change of witnesses.
10:20 Meeting suspended.
10:23 On resuming—