Proposed changes to regulatory charges to come into force from April 2015, potentially affecting operators with a poor compliance record.
Lexology reported on the Environment Agency’s proposed changes to its regulatory charges outlined in a consultation document, which will see increased compliance charges for operators classed as “long-term poor performers”, i.e. those that have remained in compliance bands D, E or F for over two years.
The Agency noted that this is due to it having to direct additional income and resources to “poor performers” to encourage their improvement, and so a “second tier of compliance charge multipliers (uplifts)” will be introduced to fund the additional efforts made for these operators; with Lexology stating that the changes “could have significant cost implications” for those with poor compliance records.
For operators that have remained in the D compliance band for two years, the uplift will increase from the current 125 percent to 200 percent, while those in band E will face an increase from 150 percent to 300 percent and those in F will see an increase from 300 percent to 500 percent. In addition, those in band F will no longer be allowed a mid-year performance review under the new proposals.
Further changes proposed by the Agency include additional one-off costs for certain newly permitted installations”, with a new 40 percent commencement charge to be applied to “all new Environmental Permitting Regulations (EPR) installation and waste facility permits”. This will mean that in the first year, new operators will be required to pay an annual subsistence charge as well as an additional payment that is 40 percent of the annual subsistence charge. The reason for this change, according to the Agency, is to “allow it to fund additional scrutiny of newly permitted sites and prevent problems in the long term”.
Furthermore, a two percent increase in base charges for three EPR schemes – Installations, Waste Facilities, and Radioactive Substances Regulation (non nuclear) – will be introduced; while there will also be “changes to the EPR scheme, amendments to the Opra scheme […] and changes to abstraction charges”.
Lexology notes that the Agency may conduct “a much wider overhaul of its funding” in the future, as it states in the consultation document that “significantly increased level of activity resulting from environmental incidents” may require it to explore options to “cover the costs of its interventions across a range of incident, compliance and enforcement situations”. The Agency also plans to review the European Union Emissions Trading Scheme, Carbon Reduction and Energy Efficiency Scheme and Climate Change Agreements, which may also result in changes in charges associated with these schemes.
The Agency’s consultation is due to end on 20 November, with responses to be published in March 2015.