Environmental Law News Update

In this latest environmental law news update Charles MorganChristopher Badger and Mark Davies consider a call for evidence on future work from the Environmental Audit Committee, a new government consultation on plastic packaging tax and the latest policy outline from the Environment Agency on the treatment of sludge.

Environmental Audit Committee call for evidence

The EAC have issued a call for evidence from stakeholders on what its future programme of work should be. This follows the reshuffle of the Committee that took place at the start of the year with Philip Dunne MP elected as chair and its members elected (9 Conservative MPs, including the chair, 5 Labour MPs, 1 Green MP and 1 SNP MP).

The call is not, however, an opportunity to entreat the Committee to focus on whatever burning environmental topic you might consider relevant, but rather what you might consider most relevant about a number of topics pre-selected by the Committee. The pre-selected topics are:

• Energy efficiency of existing homes
• Nature based solutions to climate change
• Local authorities and net zero
• Follow up on progress since 2018 Green Finance inquiry
• Community energy
• Biodiversity and ecosystem services
• Sustainability of crop management
• Carbon labelling

At present the Committee is calling for ‘short written submissions’ to aid the Committee in prioritising its programme of work and they may be submitted via the Committee’s website by 5pm on 9 April.

The focus of submissions should be on:

• What are the key issues that the Committee should consider under a particular inquiry topic?
• How effective is government policy in the policy area covered by each inquiry?
• Why should the Committee consider a particular inquiry as a priority?

Once the Committee have reviewed the initial submissions there will be a further call for evidence for more detailed submissions on the chosen topic.

This author cannot help but feel that each of the topics is highly worthy of consideration and the Committee is going to be hard pressed to select one over another.

The announcement, including a link for submissions, may be found here

Government consults on plastic packaging tax

The Government has launched a consultation on the design of the Plastic Packaging Tax. The tax is intended to encourage the use of recycled plastic instead of new plastic within packaging. This should create greater demand for recycled plastic which will in turn stimulate increased levels of plastic recycling and plastic collection.

The consultation looks at very specific areas:

• The scope of the tax
• Liability for the tax
• Excluding small operators (de minimis)
• Evidence requirements
• Exports
• Registration, returns and enforcement

The tax will be charged at £200 per tonne where less than 30% recycled plastic is used in packaging. The rate of tax and the percentage is not part of the consultation.

The proposal is that from April 2022 UK manufacturers and importers of plastic packaging who reach and exceed the de minimis threshold will be required to register with HMRC and account for any tax that is due. The tax will be accounted for through quarterly tax returns. A group facility to register for the tax has been proposed to ensure that reporting requirements are not burdensome to business, enabling a number of businesses within a corporate structure to be able to report together as a single taxable person. There is to be a compliance and enforcement regime, run by HMRC, with sanctions to address non-compliance. Criminal penalties are to be considered.

The consultation identifies that the Government is considering ‘tax conditionality’. This would potentially mean that the issuing and renewal of other licences and registrations may be conditional on tax compliance. Ultimately, non-compliance with the Plastic Packaging Tax could lead to other approvals being removed for one or more particular businesses.

The deadline for responding to the consultation is 20 May 2020. The consultation can be found here

Sludge won’t budge despite proposed regulatory nudge

Sludge is the solid end product of sewage treatment. Its disposal is a paradigm illustration of the maxim that “Nothing ever goes away; it just goes somewhere else”. It may be little-known that (according to the Environment Agency) about 96% of sewage sludge is disposed by spreading as fertiliser on agricultural land, with the result that every year an area about the size of Berkshire is covered in it (note: this does not all in practice happen in Berkshire, which is actually a very fragrant place indeed). There have until recently been few alternatives; they include incineration and landfill, but each has its own problems. Dumping at sea was once popular but is now prohibited.

Any over-zealous regulation relating to sewage disposal always runs up against the buffers of “So what else do you suggest we do with it?”. It is ceaselessly produced in extremely large quantities. The fascinating website of the Sulabh International Museum of Toilets informs us that in India, for example, the daily load is 135 million kilograms. Sludge disposal to agricultural land has accordingly enjoyed to date something of a regulatory light touch. It is indispensable. The main instrument in the UK is currently the Sludge (Use in Agriculture) Regulations 1989, implementing the Sewage Sludge Directive. Those measures focus principally on the control of the heavy metals content of the sludge, whereas new potential hazards are now better recognised, including organic and inorganic chemicals, anti-microbial resistance and micro-plastics.

The Environment Agency has now issued a policy paper “Environment Agency strategy for safe and sustainable sludge use” in which it proposes to bring use of sludge within the framework created by the Environmental Permitting Regulations by 2021 by a process of revision described somewhat Delphically as “evolution”. The paper recognises the need to regulate these new hazards, the new treatment and distribution methods being developed by the water industry and other producers of sludge, and emerging new uses such as production of gas by anaerobic digestion. It provides a useful summary of current practices and makes the case for the choice of EPR “evolution” as the mechanism for future change (as opposed to doing nothing, revising the 1989 Regulations and adapting existing EPR régimes). The emphasis is on “risk-based and outcome-focussed regulation”. This is a welcome response to changing conditions, but the irreducible need for viable methods of lawful disposal is bound to continue to set the ultimate parameters. The paper in terms recognises this by its references to “the operational needs of all operators” and the need to “enable greater flexibility for the operator”. The environmental problems are not simply going to go away with the press of the regulatory equivalent of a modern flush button.

To keep up-to-date follow us on Twitter @6pumpcourt or click here to subscribe to the mailing list. If you have any comments or suggestions please contact Bridget Tough at bridget.tough@6pumpcourt.co.uk

Environmental Law News Update

In this latest environmental law news update Charles Morgan and Christopher Badger consider environmental promises in this week’s budget, effects on the environment from the coronavirus and a new report that says net zero by 2050 is possible.

The Budget

Amongst the £30 billion pledged to help the country respond to the coronavirus epidemic, the 2020 Budget identified some key environmental promises. This is a marked contrast to recent Budgets, particularly just a couple of years ago when the word environment was barely mentioned.

Some of the pledges include:

• A Carbon Capture and Storage Infrastructure Fund has been set up with the aim of establishing two UK CCS sites, one by the mid-2020s and a second by 2030;
• A Green Gas Levy is to be introduced, to encourage more environmentally-friendly ways of heating homes and other buildings;
• Significant investment is to be placed into electric vehicle charging infrastructure, which aims to ensure that drivers are never more than 30 miles from a rapid charging station, provide £532 million for consumer incentives for ultra-low emission vehicles and reduces taxes on zero emission vehicles.
• Entitlement to use red diesel is to be removed, save for agriculture, fishing, rail and non-commercial heating;
• 50 hectares of trees are to be planted, the equivalent of an area the size of Birmingham;
• There is to be a tax of £200 per tonne on plastic packaging that contains less than 30% recycled plastic;
• £700,000 is provided to establish the Extended Producer Responsibility Scheme;
• The Climate Change Levy on gas in 2022-23 and 2023-24 is to be raised, whilst the rate on electricity is to be frozen, in order to encourage businesses to operate in a more environmentally-friendly way.

The absence of significant tax increases means that the promises made in this Budget are to be largely funded through increased borrowing. And this isn’t a Budget that has pleased all green groups. Greenpeace have already criticised the Budget for the fact that it promises an additional £27 billion for road infrastructure improvements, which it claims shows the Government is “driving in the opposite direction”. The environmental impact assessment of that particular policy may take some digesting.

The Budget can be found here

If it’s any consolation …

Putting the potential human cost of the coronavirus to one side for the moment, there seems little doubt that the epidemic may have positive benefits for the wider environment. Despite the minor increase in domestic water consumption which may result from more frequent and prolonged handwashing, the increase in the discharge of pollutants into the sewerage system and the Starbucks ban on reusable cups, the huge slowdown of human travel and economic activity must constitute a significant nett benefit. The load upon the sewerage system of Venice and its receiving waters must have been dramatically reduced by the absence of tourists, in a manner which will surely prompt some interesting investigations as to the ability of the local ecology to recover from the heavily modified state of affairs imposed upon it for so many decades by relentless visitation in numbers at times dwarfing the resident population of the City Centre.

Yesterday’s Guardian newspaper carried a headline “Coronavirus could cause fall in global CO2 emissions”, the underlying article making the point that such a result can thus be achieved very quickly when perceived needs must. China’s emissions of CO2 are reported to have fallen by up to 25% and those of NO2 to almost nothing. The fear is, however, that the race to catch up when the economy returns to normal will rapidly negate any temporary benefits.

There was also an interesting juxtaposition of front page headlines in the Independent two weeks ago: “UK’s chief medical officers says … major sporting and cultural events are at risk” and “Huge crowds expected in Bristol for Greta Thunberg visit”. Discuss.

And a new report says net zero by 2050 is possible

A new report by Energy Systems Catapult has found Net Zero by 2050 is possible with support for innovation and scale-up across three essential areas – Low Carbon Technology, Land Use and Lifestyle.

This is a government-funded research group whose computer models are apparently used by the Committee on Climate Change

The key points identified in the report include:

• Net Zero narrows the potentially viable pathways for the future of our energy system in a way that the 80% target did not;
• Success depends on innovation in technology, land use change and behaviour;
• Carbon capture and storage and bioenergy are essential;
• A new low carbon hydrogen economy has to be created;
• Electricity generation will have to double or even treble;
• Advanced nuclear power, including small modular nuclear reactors, has to be developed;
• Meat and dairy consumption must significantly reduce. Estimates appear to vary between a 20 and 50% reduction.

The report can be found here

To keep up-to-date follow us on Twitter @6pumpcourt or click here to subscribe to the mailing list. If you have any comments or suggestions please contact Bridget Tough at bridget.tough@6pumpcourt.co.uk

Environmental Law News Update

In this latest environmental law news update Gordon Wignall, Christopher Badger and Mark Davies consider the decision on Heathrow’s third runway, a reversal of the Government’s position on onshore wind and solar and a new authority on legal professional privilege.

Heathrow third runway grounded; permanently?

Apart from anything HS2-related, it is difficult to think of an infrastructure project getting the press coverage that the Court of Appeal’s decision regarding the third runway at Heathrow got in R (oao Plan B Earth) v Secretary of State for Transport and R (oao Friends of the Earth Ltd) v Secretary of State for Transport [2020] EWCA Civ 214 (there were, as no doubt readers will be aware, many other parties involved in the case, too numerous to set out here, but all playing an important role). The question is, is it worth the hype?

The arguments of primary interest concerned the determination of the legality of the production of the ‘Airports National Policy Statement’ (or ‘ANPS’), which, designated by the then Secretary of State in June 2018, is a national policy statement prepared under s.5(1) of the Planning Act 2008, in part concerning the possible addition of a third runway to Heathrow Airport.

The Court of Appeal (Lindblom LJ, Singh LJ and Haddon-Cave LJ) were at pains in the judgment to repeatedly point out that the decision of the court does not touch on the policy decision as to whether to expand the UK’s aviation capacity by the introduction of a third runway at Heathrow. That decision, the judges stressed, is the responsibility of Government and Government alone.

The decision of the Court of Appeal to overrule the Divisional Court’s ruling concerned s.5(8) of the Planning Act 2008, which requires that the reasons for a policy set out in a National Policy Statement, like the ANPS, include an explanation of how the policy takes account of Government policy relating to the mitigation of, and adaptation to, climate change. The ANPS, the Court of Appeal concluded, was unlawful by reason of a failure to take into account the UK Government’s commitments in the Paris Agreement, those being stated Government policy in relation to the mitigation of, and adaption to, climate change.

All of which must lead to this being the main takeaway from the case; whilst the ruling of the Court of Appeal might have put the third runway at Heathrow on ice for now, it has not been permanently shelved and it will doubtless be revisited by the Government when it reassesses the ANPS in due course. So, despite the furore, the Court of Appeal’s ruling might not be as ground-breaking as has been reported.

However, that is not in any way to say that nothing of interest will come from the Court of Appeal’s ruling. Whilst the Government has announced that it will not be appealing the ruling, this author would be astounded if the case was not heard again by the Supreme Court. In addition there will doubtless there be further challenges brought to other major projects on similar grounds (indeed in the news yesterday a challenge to HS2 fronted by naturalist Chris Packham was announced) and, probably, further challenges to numerous other adopted National Policy Statements that, it might be argued, fall foul of the same failure to account.

Should the Heathrow case proceed to the Supreme Court it will be interesting to see whether a distinction is drawn between the Paris Agreement as an international instrument providing overriding direction for UK policy and the government of the day’s stated policies in relation to the mitigation of, and adaption to, climate change. Could it be that a government could simply acknowledge the Paris Agreement as guiding its policies, yet still commend the third runway at Heathrow? Indeed, what would happen if a government were to be elected that positively disavowed the commitments made by the UK under the Paris Agreement? Could that government then simply assert that the runway could go ahead without the need to consider any commitments made by the UK in the Agreement?

Whatever the answers, this is not the end of the story.

Government reverses position on onshore wind and solar

The Government is under pressure to come up with policies that will enable the UK to hit its net zero target by 2050. The latest development is that the Government has reversed its 4-year ban on subsidies for onshore wind projects. The Department of Business, Energy and Industrial Strategy has announced a new consultation on its proposed changes to the Contracts for Difference (CfD) scheme.

Put simply, the Government doesn’t appear to believe that there will be the rate of scale of new projects needed in the near term to support decarbonisation of the power sector and meet the net zero commitment at a reasonable cost. There is some force in this. Last year, in the absence of these contracts, just one new onshore wind farm was completed in the UK. The rollout of new onshore wind projects has fallen to its lowest levels since 2011.

A new CfD auction will allow cheap renewable sources like onshore wind and solar to compete for contracts which enable new projects to be financed – the first such auction since 2015. In order to meet our net zero emissions target, the Committee on Climate Change advised Government that the UK needs to quadruple the amount of power that it generates from renewables. The price of onshore wind is expected to compete with that of offshore wind and become the cheapest new energy source in the UK, to deliver lower energy bills to customers.

There will also be proposals to include floating offshore wind, proposed to be classified as a separate technology to offshore wind so that it can compete in future auctions for ‘less established technologies’.

It is reported that onshore wind has overwhelming public support, albeit not necessarily in the areas where the projects are to be built. Recognising this, the consultation also seeks views on best practice in engagement between developers and local communities.

The consultation can be found here. The deadline for responses is 22 May 2020.

New authority on legal professional privilege

Recent authorities such as R v Paul Jukes [2018] 2 Cr.App.R. 9 and Director of the Serious Fraud Office v Eurasian Natural Resources Corp Ltd [2019] 1 WLR 791 have created a little uncertainty in the litigation privilege landscape, particularly in the context of regulatory investigations. The latest relevant authority is Sports Direct International v. FRC (CA, 18 February 2020), a case about the powers of regulators to acquire documents from a third party which is not the subject of regulatory notice. It has specific application in the context of the Civil Procedure Rules.

To start with the minor of two points considered by the Court: just because a document has been attached to an email which is privileged, that does not make the document privileged. Legal professional privilege (LPP) does not protect the document or the fact that it was sent to a legal adviser under cover of a privileged communication. The CPR requires the disclosure of all free-standing documents.

Then, as to the second (major) point, the Court of Appeal began by reiterating the common law rule that any regulatory powers intended to override legal professional privilege which have been conferred by Parliament must be very clearly drafted to have that effect. In the absence of express wording, then it is possible for LPP not to apply by reason of a necessary implication of that effect.

The Court then went on to clarify that there is no special rule carving out an exception to the ordinary application of the LPP rule. Mr Justice Arnold had been wrong to decide that this exception applies where the holder of the privilege is someone other than the person who is at risk of an adverse finding as a result of the use of the information which the regulator would have obtained (if it were not for the LPP rule).

The first instance judge had applied an exemption said to have been identified by Lord Hoffmann (obiter) in R (Morgan Grenfell) v. Special Commissioner of Income Tax [2003] 1 AC 563, one which had been much criticised in academic writings. This supposed carve-out had come to be known as the “no infringement” rule (i.e. no material infringement of the privilege due to the holder of the right).

It had been argued that the “no infringement” rule applied: (i) on an application by a regulator, (ii) where the regulator was under a duty of confidentiality in the use of the information and (iii) (as set out above) where the holder of the privilege is someone other than the person who is at risk of an adverse finding as a result of the use of the information.

The very detailed reasoning can be derived from the case. Any regulator seeking to finding a lacuna to the general common law rule upholding LPP will have to look elsewhere. The Hoffmann gap has been plugged.

To keep up-to-date follow us on Twitter @6pumpcourt or click here to subscribe to the mailing list. If you have any comments or suggestions please contact Bridget Tough at bridget.tough@6pumpcourt.co.uk