19 Dec Environment Agency Release Consultation on Proposed Changes to Charging Structure

The Environment Agency has recently published the Consultation for its proposed strategic review of charges, having significant impacts across all of its regulated charging schemes, including the waste and landfill sectors. Following an informal consultation undertaken with Trade Associations, this consultation comes ahead of the new charges regime, scheduled for April 2018.

 

In the past 6 years, there’s been very little change to fees or the way applicants are charged by the Environment Agency (EA). Now, a programme of work, ‘Strategic Review of Charges’, has been set up to reform its charging schemes for 2018-23. The Mineral Products Association (MPA) has also been involved in the informal consultation for approximately six months.

Why?

With the EA incurring increasing costs associated with regulating and experiencing further drivers to recover costs in line with the Treasury Managing Public Money rules, it has reviewed what sectors were currently paying. The review also included the associated risk of the sector to the environment.  The EA is also focused on helping to improve its own efficiency levels and create a fair, transparent and simple charging scheme for all.

“The changes proposed aim to: sustain and improve our customer services and regulatory activity; move to full cost recovery for our work; implement a simpler, fairer and more transparent charges scheme; and deal with elevated environmental risks.” (Environment Agency Charge proposals from 2018)

What do you need to know?

The aim is to significantly simplify the method of calculating charges for regimes within the Environmental Permitting (England and Wales) Regulations 2016 (EPR), including waste, water discharges and installations. This is similar to the charges related to the planning application process, where mineral developments pay more due to the associated complexities of mineral applications.

The new charges will be based on a modular approach, the “risk-based charging model”, no longer dependent upon an Opra profile for EPR installations, waste operations and mining waste activities. The new scheme also replaces the ‘Charges for discharges’ approach for surface water and groundwater discharges and the different charging provisions for Tier 2 activities, radioactive substances permits and flood risk activity permits. Applicants will pay for assessments depending on the permit required and any further assessments charges as additional components.

What Activities are included?
  • flood risk activities
  • groundwater activities
  • installations
  • mining waste operations
  • radioactive substances activities
  • waste operations
  • water discharge activities
  • medium combustion plant (expected to be included in EPR before 1st April 2018)
  • All the costs that are faced by regulating a certain activity have been considered. For example, a standard rules permit application which permits the acceptance of combustible wastes would include provision for a Fire Prevention Plan in the application fee.
     

    Charge typeCurrentProposed chargePrice difference
    High public interest£500 fixed fee charge
    (advertising only)
    Time and materials
    £100 per hour
    +/-
    (Application dependent)
    Waste Recovery PlanSubmission: Free
    Review: £350
    Submission: £1231
    Review: £1231
    Submission: +£1231
    Review: +£881
    Deposit for recovery SR permit
    (SR2015 No39)
    Application: £1950
    Subsistence: £2,040
    Variation: n/a
    Surrender: £540
    Application: £2641
    Subsistence: £2,909
    Variation: n/a
    Surrender: £1,585
    +£691
    +£869 (/year)
    n/a
    +£1,045
    Deposit for recovery Bespoke

    (200,000 tonnes)

    Application: c.£5,1601
    Subsistence: £6,570
    Variation: c.£4,200
    Surrender: c.£3,750
    Application: £9,207
    Subsistence: £6,715
    Variation: £4,604
    Surrender: £1585
    c.+£4,047
    c.+£145 (/year)
    c.+£404
    c.-£2165
    Inert LandfillApplication: c.£9,460
    Variation: c.£7,700
    Surrender: c.£6,875
    Application: £13,203
    Variation: £6,602
    Surrender: £7,922
    c.+£3,743
    c.+£1,098
    c.+1,047

    1Opra based, e.g. 200,000 t waste, medium sensitivity site

    What else?
  • Fixed costs will apply to defined permit types, variation and surrender will be a percentage of this;
  • For regimes which need more unplanned regulatory activity e.g. nuclear sites or novel activities, Time and Materials charges will be used and a cost estimate of fees;
  • Compliance scheme for good and poor operators will still apply;
  • Additional fixed charges will apply for consideration of site-specific assessments;
  • Additional requests for information (x3 or more on the same issue) will incur fixed charge of £1,200;
  • Return on applications not ‘duly made’ will be charged at 20% of the application rate, capped at £1,500;
  • A new ‘first year of operation charge’ of £672 will apply;
  • Non-planed compliance work to be billed at £84/hr (pollution incidents, Cat. 1/2);and
  • Charge for ‘high-risk’ closed landfill reviews (£2,559);
  • A full list of supplementary charges is set out in the associated Guidance to the EPR Charging scheme here.

    In relation to abstraction charging the EA has set out plans for a future reform of these charges that will accompany the forthcoming reform of the abstraction licensing regime. This is in addition to proposals to amend certain water abstraction charges from 1 April 2018. A future consultation will invite comments.

    Industry Reaction

    There are some significant charge increases proposed and we also now see the introduction of hourly charging for a range of other purposes and if normal fees are exceeded. If the charges are to increase, then the service levels must remain of a high quality. In turn, if this results in a more streamlined and transparent service from the Environment Agency, then the industry would willingly support such a move.

    A flat rate charge (c. £1.9k) will apply for Schedule 5 Notices issued for the same issue more than twice.  This could present an additional burden to novel applications.

    A key concern for the industry, particularly for time and expense applications, is that the new charging structure could lack transparency, with the Operator paying the price for internal inefficiencies.

    What does the future look like?

    Overall, simplification of the charges is a positive move, particularly if it means that a good level of service can be maintained.  Not all costs will go up and those sites that require greater effort will pay more.  The greatest impacts look likely to be seen in the landfill/waste deposit sectors.

    View the full consultation here.

     
    If you would like to speak to one of our team about what these changes may potentially mean to your operations, contact us.