Peat Ban (England)

On 27th August 2022 the UK government announced that all sales of peat to amateur gardeners in England would be banned by 2024. The press release is here.

The press release states that “Bagged retail growing media accounts for 70% of the peat sold in the UK and is frequently misused, for example being used as a soil improver rather than a medium in which to propagate plants.”

This ban follows an extensive consultation that was held.

A ban for the professional horticulture sector will follow, but is not announced.

Natural England is working with Defra and partners on the ground to restore thousands of hectares of peatland habitats, and the press release states via round two of the Nature for Climate Fund Peatland Restoration Grant, Natural England awarded on 27th August nearly £11 million to six projects to support restoration works on over 7,000 hectares of peatland, adding to more than 8,000 hectares already funded through round one.

The press release states round two of the Restoration Grant has supported a blend of lowland and upland restoration works, with the Somerset Peatland Partnership convening to restore lowland sites in the south-west of England, and the Great North Bog and Moors for the Future partnerships restoring upland sites in the north of England.

Hydropower Producer Reporting (Norway)

On 13th July 2022 the oil and energy minister Terje Aasland tasked the Norwegian Directorate of Water Resources and Energy (NVE) to establish a reporting scheme for the large hydropower producers in Southern Norway. The press release is here.

This press release states (translated) – NVE will soon send a letter to Statnett and the power producers to establish the temporary reporting scheme for storage power in the price areas in southern Norway. The reporting will give Statnett, NVE and the Ministry of Petroleum and Energy a basis for assessing whether further measures are necessary to ensure security of supply in the winter and spring period 2022-23. The reporting scheme will initially last until the summer of 2023.

It is important that the power companies in southern Norway now withhold water that can be stored for the winter. I would like to emphasize that, as of today, there is a low probability of rationing in the spring. It is nevertheless important that we take the situation seriously. I do not want to rule out that it may be appropriate to introduce further measures, in which case it is important that the choices we make are well thought out. This reporting scheme will contribute to that, says Aasland.

On 8 August, Terje Aasland, told the Norwegian parliament that refilling dams will be prioritised over power production when levels fall below the seasonal average.

On 15 August, Terje Aasland gave an update – here. In this he states that the NVE has been asked to assess the scope for setting water storage restrictions in reservoirs serving hydropower plants, and Statnett has been asked to provide weekly assessments. He also states that a separate management mechanism will be established to ensure that more water is saved in the reservoirs at low water levels and that the export of power is limited in such cases.

Relevant laws will be added to Norway systems.

German Gas Savings Plan (Germany)

Germany aims to cut energy use by 20% this winter. It’s government has this week adopted a set of immediate short-term and medium measures as a series of Ordinances. The measures amount to 2% to 2.5% gas savings, according to Robert Habeck, minister of economy and climate action. We will add the relevant Ordinances to systems as they are updated.

Although Germany is required to save around 15% as per EU rules, the government estimates that 20% of gas use must be cut to make it through the coming winter without a gas shortage.

The German Embassy has issued this image of some of the short-term energy-saving measures that came into force from yesterday (1 September) in Germany. The short term measures will last six months. The 2-year long medium term measures are planned for 1 October.

Pension Scheme Climate Focus (UK)

Yesterday (1st September 2022) the UK government commenced a consultation on obliging trustees of the £342bn Local Government Pension Scheme (LGPS) in England and Wales to report and address climate risks in the assets they manage. The consultation document is here.

This continues the climate focus commenced in 2021 across the UK for larger private sector occupational pension scheme trustees. The resulting Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 (and similar in Northern Ireland) are in your systems (in ENV Energy), and there is an Audit Checklist question also. October will add an amendment to the Regulations in Britain. The statutory guidance for these obligations is here.

[you will note that certain larger UK private companies also have climate reporting obligations, which were enhanced this year, these instruments are in your Registers, as are the Audit Checklist questions]

After the phasing-in, in respect of the private (Occupational Pension) funds, the climate focus will extend to trustees of money purchase and non-money purchase schemes with £1bn or more in “relevant assets”. It will also include trustees of all authorised master trusts and authorised schemes (once established) providing collective money purchase benefits, in both the accumulation and decumulation phases. You are advised to re-check if the climate focus applies to the pension scheme in your organisation.

The (Occupational Pension) statutory guidance states – “To meet the requirements imposed by the Climate Change Governance and Reporting Regulations 2021, trustees should have a good understanding of the climate-related risks and opportunities that are relevant to their scheme. Trustees should understand that as a systemic risk, climate change risk could include risks outside of the obvious sectors, including those which are both directly and indirectly affected.”

And “Trustees have a legal duty to consider matters which are financially material to their investment decision-making. Trustees must not only consider the kinds of financial risks which might affect investments (and in the case of DB schemes, their liabilities and sponsoring employers’ covenant), they should consider where climate change, and action to address climate change, might contribute positively to anticipated returns or to reduced risk.”

And “Climate-related risk and opportunity is one of the major categories of financial factors of which trustees need to take account. Trustees also need to take account of other risks affecting the pension scheme, in line with their fiduciary duty. As such, trustees are expected to take a proportionate approach to managing climate-related risks and opportunities. The time spent by trustees on considering climate-related risks and opportunities, should not come at the expense of considering other major risks, including financially material social and governance factors.”

The government proposal for the LGPS scheme takes as it’s starting point the above Occupational Pension trustee obligations, but hints at extending it with more specificity on fund investment.

For example, the consultation document points to the UK Energy Security Strategy published in April 2022 (which highlighted energy investment opportunities for the private sector to improve energy security and support the transition to clean energy). The consultation document states the LGPS has an important role to play as a major investor with a commitment to stewardship and engagement.

The consultation document states “These proposals seek to support that approach to addressing high carbon emissions and discourage any pursuit of lower emissions through withdrawing investment from energy companies.”

Another difference with the private sector scheme is the proposed requirements will apply to all LGPS AAs (fund managers) from 2023/24 regardless of fund size. Currently the assets held by LGPS funds range from around £0.5 billion to £25 billion with 65 funds holding less than £5 billion and 8 funds holding less than £1 billion.

It is also proposed that data quality is a mandatory metric (for reporting). The consultation states this is in order to help the LGPS use its scale and market power to drive improvements in the quality of emissions data, which will be a critical factor in raising the quality of climate risk management.

Statutory guidance will be produced. Consultation closes on 24th November 2022.

UK BAT (UK)

Industrial installations undertaking specific types of activity are required to use ‘best available techniques’ (BAT), which means the best economically and technically viable techniques to prevent, minimise and reduce emissions to air, water, and land.

BAT is used to determine the types of abatement technologies and methods that operators should put in place. BAT conclusions describe the best techniques and associated emission levels, which are the basis of the limits placed within environmental permits.

The UK Government, the Scottish Government, the Welsh Government, and the Department of Agriculture, Environment and Rural Affairs (DAERA) are putting in place a new regime for the development of ‘BAT’ across the United Kingdom (UK), following the UK’s exit from the European Union (EU).

Northern Ireland – any ‘Best Available Techniques’ determined in Northern Ireland will need to ensure account is taken of the Northern Ireland Protocol, which requires some specific activities that interact with the Single Electricity Market to continue to align with the EU Industrial Emissions Directive (IED).

BAT was adopted and applied across the European Union (EU) by the European Commission as BAT Conclusions (BATC) under the IED (Directive 2010/75/EU).

Existing EU BATC continue to have effect in the UK through the EU Withdrawal Act 2018. They are available in best available technique reference documents or BREFS.

The UK no longer needs to meet the requirements of new EU BATC issued after 31 Dec 2020.

30 August 2022 – Policy Paper – here.

BATC will be published as statutory instruments and used as the basis for permit conditions for industry.

The UK BAT system will take between 1 to 3 years to create a set of BATC depending on the complexity of the industrial sector. The order of BATC to be reviewed will be announced in advance.

UK BAT will be established by technical working groups (TWG) for the relevant industrial sectors.

The first 4 industry sectors to establish BATC groups will be:

1 Ferrous metal processing – galvanising (FMPG).

2 Ferrous metals processing – forming (FMPF).

3 Textiles (TXT).

4 Waste gas treatment in the chemicals sector (WGC).

The TWG’s will be established from September 2022. It is anticipated that the BATC for the industry sectors above will be published in the second half of 2023.

A new governance structure will also be established, with new independent bodies – called the Standards Council and the Regulators Group – consisting of government officials and expert regulators from all four nations of the UK.

A UK Air Quality Governance Group will also be established to oversee the work of the Standards Council and the delivery of the requirements under this new framework. Interested parties from industry, academia and civil society will be able to engage in the running of the BAT system through an advisory group being set up by the UK BAT Team.

Local councils currently play a major role in regulating industrial installations in England and Wales and have a clear interest in the impact emissions have on the health of local communities and the environment. The new regime will bring local councils into the BAT framework for the first time by involving them in the governance and standard-setting processes.

Some sectors in the UK had already begun a separate review process under the old EU BAT framework. These sectors will complete the BAT process, drawing on UK data submitted to the EU as a starting point, then tailor the BAT to meet UK circumstances.

Corporate Sustainability Reporting Directive (EU)

The EU Corporate Sustainability Reporting Directive (CSRD) will amend the 2014 EU non-financial reporting directive. It will introduce more detailed reporting requirements and ensure that large companies are required to report on sustainability issues such as environmental rights, social rights, human rights and governance factors.

The CSRD will also introduce a certification requirement for sustainability reporting as well as improved accessibility of information, by requiring its publication in a dedicated section of company management reports.

The European Financial Reporting Advisory Group (EFRAG) will be responsible for establishing European standards, following technical advice from a number of European agencies.

EU rules on non-financial information apply to all large companies and all companies listed on regulated markets. These companies are also responsible for assessing the information at the level of their subsidiaries.

The rules also apply to listed SMEs, taking into account their specific characteristics. An opt-out will be possible for SMEs during a transitional period, meaning that they will be exempted from the application of the CSRD until 2028.

For non-European companies, the requirement to provide a sustainability report applies to all companies generating a net turnover of €150 million in the EU and which have at least one subsidiary or branch in the EU. These companies must provide a report on their ESG impacts, namely on environmental, social and governance impacts, as defined in this directive.

Application will take place in three stages:

• 1 January 2024 for companies already subject to the non-financial reporting directive

• 1 January 2025 for large companies that are not presently subject to the non-financial reporting directive

• 1 January 2026 for listed SMEs, small and non-complex credit institutions and captive insurance undertakings.

Further information is here, including the link to the CSRD itself.

Office for Environmental Protection (England and NI)

The Office for Environmental Protection (OEP) was established by the Environment Act 2021 and its remit covers England and Northern Ireland. The OEP has now published its work programme for its first year, and also its Strategy and Enforcement Policy.

The work programme is here.

The Strategy and Enforcement Policy is here.

The OEP’s role is to hold government and other public authorities to account for their environmental commitments in environmental law.

The documents published clarify that the OEP will monitor and report on a wider set of targets that fall under the definition of environmental law, rather than just those that come under the Environment Act 2021, to pursue its objective of sustained environmental improvement. The OEP will also look at the landscape of international environmental targets, assess progress towards these and use this evidence to flag any potential gaps in government’s targets as part of OEP monitoring and reporting on environmental improvement plans and the implementation of environmental law.

The way in which OEP can take public authorities to court differs in England and in Northern Ireland. In England, the statutory process is ‘environmental review,’ which is a bespoke process available to the OEP, the detail of which is set out in the Environment Act. In Northern Ireland, the OEP can take public authorities to court through making a ‘review application,’ which is a challenge by way of judicial review. The OEP has reviewed its enforcement policy to ensure that the differences between these two procedures are highlighted in the appropriate places.

The OEP is only able to take enforcement action in situations where public authorities are alleged to have failed to comply with environmental law. Environmental law means any legislative provision to the extent that it is mainly concerned with environmental protection. In considering whether law is environmental, the OEP will assess whether the relevant individual provision in question is mainly concerned with environmental protection. The OEP’s enforcement policy is updated to further explain the meaning of environmental law in this context.

UK REACH (Britain)

On 30th June 2022, the various organisations involved published their rationale for prioritising substances within the UK REACH programme 2022-2023. This document is here.

Priorities are established for 2 types of activity in UK REACH:

• Restriction – a mechanism that can lead to controls on the use of a substance or group of substances

• Regulatory Management Options Analysis (RMOA) – analysis produced by HSE and/or the Environment Agency to understand the risks of using a substance, or group of substances, and make recommendations for managing them.

The following are 5 priorities –

1 Per- and polyfluoroalkyl substances (PFAS) – acting on the recommendations of an ongoing RMOA, due for publication in summer 2022

2 Intentionally added microplastics – an evidence project on identifying and managing the risks they pose

3 Formaldehyde and formaldehyde releasers in articles – an RMOA to review the evidence base and evaluate a potential restriction

4 Bisphenols in thermal paper – an RMOA to review the evidence base and evaluate a potential restriction

5 Hazardous flame retardants – reviewing and updating the existing evidence on potential environmental risks, to feed into wider chemicals policy.

In addition, the HSE is running a number of calls for evidence in relation to additions to the Annex 14 (UK Authorisation List). Addition to the List means prior authorisation is needed to use, or place on the market, the relevant substance, after the specified sunset date.

Note – the DEFRA Secretary of State, together with Welsh and Scottish Ministers will need to authorise any decision.

The HSE link is here.

UKCA marking (Britain)

The UK Conformity Assessed (UKCA) mark is the new mandatory mark on a large number of manufactured goods to indicate that they conform to legislation enacted in Westminster for Britain (GB).

Businesses have until 1 January 2023 to start using UKCA marking which replaces EU marking.

On 20th June 2022, the then UK government announced that conformity assessment activities undertaken by EU bodies before the end of 2022 would be considered as the basis for UKCA marking in 2023.

That UK government announced that legislation on this would be brought forward before the end of 2022 to enable manufacturers to apply the UKCA mark on these products without the need for re-testing.

The purpose of this new legislation (if enacted) would be to allow CE marked products that are manufactured and imported into the UK by the end of 2022 to be sold, without the need to meet UKCA requirements. This would remove the current need for retesting and recertification for products that are imported whilst the UK recognised CE requirements. 

The 20th June 2022 announcement also states the UK would continue to accept spares onto the GB market which comply with the same requirements that were in place at the time the original products or systems they were being used to repair, replace or maintain were placed on the market.

Legislation would also be brought forward to extend current labelling easements to allow important information and other UKCA markings to be added to products using a sticky label or an accompanying document.

In addition, the 20th June 2022 announcement states that manufacturers of construction products under AVCP system 3 – such as radiators, sealants and tile adhesives – whose products are tested by an EU notified body before 1 January 2023 would be able to obtain a UKCA mark without having to retest through a UK-approved body.

The 20th June 2022 announcement is here.

The business sectors that these measures apply to include:

• aerosols

• electrical and electronics

• equipment for explosive atmospheres

• pyrotechnics

• gas appliances

• lifts

• machinery

• outdoor equipment

• personal protective equipment

• toys

• pressure equipment

• civil explosives

• recreational craft

There are different rules for:

• medical devices

• construction products

• cableways

• transportable pressure equipment

• unmanned aircraft systems

• rail products

• marine equipment