Environmental Permitting (England and Wales) (Amendment) Regulations 2023
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Lord Benyon
That the Grand Committee do consider the Environmental Permitting (England and Wales) (Amendment) Regulations 2023.
Relevant document: 47th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, I beg to move that the Environmental Permitting (England and Wales) (Amendment) Regulations 2023, which were laid in draft before the House on 28 June, be approved. They amend part 2 of Schedule 9 to the Environmental Permitting (England and Wales) Regulations 2016. The Government committed to amending these regulations in the response to the 2021 consultation on the extended producer responsibility for packaging—EPR—scheme to obtain enhanced packaging waste data from materials facilities. The EPR scheme will move the cost of dealing with waste generated by households from local taxpayers and councils to businesses that handle and use packaging, making producers responsible for the packaging that they place on the market.
In 2020, Defra undertook a post-implementation review of part 2 of Schedule 9 to the Environmental Permitting (England and Wales) Regulations 2016. The review included a recommendation to explore the connections between materials facilities’ data reporting and the EPR scheme, and concluded that Defra would consider amending the regulations. These amendments will improve the quality and quantity of packaging waste data that materials facilities are required to collect, record and report. In turn, this will support fair and accurate cost assessments and payments through the EPR scheme.
I now turn to the details of this instrument. These amendments to the regulations will introduce enhanced sampling, recording and reporting requirements for materials facilities and increase the type of facilities in scope of the regulations. Materials facilities will be in scope of the amended regulations if they receive and manage at least 1,000 tonnes of household or household-type material a year for the primary purpose of reuse and recycling. The sampling requirements will include a higher input sampling frequency and more material categories for facilities to sample and report against. Materials facilities will also need to separately measure, record and report against packaging and deposit return scheme material proportions. This data will support packaging composition calculations or exemptions under EPR. The enhanced recording and reporting requirements will require materials facilities to provide more information on waste suppliers and samples taken, as well as to report all raw data to regulators to support improved analysis.
To give an example of this in practice, my local council, West Berkshire, contracts Veolia, a waste management company, to perform household waste collections. When a Veolia truck picks up household waste and delivers it to a materials facility for reuse and recycling, that facility will sample the waste so that we know how much of it is EPR packaging material and how much is newspapers and magazines, deposit return containers, contamination or other non-packaging materials. The waste collected by Veolia from neighbouring councils or from its own commercial contracts with businesses would be sampled separately. This will help ensure that the EPR payments to my local council reflect the quality and quantity of packaging materials collected from households. This will provide valuable new information to help my local council optimise waste collection operations and, through EPR payments, provide a new means to incentivise councils to improve performance and ensure that producers get good value for money.
We consulted industry through the 2021 EPR consultation and continue to engage with the waste sector on these new legislative requirements and the implementation of the wider collection and packaging waste reforms. We have also published guidance on these requirements and will work closely with the Environment Agency to support facilities in preparing to meet the new requirements over the next year.
The Environmental Permitting (England and Wales) Regulations 2016 detail the regulatory functions available in monitoring and enforcing these regulations. These amending regulations apply to England and Wales only; Scotland and Northern Ireland are aligned in our policy intent regarding bringing in enhanced materials facility sampling requirements and waste data reporting to support EPR. My officials have worked closely at an official level with the relevant departments in the devolved Administrations in the development of this legislation.
These measures will be crucial for providing a mechanism to obtain the enhanced data on packaging and waste management services needed to achieve the effective implementation of EPR and realise the associated environmental benefits. I commend these draft regulations to the Committee. I beg to move.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I thank the Minister for his overview of this statutory instrument. I am very grateful for the detail. As your Lordships’ House will be aware, there was much discussion in the other place about the detail of this SI and its financial impact. Although I do not wish to rerun the debate, it would be helpful to the Committee if the Minister could provide us with a little more information.
Paragraph 7.2 of the Explanatory Memorandum notes that a post-implementation review of the original 2016 regulations “was completed in 2020”, and it made a number of recommendations about changes to the regulations. Other than the need to make this change to support the rollout of extended producer responsibility for packaging, why has it taken the department three years to bring the instrument forward? Are any other changes due and, if so, when can we expect to see them?
A key justification for this instrument is that new data will improve quality monitoring and the consistency of recycling collections. There remain, however, substantial differences between recycling collections across different parts of the country, and we know that work on new schemes, including the deposit return scheme for plastic bottles, is behind schedule. Given the complexity, why have these workstreams not been given greater priority?
Paragraph 7.11 of the Explanatory Memorandum notes that all material facilities must
“comply with the regulations from 1 October 2024”.
Can the Minister outline what steps would be taken if material facilities are found not to be complying?
During debate in the other place, it was made clear that stakeholders are concerned about the lack of clarity regarding the implementation of the new regime. Paragraph 11.1 states that guidance is forthcoming, but it would be fair to say that the Government have an occasionally poor track record on providing timely guidance. Can the Minister commit to a fixed date to reassure the sector? Also highlighted in the House of Commons was a survey that found that over half of recycling facilities lacked the space to undertake the enhanced sampling required under these regulations. What kind of advice or support is Defra providing? If there are extra costs, either in relation to these checks or arising from the need to store data for longer, where will they fall?
Finally, I wonder whether the Minister can build on the discussion in the other place and the comments from the noble Baroness, Lady Bakewell, regarding the lack of an impact assessment and the discrepancy in views between stakeholders and the department, with some material facilities suggesting that 80 new staff will have to be employed, at a cost of £1 million a year. What additional conversations has the department had, what reviews are being put in place to judge the impact and what are the timescales for these? I look forward to hearing from the Minister.
Lord Benyon (Con)
I thank the noble Baronesses for their interest in this. I am delighted that the noble Baroness, Lady Bakewell, is a waste nerd. Her social life is fascinating—having dinners discussing this—and I will seek to answer in a way that respects her genuine expertise. She is absolutely right that consumers will play a key role. In a way, this also responds to what consumers are demanding. When I was a councillor, my local authority recycled and diverted away from landfill approximately 17% of waste. I am glad to say that the administration who took it over raised the rate of diversion away from landfill to 90%. Householders are determined that the circular economy described by the noble Baroness should be relevant to their lives. They object dramatically to the idea that waste diverted from landfill goes to other countries, so we want to make sure that we are creating a circular economy in this country and that there are markets for the amount of waste produced.
The noble Baroness is right that we are increasing the amount we require to be checked to 60 kilograms per 75 tonnes. After close consultation and discussions with experts and local authorities and working with materials facilities operators, we think that is realistic and will give us the data we require to have a really clear view of what is being provided by these facilities. I cannot tell her what percentage will be separated waste and what will be mixed waste because different local authorities have different contracts and arrangements, but I assure her that we are involved in a detailed level of engagement and that issues such as the EPR administrator are fundamental to making sure that this progresses.
Both noble Baronesses raised the question of deposit return schemes. Noble Lords will be aware that we want to try to align our deposit return scheme across the United Kingdom, if possible. That has required us to talk closely to Scotland—which has, frankly, messed it up—and we now seem to be in a position to take forward, by some point in 2025, an effective and meaningful deposit return scheme that will deliver a massive environmental benefit. I am reminded that the plastic bag levy has seen a reduction in the use of plastic bags of more than 95%. We think that a properly structured deposit return scheme should have only a marginal inflationary effect and should incentivise people to be part of a scheme that will see a dramatic reduction in waste.
The noble Baroness, Lady Anderson, touched on the timescale of the deferral. The deferral does not apply to all obligations and requirements under EPR. The start of producer payments under EPR will be deferred by 12 months. This addresses another point made by the noble Baroness, Lady Bakewell. Producers obligated under EPR are still required to collect and report data as per existing regulations. We need this data to develop and then share estimated EPR fees. Gathering and sharing this information will help businesses prepare for these changes, and it is something that businesses have asked for. EPR payments deferral will also impact on some specific timelines, including the introduction of modulated fees and binned packaging waste fees and payments.
We are concerned about cost, and our response to the consultation on the EPR scheme included an impact assessment, which has been referred to and which covered the expected costs to materials facilities. As we developed the amending legislation, the definition and types of materials facilities that would be in scope were clarified. As a result, we updated our assumptions regarding the number of facilities that would be in scope from 739 to 159, reducing the sampling burden where possible. Using these updated numbers, we have estimated a lower cost associated with this legislation.
This is really important: the costs associated with the new requirements within this SI were found to be lower than previously estimated in the impact assessment produced for the EPR scheme. Although the scope has reduced, the methodology to estimate the impact on the materials facilities of enhanced sampling remains unchanged from the previously published EPR impact assessment.