Environment weekly news round up - 31 May 2024
Welcome to the latest edition of our weekly Environment Law news update. As ever, we bring you developments, insights, and analysis in the world of environmental law.
Consultation to include landfill Emissions in the UK Emissions Trading Scheme
In July 2023, several changes to the UK Emissions Trading Scheme (UK ETS) were confirmed to align it with the government’s net zero objectives. In response to this proposal, stakeholders requested also to include measures to avoid “landfill leakage”. This term refers to the potential for waste to be diverted to landfills or even sent abroad to circumvent the regulations of the UK ETS.
Landfill emissions have been a concern for environmentalists and industry experts alike. The process of waste decomposition in landfills releases harmful greenhouse gases, contributing to global warming. By including these emissions in the UK ETS, the government aims to incentivise waste management companies to adopt greener practices.
To address these concerns, the government has now published a consultation on expanding the UK ETS to cover waste incineration, which will be used to gather views on the feasibility and effectiveness of this proposal. This consultation explores various mitigation measures to manage waste exports and prevent landfill leakage. It also seeks input on how to best implement the inclusion of landfill emissions in the UK ETS.
The consultation provides that the inclusion of waste incineration in the UK ETS will have a phasing period from 2026 in which emissions need to be reported, but there will be no obligation to purchase UK ETS allowances until 2028.
The consultation period is open until 18 July. This provides an opportunity for industry experts, environmentalists, and the public to voice their opinions and contribute to shaping the future of the UK’s emissions trading.
Two further consultations are expected to be published on expanding the UK ETS to the domestic maritime sector, and on recognising non-pipeline methods for transporting captured CO2 (i.e. road, rail, or shipping).
Carbon on the Line: How Market Volatility Challenges Climate Change Mitigation
A new report from Ecosystems Marketplace (30th May 2024) has highlighted a contraction in the voluntary carbon market (VCM) for the second consecutive year which reveals both the challenges and evolving dynamics within this sector as well as climate change implications.
The VCM functions on a global scale providing a platform for entities around the world to purchase carbon credits voluntarily. These credits are typically generated from projects that reduce, avoid or sequester emissions of greenhouse gases in one location to offset emissions occurring elsewhere.
In the UK the VCM operates as part of a global marketplace where carbon credits can be purchased by individuals, corporations and governments to offset their carbon emissions. In the UK participation in the VCM is not mandated by law but is pursued by entities seeking to meet their voluntary climate commitments or enhance their environmental credentials. It is more often used in the UK by entities wishing to offset more than their mandatory requirements or by those not covered by compulsory schemes. Unlike the UK Emissions Trading Scheme which is mandatory for certain sectors and industries with penalties for non-compliance. The UK ETS is specifically designed to help the UK meet its carbon budgets and international commitments under the Paris Agreement. The VCM is much broader in scope and often includes projects with additional social and environmental benefits such as biodiversity conservation and community development. Whilst it is not a substitute for direct emission reductions through regulatory frameworks like the UK ETS it plays a supportive role in helping the UK meet its climate change obligations.
The Ecosystems Marketplace Report found a worrying 56% decrease in overall transaction volume from 2022 with REDD+ credits showing a decrease in value year over year. Renewable energy credits also declined although less steeply with this being attributed to a reduction in credit supply and a shift away from projects with questionable additionality.
However, despite the overall downturn certain segments of the market did exhibit growth illustrating the complexities of a maturing market amid increasing climate ambitions from the private sector. Notably projects delivering co-benefits for nature and communities grew to comprise 28% of the market share, reflecting a rising buyer preference for high quality credits. In addition, credits from energy efficiency, fuel switching, community renewable energy and agriculture projects saw an increase in transactions during 2023.
Alex Procton of Ecosystem Marketplace emphasised that the VCM is undergoing a significant transition focusing on project additionality, integrity and environmental and social co-benefits and that the shift is reshaping the supply of credits from various project types and regions.
However, as highlighted by Dee Lawrence of the High Tide Foundation the concerns raised by the Report from Ecosystem Marketplace about the contraction in the VCM have significant implications for climate change efforts on a global basis as the significant drop-in market activity as pointed out by Dee Lawrence took place during what was the hottest year on record and the ever-growing distance from achieving climate goals on a global scale.
A contraction in the VCM can lead to decreased funding for projects designed to reduce, avoid, sequester greenhouse gas emissions. Many of these projects such as re-forestation and renewable energy initiatives are crucial in the fight against climate change. Amongst other factors, the lack of clear and universally accepted standards and methodologies in the VCM can lead to uncertainty about the actual climate benefits of purchased credits and with stakeholders facing uncertainty without clear regulations and standards being in place it adds to the slowdown in funding for new and existing projects.
However, despite these concerns the current challenges also present opportunities to strengthen the role of VCM’s in climate action if there were to be both in the UK and globally an introduction of more rigorous standards to improve the quality and reliability of carbon credits ensuring that they contribute effectively to emission reductions. There also needs to be increased transparency and accountability in how carbon credits are generated and used to help rebuild trust and encourage more stakeholders to invest in the market.
In summary, while there are significant concerns related to the current state of the VCM and its implications for climate change addressing these issues could lead to a more robust and effective market.
Anglian Water convicted of failing to provide requested information
The Environment Agency (EA) have found Anglian Water guilty of failing to provide requested records to them, as required by the Environment Act 1995.
The EA has initially launched an investigation in 2021 into all ten water companies for potential non-compliance with environmental permit conditions at more than 2,000 wastewater treatment works. As part of this investigation, the EA used their powers under section 108 of the Environment Act 1995 to request information be provided to determine whether provisions of pollution control enactments were being, or had been, complied with.
Failure to provide such requested information is an offence under section 110 of the Environment Act 1995, unless the party has a reasonable excuse.
The EA had charged Anglian Water for three counts of failing to provide requested information and Anglian Water entered a not guilty plea for all three charges, claiming they had a reasonable excuse for non-compliance. However, they were found guilty on one of these three charges.
The case has now been adjourned until 5 July when a sentencing hearing will take place at Peterborough Magistrates’ Court.
