In 2011/12, the Environment Agency set out a strategic approach where planned charges were set out for the three years to 2014/15. In this they proposed no increase to their baseline charger for at least the first two years with the possibility of a small increase in 2014/15.
This plan has been delivered and the Environment Agency have not increased baseline charges in the last two years. They achieved this through a rigorous and sustained efficiency programme – substantial savings were made by reducing their support service costs while preserving their front line services. Over this period high standards of service were maintained and improvements were delivered such as issuing most permits within 13 weeks.
However, two regimes (EPR Installations and EPR Waste Facilities), are currently not recovering the cost of providing the services. Therefore, despite the efficiencies, base charges must be increased equivalent to the latest Consumer Price Index (CPI) rate of 2.7% to maintain the service and adhere to treasury rules.
The Environment Agency have also proposed a small number of changes to existing chargers which will have a very limited impact on operators’ costs. These are:
Environmental Permitting
- To introduce changes to accommodate the new Industrial Emissions Directive (IED) Regulations.
- To introduce new charges for the assessment of R1 energy recovery activities. These charges will apply where the assessment and validation are made separately to any permit application. The proposed charges are: Initial assessment, when the request is made outside of the permit determination process £2000. Subsequent re-validation during operation of the facility £1000.
- To introduce a charge of £350 for any subsequent re-assessment of a waste recovery plan (to determine recovery or disposal) required during the operation of a permit.
- To introduce a capped annual fixed charge of £3,190, or the full subsistence charge if lower, for sites that are at the pre-construction phase for two years. This capped charge will apply if construction has still not started after two years from the date the permit was determined or April 2015 whichever is the later.
Abstraction Charges
The licensing of ‘New Authorisations’ (currently exempt abstractions) is a requirement under changes made to the Water Resources Act 1991 by the Water Act 2003. When the regulations come into effect in April 2014, the Environment Agency will be required to licence previously exempt abstractions (‘New Authorisations’) resulting in an estimated 5,000 additional licence applications over the following 2 years. Currently these applications will attract only the £135 application charge and no ongoing subsistence charge.
This presents a new, largely unfunded workload and therefore to help address this, the Environment Agency propose one of the following options:
- to introduce a new abstraction application charge of £1,500 for those permits where there is no requirement to pay ongoing subsistence charges, or
- to charge subsistence for all transfer licences in addition to the current application charge of £135.
Both of these options would take effect from 1 April 2014.
Emissions Trading Scheme
The Environment Agency acts on behalf of the Department of Energy and Climate Change (DECC) as the UK’s designated national authority for the Clean Development Mechanism and the UK’s designated focal point for Joint Implementation. They issue Letters of Approval for these projects and have a suite of application charges.
Currently applications for projects based in a Least Developed Country (LDC) as defined in regulations, have been exempt from this charge in line with a policy to support equitable distribution of finance from the carbon market. The Environment Agency are proposing to remove the LDC’s exemption from the charges from April 2014.
Please follow the link to gain more information about the Environment Agency’s charges and charging scheme: Link.