Consultation on modernising environmental permitting for industry

As set out above, there are existing exemptions in the EPRs which facilitate experimentation and innovation at stand-alone R&D installations. The EA’s new standard rules also introduce a streamlined approach for approving R&D trials at installations which will not result in any significant emissions. However, R&D activity at installations which will result in any significant emissions will generally be subject to the full suite of permitting requirements.  

We are keen to consider alternative and more agile approaches which would ensure that R&D trials that involve some emissions (and therefore generally fall outside of EA’s standard rules), but which would lead to significant national environmental and health benefits if commercialised, can be more quickly approved while maintaining essential environmental and health protections and appropriate regulatory oversight. We are exploring this from the perspective of ‘industrial’ activities under the EPRs (see scope section on p.4), however we would ultimately seek to develop an approach which is consistent across different permitting regimes.  

The Corry Review recommended setting up a programme of regulatory sandboxes, which allow for experiments with regulatory change to help explore ways in which regulatory approaches could be modified without jeopardising environmental protections. The Review highlights successful sandboxes demonstrated by the Office for Nuclear Regulation and the Financial Conduct Authority. We would like to consider a sandbox-like approach for R&D and testing activity at permitted industrial installations. 

In the context of industrial emissions permitting, this could involve an agreement between the regulator and an operator that a time-limited R&D trial could take place with a significantly streamlined process for approving the trial and the waiving of certain permitting requirements, but subject to baseline conditions around safety, emissions control and monitoring being met (which would represent an agreed operating envelope for the trial). 

During the trial period there could be ongoing monitoring by the operator which would be shared with the regulator and the agreement to the trial would be paused immediately if emissions exceeded the agreed operating envelope. Data on environmental performance and emissions would be gathered throughout the trial which would be used, if the trial was successful and the operator wished to use the new product or process on a permanent basis, to inform the permit variation process. This data could also be used by the regulator to set wider sectoral standards, which would expedite permit approval for similar technologies. 

The permit variation process could begin during the trial period to ensure that long-term permission is in place by the end of the trial, where the results of the trial support this, and the regulator could have flexibility to extend the trial if required to ensure that the new product or process doesn’t have to be halted while permit approval is pending. 

In terms of a bespoke approval process, this could include: 

• agreement on required operating process and performance (an “operating envelope”) which would ensure that the main impacts would be managed, with an agreement that further information and monitoring data will be gathered during the trial period to ensure continued consideration of health and environmental impacts 

• a simplified approval process, with the expectation that the operator would provide the regulator with a proposal on the operating envelope set out above and how this would manage health and environmental impacts 

• a derogation from meeting specific emission limit ranges or other requirements set out in BAT conclusions or GET for the period of the trial (assuming that the product or process being trialled would lead to either a higher general level of protection of the environment and health than BAT, or at least the same level of protection and higher cost savings). At present, under the EPRs, regulators may grant temporary derogations from meeting BAT for emerging techniques for up to 9 months, however the EU recently extended this period to 30 months through its revised Industrial and Livestock Rearing Emissions Directive (IED 2.0) 

• ongoing supervision from regulators, with level of oversight determined by the level of risk from the trial and funded by fees paid by the operator based on the polluter pays principle 

Industry has also highlighted existing legal requirements on public disclosure of information on emissions as a concern for R&D in some sectors, as it can result in proprietary information being made public, which could undermine the economic case for conducting trials. The next section (‘Commercial confidentiality’) explores the issue of commercial confidentiality in the context of R&D trials in more detail. 

Regulators could be given constrained discretion to tailor these requirements according to the level of risk posed by a particular trial. For example, trialling or testing of hydrogen as a fuel could be subject to a lighter-touch process as there is sufficient existing evidence on likely impacts on NOx. By contrast, trials involving potential for emissions of more novel pollutants where evidence of harm is more limited would involve greater up-front assessment and ongoing supervision. 

While R&D sandboxes would necessarily carry some level of risk, as they are most applicable for fairly novel products or processes where evidence on emissions is more limited, certain safeguards would need to be in place, for example: 

• it must be a research and development trial which is demonstrably aimed at securing overall environmental improvement from the installation 

• pilot scale-based testing already carried out which demonstrates a baseline level of safety 

• the trial approval would be time-limited, with the potential to vary the length depending on the exact R&D activity proposed 

• some assessment should be made of the impact of the trial on relevant environmental quality standards and health-related limits such as environmental assessment levels 

• the regulator would have the ability to end trials if there is non-compliance with the agreed operating envelope 

It should be noted that our intention would be for any ’sandbox’ process to cover both EA and local authority regulated industries. 

We plan to further develop the sandbox concept before consulting on a detailed proposal. We would appreciate feedback on this concept as a whole and on the design of a bespoke R&D sandbox approval process, including what conditions could be put in place to manage risks.