HC Deb 20 July 2004 vol 424 cc301-10

Motion made, and Question proposed, That this House do now adjourn.—[Gillian Merronj]

8.57 pm
Alistair Burt (North-East Bedfordshire)(Con)

I am grateful to you, Mr. Deputy Speaker, for the opportunity to raise in the House the case of my constituent, Ross Donovan, who I believe has lost his business as a result of negligence and carelessness by the Environment Agency and the Department for Environment, Food and Rural Affairs. I am pleased that the Minister for the Environment and Agri-environment is in the Chamber because he has taken a personal interest in the matter and has met my constituent and me. I hope that he will be in a position to shed some light on my remarks.

Ross Donovan is a chartered engineer by profession and he is 45 years old. He has a degree in mechanical engineering, a masters degree in manufacturing management and is a member of his professional body, the Institution of Mechanical Engineers. I suggest, therefore, that he is a man of some competence and reliability.

Ross Donovan's work in industry has taken him to several different businesses, but some years ago he worked for Silver Spoon on an energy recovery system and developed a specialty in such matters. Aware of legislation such as the Producer Responsibility Obligations (Packaging Waste) Regulations 1997, the climate change levy and landfill tax, together with the rising cost—in all senses of the word—of fossil fuels, he was persuaded that a new market existed for alternative heating systems. He believed that some businesses with heating needs could use their cardboard packaging, otherwise treated as waste, as a fuel. As many businesses used baling machines to achieve volume minimisation of their cardboard waste, it made sense to design a system that could process such standard sized bales. The system would not be a substantial size, but modest and small scale.

In simple terms, Ross Donovan set out to design a machine that would burn bales of cardboard and use the heat generated to warm a space that required it. Accordingly, he raised money from sponsors to back up his idea and constructed a prototype.

Aware of the regulatory nature of incineration issues, Mr. Donovan sought the advice of the Environment Agency in Brampton, Cambridgeshire. On 14 February 2001, he wrote to it and said: Further to our recent conversations I wish to confirm that it is our intention to site a prototype waste—to—energy

plant at the above location. The plant is fuelled by packaging waste such as paper, cardboard and possibly wood and is designed to have a maximum net thermal input of 395 kW. I have now studied Statutory Instrument 2000 … The Pollution Prevention and Control (England and Wales) Regulations 2000 and believe that the above plant is outside the scope of this document. Please can you confirm this is true? He concluded:

Additionally is there any other legislation that the waste—to—energy plant

is required to comply with? Your prompt attention to this matter would be appreciated. On 28 February 2001, Mr. Donovan received a reply. It mentioned the need to comply with the Environmental Protection Act 1990, the Pollution Prevention and Control (England and Wales) Regulations 2000 and the Waste Management Licensing Regulations 1994, and Mr. Donovan was invited to complete a form to return to Brampton under the latter regulations so that The Agency will note your details on the public register". There was no mention of something called the waste incineration directive. Based on the letter and the legislative requirements of which he was aware, Mr. Donovan constructed a prototype system. It burned bales of cardboard and provided cheap heating for about 6,000 sq m of glasshouses in a horticultural nursery.

The Environment Agency was approached a number of times to seek guidance on different issues regarding the operation of the system. Mr. Donovan keeps meticulous notes, as we would expect from his background and qualifications, and believed the Environment Agency was well aware of what he was testing and developing—after all, he was on a register. Indeed, in June 2002 the system was consuming so much cardboard that he needed a new source of supply and he approached the Environment Agency, as it was likely to be aware of where he could source it, and it duly obliged.

In November 2002, Mr. Donovan visited a trade show at Olympia and met a Scottish company dealing in woodchip-based energy systems. During their conversation, the company raised the waste incineration directive. Mr. Donovan looked at the website of the Scottish Environment Protection Agency. From that site, he felt reassured that the waste incineration directive applied only to larger incinerators than his, but he decided to double check and spoke to the Environment Agency. He was told not to worry as his system was below the threshold limit—in effect, too small.

By July 2003, the system was good enough to be marketed and after all the time and effort Mr. Donovan put in, after applying for and being granted five patents, he received firm orders for two machines, but only, said the purchasers, if the system was waste incineration directive approved. On 24 July 2003, he had a meeting with Environment Agency officials. He took with him all the specifications and technical details and the matter was discussed between experts in some detail. He left that meeting with a verbal assurance that, as previously advised, his system was outside the scope of the directive because it was too small. As his purchaser wanted that advice in writing, the Environment Agency said that it would write, checking with its policy unit based in Bristol.

On 13 August 2003, the Environment Agency wrote the letter that has cost Mr. Donovan his job, his savings and his business. It said that directive 2000/76/EC on the incineration of waste did indeed apply. What were the practical consequences of that? In effect, it required modifications to be made of such scope that the economics of his small-scale business went out the window. For example, the system used a manual firing process. Colloquially put, someone put their hand in, lit a handful of waste paper and, when up and going, the cardboard fuel could be fed in. The regulations indicated that that was not possible and that an expensive gas-firing system should be fitted instead. There were other such modifications.

Compliance with the directive would make Mr. Donovan's small-scale incinerator uneconomic and he faced ruin. He contacted the Environment Agency again, trying to seek clarification. Was this true? How far did he have to comply? Was there any leeway for this system, so much smaller than the major incineration systems, presumably the target of the regulations? The Environment Agency in Cambridge, with which he had been in contact throughout, had little firm knowledge of the situation and was unsure whether the regulations were in place, but the policy unit had told it that there was no de minimis rule, so no system was too small to be covered.

My constituent came to see me. He could not understand why the Environment Agency had given him no notice of the likely impact of the directive. After all, he was on a register at its insistence. He was also keen to discover whether there was a way out. Were the rules final, and was there anything that the Government could do for him? He sought help from the Environment Agency and the Department for Environment, Food and Rural Affairs, which had become involved as it had issued the guidance on applying the policy. However, he did not receive any; he was simply told that the directive must apply.

The de minimis issue, however, remained open, as no one was prepared to confirm that it was completely out of the question. That gave him hope, and he made repeated requests for DEFRA or Environment Agency officials to come and see his system. They did not do so until November, and Mr. Donovan tells me that that was only after I had made some phone calls on his behalf. He says that the officials seemed unaware of the commercial implications of their delay. While they equivocated about advice on a directive to which he had drawn their attention, he was trying to sell an energy system that was flawed, although no one could tell him just how badly. Regrettably, I can confirm my constituent's complaint. I spoke to officials, and afterwards understood why he was concerned as they could neither give a clear answer as to whether his system was covered by the regulations, nor tell him when they might he certain.

I wrote to the Minister for the Environment and Agri-environment on 23 October 2003 questioning what had happened and looking forward to efforts to find a way out for my constituent. I received a holding reply, then a further reply on 16 November saying that a full reply would follow once officials had visited the site. The Minister finally gave a reply on 1 January 2004. This is not a case in which time did not matter. Mr. Donovan's business was at stake, and I was regularly in touch with the Minister's office seeking a reply. I think that they could all have moved faster.

The Minister was good enough to agree to a meeting with my constituent and officials on 29 January 2004. To his credit, Mr. Donovan was less concerned about how we had reached the current position than with trying to find a way forward. We expected the Minister and his officials to be as helpful as possible. Could UK officials for once interpret a directive as helpfully as possible for UK manufacturers, rather than find reasons to say no? Mr. Donovan took with him an environmental consultant, Simon James, who asked if virgin cardboard could be used as a fuel without being subject to the regulations. He was informed by officials and the Minister that it could. He then asked whether, if that same cardboard had been previously used or if virgin cardboard was unsuitable for its intended use, it would be allowable as a fuel outside the regulations. He was told that if the intention was to discard the cardboard, it would be waste and thus subject to the regulations. Mr. James suggested that there may be no intention to discard the cardboard, but to segregate it specifically for the alternative use of energy production. As it was intended to be used for energy production, it should fall outside the definition of waste. The Minister agreed to look at the proposal and said that he would seek advice. To reinforce the case, on 27 February Ross Donovan sent the Minister a copy of a letter from Simon James restating his argument.

We heard nothing from officials or the Minister for a month. On 26 February, I tabled a series of written questions; on 3 March, I wrote to the Minister again, forwarding a copy of Simon James's letter. On 15 March I faxed to the Minister a copy of a letter from Caroline Jackson, MEP, with an idea on the subject. I was faxed a copy of the Minister's reply to her, but I did not receive a reply to my own letters. To date, Simon James has not received a considered opinion on his proposed solution, and Ross Donovan has not received a reply to his letter of 27 February. Yesterday, four and a half months after my letter of 3 March, I received a faxed copy of the Minister's reply—conveniently, a day before this Adjournment debate, and after the Minister had been notified of it.

During that official silence, Mr. Donovan could not sell his system. Sponsors withdrew funding and took the intellectual patents from Mr. Donovan. He lost his business, his idea and his savings. It is now time to ask the hard questions that have been avoided while my constituent struggled to keep his business going. Why was he not told by the Environment Agency at the earliest possible stage that the directive might affect him? His letter of February 2001 was a clear request for information from those who might have been expected to hold it. It was not as if they did not have such information. According to the Minister's letter to me of 1 January 2004, the consultation on the directive was launched in July 2002. We know that those consultations do not come out of thin air. The directive in draft had been around a good length of time, and the Environment Agency knew of Mr. Donovan's interest and had registered it.

As for the de minimis point, the Government, according to the Minister at our meeting in January 2004, were discussing de minimis with Commission officials in 2001, and arguing for it, I believe. If that was the case, why was my constituent not made aware of the issue under discussion when he raised a general query in February 2001 or when he made a more specific inquiry in November 2002? Why were such high hopes placed on the argument?

I spoke last week to Karl Heinz Zirrock in Directorate C, Environment and Health, of the European Commission. He told me that the discussion had gone on for years. There had never been any intention of a threshold, small incinerators had always been a target of the regulations, and the Commission wanted to close them, leaving open for research only experimental testers burning less than 50 tonnes of material a year—a long way from even Mr. Donovan's small-scale commercial system. Mr. Zirrock said that all officials in member countries should have been well aware of those discussions. So why was my constituent not told?

There are three aspects to this shambles. First, there is clear evidence to suggest that the Environment Agency or DEFRA or both were at fault in not informing my constituent of the likely impact of the waste incineration directive at a time when he could have taken a completely different course of action from the one that he took. Secondly, when he tried to get information from officials to help him move forward, or even some clear decision when the problem of the directive had been made clear, he did not receive it. He found officials slow, indecisive and unhelpful.

Thirdly, when matters came to the Minister, there were extraordinary delays in letters, despite faxed messages emphasising the need for speed of response as a family's livelihood depended on it. There was a failure to reply to suggestions on a way forward and a general lack of enthusiasm from DEFRA or the EA even to try something sensible as a way forward, in terms of a redefinition of waste and fuel, which might have been of benefit to Mr. Donovan and would have made a difference to the way in which cardboard packaging is dealt with in an environmentally advantageous manner.

I am not arguing for special dispensation for my constituent or, tonight, for a redefinition of the directive that would have suited his system, although I think there is more than common sense in the proposal from Simon James. There may have been nothing that could be done to amend the directive, but my constituent, fatally, was not told until it was too late. The impact on him has been dreadful and unacceptable. It is with some regret that I initiate this debate. I have been a Minister and I know that errors and problems can occur, but this appalling catalogue of error, delay and indifference, which has cost a professional man dearly, cannot be swept under the carpet without explanation or apology. I call on the Minister to provide both.

9.13 pm
The Minister for the Environment and Agri-environment (Mr. Elliot Morley)

The hon. Member for North-East Bedfordshire (Alistair Burt) has made a comprehensive case on behalf of his constituent. He knows that at our meeting I made a genuine attempt to address his constituent's concerns. As he said, Mr. Donovan proposed an innovative design for burning bales of cardboard. We in the Department for Environment, Food and Rural Affairs recognise that energy from waste has a role in the waste hierarchy. It comes below recycling, but we recognise the role that it can play in waste disposal.

I shall try to deal with the detail of the hon. Gentleman's argument. He is certainly entitled to an explanation and I hope that I can provide that tonight. If there have been any failings on the part of DEFRA, he is owed an apology. I am not sure that there have been any failings on the part of DEFRA, although the hon. Gentleman is free to pursue the detail of my remarks at the end of the debate.

I am informed that Mr. Donovan wrote to the Environment Agency in February 2001. He sought confirmation that his proposed plant fell outside the scope of the Pollution Prevention and Control Regulations 2000, as the hon. Gentleman stated. The agency confirmed that the plant would not need a permit from the agency under those regulations because it fell below the 1 tonne-per-hour capacity threshold.

Mr. Donovan also asked in his letter whether his proposed plant would need to comply with any other legislation. He was informed that it would need registration as an exempt activity under the Waste Management Licensing Regulations 1994. The advice that he received was in direct response to his questions and was consistent with national legislation as it then stood.

On 4 November 2002, Mr. Donovan phoned the Environment Agency to ask whether its technical guidance documents on waste incineration covered his proposed plant. He was told that the agency's technical guidance documents on waste incineration did not because his plant was below the 1 tonne-per-hour capacity threshold above which agency regulation would apply under the pollution prevention and control regulations as they then stood.

Directive 2000/76/EC on the incineration of waste was finalised on 4 December 2000, and member states had until 28 December 2002 to transpose it into national legislation. The waste incineration directive places stringent design, operational and monitoring requirements on the incineration plant that it covers, together with stringent emission limit values for a range of pollutants. The directive has the stated aim of preventing or limiting, as far as is practicable, negative effects on the environment and resulting risks to human health from the incineration of waste.

In June 2002, my Department issued a consultation paper on the implementation, asking for responses by 9 September 2002. The waste incineration regulations for England and Wales were finalised in the light of those responses and came into force on 28 December 2002. They have the effect of applying the waste incineration directive's requirements to all incineration plant as defined in the directive, regardless of capacity—so there was no de minimis.

On 16 January 2003, my predecessor gave a news conference to publicise the transposition of the directive. Draft guidance on the directive and its requirements was published by my Department on 7 February 2003. The consultation document and draft guidance were placed on my Department's website and sent in hard copy to organisations that were known to have an interest. Unfortunately, as my officials were not at that time aware of Asgard Systems Ltd., those documents were not sent direct to that company.

Alistair Burt

The Minister is explaining where the legislation was at each particular stage, but he has not explained this: even though the directive was not in force, it was known about. The agency officials with whom Mr. Donovan was dealing must have known about that directive, so they must have been able to connect what they knew that he was doing, because he had given them full information about it in 2001, with the proposed directive that had been sealed in 2000 but had not yet come into effect. Mr. Donovan and I have never understood why that connection was not made. The agency answered his questions, but did not go wider when he asked for guidance on what other legislation might affect him. That is not good enough.

Mr. Morley

The hon. Gentleman will understand that I cannot speak for the agency. All I know is that Mr. Donovan asked several questions of the agency and was given answers in line with the legislation that applied at the time.

On 24 July 2003, Mr. Donovan met Environment Agency officials to talk about regulatory requirements applicable to his plant. As the waste incineration regulations had by then come into force, he was informed that the plant was likely to be subject to those requirements. That was confirmed in a letter from the agency dated 13 August.

Incidentally, the agency has a complaints procedure by which any complaint from Mr. Donovan about the advice that he received would be investigated if he chose to make one. The hon. Gentleman might like to bear that in mind.

Following my receipt in October 2003 of a letter from the hon. Gentleman about Asgard, my officials, accompanied by an official from the Environment Agency, visited Mr Donovan's premises to examine the plant. At the beginning of January 2004, I wrote to the hon. Gentleman to explain that the plant is considered to be an incineration plant and is therefore subject to the waste incineration directive's requirements. My officials had already written to Mr. Donovan on 16 December informing him of that. They reached that conclusion because of the presence of design features, such as an ash screw and a primary air fan, that are consistent with the description of a technical unit included in the directive's definition of incineration plant.

I understand the point that the hon. Gentleman made about the definition of waste. The cardboard for which Mr. Donovan's plant was intended does not arise as a by-product from a manufacturing process. As the hon. Gentleman rightly said, if it were such a by-product, it might be treated somewhat differently. It comes, however, from the use of cardboard as packaging. Once the cardboard has served its purpose, the holder discards it and it is therefore considered to be waste under the definition in the waste incineration directive, which in turn is taken from the waste framework directive of 1975 as amended in 1991. The European Commission is currently developing a thematic strategy on the prevention and recycling of waste. We and others have raised the issue of the definition of waste, although the basic definition, as it applied to Mr. Donovan, is unlikely to change.

The hon. Gentleman wrote a letter to me in March, in which he passed on some of Mr. Donovan's comments about the definition of waste. I wrote back to the hon. Gentleman in April on this matter. As I said in my letter, the ruling of the European Court of Justice in April 2003 deals with the determination of whether a process used for dealing with waste is disposal or recovery, rather than whether a material is waste according to the definition of waste. Indeed, that was something that Christopher Booker, in his comments in The Sunday Telegraph, got completely wrong.

Mr. Eric Martlew (Carlisle) (Lab)

That is not unusual.

Mr. Morley

As my hon. Friend says, that is not unusual at all. Indeed, there is a great deal of inaccuracy in most things that that gentleman says in his column.

Alistair Burt

The Minister referred to a letter that he wrote to me in April. I have here a copy of the letter that I was faxed yesterday, and it is dated July. It begins: Thank you for your letter of 3 March 2004 which followed my meeting with you on 29 January 2004. Please accept my apologies for the delay in responding to you. It makes no mention of a further letter in April.

Mr. Morley

I noticed that the copy letter that the hon. Gentleman received was dated July. July was the date on which it was sent from the office in the past few days, in response to a query from his own office as to whether it had received a letter. It is not impossible that that letter might have gone astray. All I know is that I remember signing that letter around April, and its being processed at that time. Mistakes happen, however. I do not know the circumstances here, but it might be possible that that letter has gone astray. That would be very unfortunate in the circumstances, but these things happen.

The ECJ case, which was mentioned by the environmental adviser that Mr. Donovan brought with him, is not relevant to whether cardboard packaging is waste: it is, and the waste incineration directive therefore applies. Mr. Donovan also drew attention to an ECJ case in 2002 known as Palin Granit. Again, my advice is that it is not correct to interpret that as meaning that cardboard packaging segregated for use as a fuel should not be regarded as waste. The ECJ Palin Granit case referred to materials produced in a manufacturing or extraction process. While the Court held that in certain circumstances such materials could be regarded as by-products rather than waste, in Mr. Donovan's case the cardboard has come from the activity of using cardboard as packaging, not from a manufacturing or extraction process. So that is a completely different ruling in a completely different case. The plant's intended use therefore brings it within the scope of the waste incineration directive, which applies regardless of the capacity of the incinerator.

Mr. Donovan was informed, when he came to talk to my officials and me, that his plant could burn certain vegetable wastes from forestry, agriculture and food production, because those are exempt from control under the directive. Wood chipping is a case in point, for example. It may be that the plant has a niche for use in those circumstances, although other regulatory controls may still apply. The burning of fibrous vegetable waste from the production of paper from pulp is also exempt. However, I am afraid that that exemption does not extend to burning waste cardboard. Although recent developments in European legislation allow the incineration of packaging waste with energy recovery to count towards packaging waste recovery targets, recycling is our preferred means of dealing with waste cardboard. We encourage and welcome innovatory ways of dealing with waste, but it is essential that such approaches are capable of meeting regulatory requirements. I am genuinely sorry that Mr. Donovan's innovation apparently was not.

I asked officials to do all that they could to examine whether there were ways of assisting Mr. Donovan, which might account for some of the delays—there were complicated legal issues in terms of interpretation—and I am sorry that, in the end, that was not the case. Obviously, I will be only too happy to respond to the hon. Gentleman if he has any further queries in relation to this case. I very much hope that he will accept that while I cannot speak for the Environment Agency in terms of all those procedures, I do not believe that there was any form of deliberate attempt to obstruct Mr. Donovan. As far as my office is concerned, I genuinely believe that when I asked officials to do all that they could to see whether they could assist, they did so. In the end, the regulations were clear, and no more could be done in this case.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past Nine o'clock.