Produced in partnership with Jonathan Darby of Thirty Nine Essex Street
1. Energy efficiency
Energy efficiency is very much at the heart of EU and UK energy policy. Indeed, the EU’s '20-20-20' targets set three key objectives for 2020, which include a 20% improvement in energy efficiency across the EU as a whole by 2020. The EU Energy Efficiency Plan 2011 sets out details of how the European Commission proposes to achieve this target, including through the use of numerous, more specific, directives.
Energy Performance of Buildings Directive 2010
The Energy Performance of Buildings Directive (Directive 2010/31/EU) is one such Directive and was aimed at improving the energy performance of all buildings, including those in both commercial and also residential use. From 1 February 2012, the Energy Performance of Buildings Directive required member states to ensure that new buildings, and large buildings which are subject to major renovations, meet certain minimum energy performance requirements. Such requirements have been implemented in the UK primarily through changes to the Building Regulations and monitored by increased availability of Energy Performance Certificates (EPCs).
The Energy Performance of Buildings Directive also introduced the now familiar concept of 'a nearly zero-energy building', defined as a building with very high-energy performance where any energy that is required is to be provided from renewable sources. The Energy Performance of Buildings Directive incorporated target dates for nearly zero-energy buildings, which for new buildings occupied and owned by public authorities is 31 December 2018 and for other new buildings is 31 December 2020.
Energy Performance of Buildings Regulations 2012, SI 2012/3118
Further to the above, the Energy Performance of Buildings Regulations 2012 came into force in January 2013 and, amongst other things, require commercial premises, and those visited frequently by the public, to publicly display an EPC. Potential issues may arise in establishing who is responsible for satisfying the duty in multi-let buildings given that the guidance merely states that the 'occupier' of the building is responsible.
Energy Efficiency Directive 2012
The Energy Efficiency Directive came into force on 4 December 2012 and introduced binding measures for energy efficiency on the public sector and industry. It sets objectives and targets to be achieved through more specific means in order to comprehensively cover the energy chain from generation through to end use. Member states were required to implement the Energy Efficiency Directive into national law by 5 June 2014.
The Energy Efficiency Directive is one of the key elements to the EU’s proposed achievement of the '20-20-20' targets. The Directive’s measures are subject to review by the Commission, which can introduce further requirements and legislation if it appears that the 2020 targets are likely to be missed. The Directive required member states to publish long-term strategies for mobilising investment in the renovation of residential and commercial buildings by 2014 and update them every three years as part of their National Energy Efficiency Action Plans (NEEAPs).
The Energy Efficiency Directive requires all large enterprises to undergo energy audits every four years. Small and medium-sized enterprises are excluded from this obligation although they are now encouraged to voluntarily undergo energy audits by the provisions of the Energy Efficiency (Encouragement, Assessment and Information) Regulations 2014. Furthermore, the Energy Savings Opportunity Scheme (ESOS) is now in force (from 17 July 2014) and requires larger companies and non-public sector organisations to carry out energy efficiency audits in order to identify opportunities for energy savings.
Further to the above, the Cabinet Office published Procurement Policy Note 07/14 implementing the Energy Efficiency Directive on 3 June 2014. Central government departments, agencies and non-departmental public bodies are now required to comply with the Directive’s energy efficiency standards when purchasing or renting buildings where the contract exceeds the thresholds in the Public Contracts Regulations 2006 (SI 2006/5).
Energy Efficiency (Encouragement, Assessment and Information) Regulations 2014
The Energy Efficiency (Encouragement, Assessment and Information) Regulations 2014 (SI 2014/1403) came into force on 26 June 2014.
The Regulations encourage small or medium-sized enterprises to voluntarily undergo energy audits. The Regulations also require action to remove barriers to energy efficiency, including by virtue of undertaking an assessment of the potential for high-efficiency cogeneration of heat and electricity, efficient district heating and cooling, and the recovery of industrial waste heat by 31 December 2015. Furthermore, information on energy efficiency mechanisms, their benefits and financing should be accessible in order to implement Articles 17(1) and 17(4) of the Energy Efficiency Directive.
The Green Deal is a government initiative being implemented by secondary legislation under the Energy Act 2011. For example, the Energy Act 2011 requires the Secretary of State to make regulations by April 2018 to ensure that landlords of domestic and non-domestic properties achieve a certain level of energy efficiency in private rented property in England and Wales. Landlords of the least energy efficient domestic and non-domestic properties will be obliged to consider implementing changes in order to improve energy efficiency from April 2018 onwards. See Practice Note: What is the Green Deal?
Energy Efficiency (Building Renovation and Reporting) Regulations 2014
The Energy Efficiency (Building Renovation and Reporting) Regulations 2014 came into force in the UK on 30 April 2014 and obliged the government to develop a long-term strategy for the renovation of residential and commercial buildings and a National Energy Efficiency Action Plan (NEEAP). The strategy and NEEAP are both to be updated and submitted to the Commission every three years. The Regulations also require the government to submit an annual report on progress towards meeting its national energy efficiency targets.
In light of the above, the government published its NEEAP in April 2014. A particular section of interest for present purposes is Annex B, which sets out the UK's Building Renovation Strategy and provides an overview of the energy efficiency performance of building stock, as well as policies designed to improve that performance in the future.
The Waste Framework Directive 2008 (Directive 2008/98/EC) is the key EU directive regulating waste. The Waste Framework Directive aims to protect human health and the environment and increase the economic value of waste. See Practice Note: Waste Framework Directive—Snapshot.
Waste Electrical and Electronic Equipment (WEEE)
The EU waste regime includes the waste electrical and electronic equipment (WEEE) regime, which aims to prevent electrical and electronic equipment waste and encourage its reuse and recycling. The WEEE regime places financial responsibilities on producers and distributors to pay for collection and disposal schemes as part of a range of 'producer responsibility schemes'. See Practice Note: WEEE Directive (recast)—Snapshot.
The WEEE Directive 2012 (Directive 2012/19/EU) fully replaced WEEE Directive 2002 (Directive 2002/96/EC) from 15 February 2014 and will extend the scope of the WEEE regime to cover all electrical and electronic equipment from 15 August 2018. Annex XII to the 2012 Directive contains a useful comparison between the provisions of the 2002 and 2012 WEEE Directives. The Commission is required to review and report on the extended scope by 14 August 2015.
In the UK, the WEEE Directive 2012 was implemented under the Waste Electrical and Electronic Equipment Regulations (SI 2013/3113) (the WEEE Regulations 2013), which largely came into force from 1 January 2014. The WEEE Regulations 2013 place a number of obligations on producers, particularly in relation to the financing of costs of the collection, treatment, recovery and disposal of WEEE. There are also provisions relating to producer compliance schemes, albeit with exemptions applicable to small producers. Further provisions will come into force on 1 January 2016 in relation to reporting by operators of approved authorised treatment facilities or approved exporters. Furthermore, WEEE requirements will be extended to all electrical and electronic equipment listed in Schedule 3 on 1 January 2019.
The Waste Electrical and Electronic Equipment and Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (Amendment) Regulations 2014 (SI 2014/1771) (the WEEE Regulations 2014) came into force on 25 July 2014 and make certain amendments to the WEEE Regulations 2013, notably creating penalties for offences under regulation 90.
It is also worth noting that the Commission published a Draft Directive proposing wide-ranging amendments to a number of waste-related directives, including Directive 2008/98/EC on waste, Directive 94/62/EC on packaging and packaging waste, Directive 1999/31/EC on the landfill of waste, Directive 2000/53/EC on end-of-life vehicles, Directive 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and Directive 2012/19/EU on waste electrical and electronic equipment. The Draft Directive includes proposals to amend the WEEE Directive 2012 in order to increase the scope and efficiency of extended producer responsibility schemes as well as simplifying reporting obligations. See Practice Note: WEEE Regulations 2013—key features.
3. Environmental reporting
Further to the above, it is relevant to note that the European Parliament and Council reached agreement in February 2014 on an amendment to existing accounting legislation in an attempt to improve the transparency of certain large companies (including listed companies and financial institutions with more than 500 employees) on social, environmental and diversity matters. In accordance with the proposed amendment, such companies will be required to disclose environmental information in their management reports. The amendments aim to minimise the resulting administrative burden by only requiring companies to disclose concise information about the performance and impact of their activities, rather than requiring the provision of a detailed report. The proposal also provides companies with flexibility in relation to disclosure of relevant information, including the choice of reporting standards. There are currently no proposals for the imposition of sanctions in relation to non-complying companies. See Practice Note: Mandatory environmental reporting.
The REACH regime (Registration, Evaluation, Authorisation and Restriction of Chemicals) regulates chemicals in the EU and was adopted in order to improve the protection of human health and the environment. The REACH Regulation 2006 entered into force on 1 June 2007 and its Annexes have been amended a number of times. The final registration phase is scheduled to end in 2018. See Practice Note: REACH Regulations 1907/2006—Snapshot
The REACH regime applies to all chemical substances and has an impact on many companies across the EU by establishing procedures for collecting and assessing information on the properties and hazards of substances. In particular, companies are responsible for collecting information on the properties and the uses of substances that they manufacture or import at or above one tonne per year in order to assess the associated hazards and risks.
For those with an interest in the REACH regime, it is worth noting that the European Commission and European Chemicals Agency (ECHA) has published a number of reports into its implementation, including a Commission report in February 2013 as to the need for reform of the EU regulatory regime. That report proposed a number of means of reducing the associated burden for small and medium-sized enterprises given that the regime places a fairly weighty burden of proof on companies. Nevertheless, such companies should be aware that the 31 May 2018 registration deadline for substances produced or imported in the EU over one tonne per year may prove particularly challenging given that many will fall within the registration process for the first time.
ECHA has recently produced a series of documents describing good practice on how to fulfil the REACH obligations. A series of shortened versions of the guidance documents are also available, which explain the main elements of the full guidance to industry managers and provide companies will an overview of different aspects of REACH. See Practice Note: REACH—registration.