Consultation on Draft Regulations to implement Article 30 of Council... 2012/18/EU on the control of major-accident hazards involving dangerous

Consultation on Draft Regulations to implement Article 30 of Council... 2012/18/EU on the control of major-accident hazards involving dangerous

Consultation on Draft Regulations to implement Article 30 of Council Directive
2012/18/EU on the control of major-accident hazards involving dangerous
substances, amending Council Directive 96/82/EC
This consultative document is issued by the Health and Safety Executive in
compliance with its duty to consult under section 50(3) of the Health and Safety at
Work etc Act 1974.
Comments should be sent to:
Karen Tollet
Health and Safety Executive
5.S.2 Redgrave Court
Merton Road
Bootle
Merseyside L20 7HS
Email: [email protected]
to reach there no later than 18 October 2013
The Executive tries to make its consultation procedure as thorough and open as
possible. Responses to this consultation document will be lodged in the Health and
Safety Executive's Knowledge Centre after the close of the consultation period
where they will be made available to members of the public.
Information provided in response to this consultation, including personal information,
may be subject to publication or disclosure in accordance with the access to
information regimes (these are primarily the Freedom of Information Act 2000
(FOIA), the Data Protection Act 1998 (DPA) and the Environmental Information
Regulations 2004 (EIR)). Statutory Codes of Practice under the FOIA and EIR also
deal with confidentiality obligations, among other things.
If you would like us to treat any of the information you provide, including personal
information, as confidential, please explain your reasons for this in your response. If
we receive a request under FOIA or EIR for the information you have provided, we
will take full account of your explanation, but we cannot give an assurance that
confidentiality can be maintained in all circumstances. An automatic confidentiality
disclaimer generated by your IT system will be disregarded for these purposes.
Requests for confidentiality should be made explicit within the body of the response.
HSE will process all personal data in accordance with the DPA. This means that
personal data will not normally be disclosed to third parties and any such disclosures
will only be made in accordance with the Act.
1
Contents
Page
How to Respond......................................................................................................... 3
What happens next? .................................................................................................. 3
How your responses will be handled .......................................................................... 4
Contacting HSE if you have a query or a complaint ................................................... 4
Summary.................................................................................................................... 5
Background and Questions ........................................................................................ 5
Why is COMAH being amended? .............................................................................. 6
Guidance and awareness-raising activities ................................................................ 7
Implementation date................................................................................................... 8
Consequential planning amendments ........................................................................ 8
Statutory requirement for a review of the regulations ................................................. 9
Which employers will be affected by the change to COMAH for HFO?...................... 9
What is the likely impact of the proposed change to COMAH Regulations for
HFO? ....................................................................................................................... 9
Annex A.................................................................................................................... 12
Annex B.................................................................................................................... 15
Annex C ................................................................................................................... 29
2
Consultation by the Health and Safety Executive
The Health and Safety Executive has a statutory duty to consult stakeholders to seek
their views on its proposals. It believes that public consultation provides an open and
transparent approach to decision-making. Following consultation, the Health and
Safety Executive will make a recommendation to the Secretary of State on the best
way forward.
How to Respond
A summary of the proposal and the questionnaire can be found at
www.hse.gov.uk/condocs in line with the Government’s expectation that consultation
will be ‘digital by default’. You do not have to use this questionnaire, and you are
welcome to comment on any issue raised by this document, but if you could answer
the questions raised and provide additional information in the same order as the
questionnaire, this would help us in our analysis and help ensure that all your
comments are taken on board.
You can:
•
•
•
Complete the online questionnaire; or
Respond by email – to [email protected]; or
Respond on paper – you can do this either by:
○
Printing the online questionnaire; or
○
Making a written response in whatever format you wish.
Send your completed response to:
Karen Tollet
Health and Safety Executive
5.S.2 Redgrave Court
Merton Road
Bootle
Merseyside L20 7HS
We would be grateful if you could send an email address when you provide your
response, so that we inform you of when the HSE intends to publish information
concerning consultation responses on the HSE website.
Responses must be received by 18 October 2013.
What happens next?
We will acknowledge all responses and give full consideration to the substance of
arguments in the proposals; we may contact you again if, for example we have a
query in respect of your response.
We will tell you when the HSE will publish information concerning the consultation
responses. We will provide a summary of those who responded to this consultation
and we will produce a summary of the views expressed to each question; this
information will be placed on the HSE’s website.
3
How your responses will be handled
We will acknowledge all responses and give full consideration to the substance of
arguments in the development of proposals.
Contacting HSE if you have a query or a complaint
HSE follows the Government’s Consultation Principles https://www.gov.uk/government/publications/consultation-principles-guidance
If you are not satisfied with the way this consultation exercise has been conducted,
please either write to:
Teresa Farnan (HSE Consultation Coordinator)
Health and Safety Executive
7th Floor, Caxton House
Tothill Street
London
SW1H 9NA
Or send an email to [email protected]
We aim to reply to all complaints within 10 working days.
4
Summary
1.
The Health and Safety Executive (HSE) is proposing to amend the Control of
Major Accident Hazards Regulations 1999 (COMAH) to implement Article 30
of Council Directive 2012/18/EU to categorise heavy fuel oils (HFO) as
‘petroleum products’. This will have the effect of changing HFO
categorisation from its current status of ‘Dangerous for the Environment
(DFE)’ to ‘Petroleum Products’, thereby increasing significantly the qualifying
threshold inventories before the requirements of COMAH become applicable.
The inventories for lower tier and top tier sites will increase from 100t to
2,500t and from 200t to 25,000t respectively.
2.
This amendment is effectively an interim measure until the changed
requirements of HFO are captured in COMAH 2015 which will be introduced
on 1 June 2015 to implement Seveso III in full.
3.
A result of the proposed amendment to COMAH is that a consequential
amendment to planning regulations [Planning (Hazardous Substances)
Regulations 1992] will be made, increasing the controlled quantity of HFO for
which the planning requirements become applicable from 100 tonnes to 2,500
tonnes.
4.
This Consultation Document seeks views on:
•
•
•
Whether the proposed regulatory amendment (see Annex A) enables
businesses to identify what they need to do
Whether stakeholders are content with the proposed approach for
handling Article 30 of Seveso III (i.e. by the proposed regulatory
amendment to COMAH)
The initial assessment of the costs and benefits of the proposed
change as set out in the Impact Assessment (see Annex B)
5.
The consultation questions are set out together at Annex C.
6.
This consultation relates to Regulations that will apply in England, Scotland
and Wales. Governments in Northern Ireland and Gibraltar will prepare
proposals for implementing the Directive in their respective administrations.
Background and Questions
7.
The Seveso II Directive (96/82/EC), implemented in GB through COMAH and
specific planning legislation, aims to prevent on-shore industrial major
accidents and limit consequences to people and the environment. Application
depends on inventories of dangerous substances. Petrochemical and
chemical manufacturing industries are routinely in scope, but other sectors
such as large scale fuel, gas and chemical storage and distribution,
pharmaceuticals and metal manufacturing can also be subject to COMAH.
COMAH applies at 2 levels – Top Tier (TT), with the most stringent
requirements, and also Lower Tier (LT). The tiers are based on inventory
levels, which vary depending on the hazardous nature of the chemicals.
5
8.
Heavy fuel oil (HFO) is a generic term used to describe a range of blended
products based primarily on the residues from distillation or cracking units in
oil refinery processes. There are currently 41 EC-numbered entries (i.e.
official number of the substance within the European Union) in the list of
harmonised classifications found in the European Regulation on the
Classification, Labelling and Packaging of Substances and Mixtures – known
as the CLP Regulation - the list can be found in Table 3.2 in Part 3 of Annex
VI of the CLP Regulation 1272/2008. HFO is a viscous liquid petroleum
residue used predominantly in power stations, manufacturing and marine
transport; it is also used as a primary fuel for industry in remote off grid
locations as well as a back up fuel elsewhere, for example for boilers in
hospitals and industrial laundries. Following changes in 2009/10 to its hazard
classification (to ‘very toxic to aquatic organisms’), HFO became classified as
‘Dangerous for the environment’ (DFE). This classification corresponded to
threshold quantities of 100 tonnes LT and 200 tonnes TT. These thresholds
are much lower than would be justified by the major accident hazard the
substance presents. This increases the range and number of sites coming
into scope, including sites not usually considered to represent a major
accident hazard such as hospitals, industrial laundries etc.
9.
The new Seveso III Directive (2012/18/EU, Article 30) adds HFO to the
‘Petroleum products’ category, with significantly higher and more
proportionate threshold quantities at 2,500tonnes LT and 25,000tonnes TT.
Most of Seveso III will be implemented in the UK by 1 June 2015, but Article
30 amends Seveso II and requires implementation by 15 February 2014. This
follows recognition in Europe the DFE qualifying inventory thresholds under
Seveso II are unreasonable and need to be rationalised.
10.
HSE proposes implementing Article 30 by way of an amendment to COMAH.
This amendment will follow normal approval/clearance procedures. The
Seveso Directive applies across the UK. Northern Ireland and Gibraltar will
need to amend guidance and legislation as necessary.
Question 1
(a)
Is the use of the term ‘heavy fuel oil’ (HFO) in the regulations understood by
UK stakeholders?
Yes
No
(b)
If No, please explain why not
Why is COMAH being amended?
11.
Article 30 of the Directive must be implemented in all Member States from 15
February 2014. The EC does not accept ‘non-legislative means’ as
appropriate for the implementation of Directives. The option of delaying
legislative implementation until the rest of Seveso III is implemented on 1
June 2015 was considered. However, this could continue the existing
6
uncertainty among stakeholders and would carry the potential risk in the
interim of the regulator being obliged to take enforcement action against dutyholders coming into scope of COMAH by dint of the much lower DFE
thresholds which apply currently in law. By implementing a change to
COMAH from 15 February 2014, everyone will be clear on where they stand
legally, the reduced burden on industry will be enshrined in law and the UK
will avoid the potential financial and reputational risk of infraction.
12.
A draft of the proposed amendment to COMAH is at Annex A.
Question 2
(a)
Are you content with the proposed approach for handling Article 30 of Seveso
III (i.e. by the proposed regulatory amendment to COMAH)?
Yes
No
(b)
If No, please explain why not
Question 3
(a)
Does the proposed regulatory amendment to COMAH enable you to identify
what you need to do?
Yes
No
(b)
If No, please explain why not
Guidance and awareness-raising activities
13.
The amendment to COMAH will be accompanied by supporting information
published on the HSE website. We will aim to publish HSE’s guidance twelve
weeks before the implementation date i.e. 22 November 2013.
Question 4
(a)
Is posting information on the HSE website an appropriate and sufficient way
to share information and raise awareness for stakeholders affected by the
change to COMAH?
Yes
No
(b)
If No, please explain why not.
7
Question 5
(a)
Apart from our partners in the COMAH competent authority (the Scottish
Environment Protection Agency, Environment Agency and Natural Resources
Wales) and Government organisations that produce guidance dealing with
land-use planning matters, are there other organisations that HSE should
seek to work with to ensure that their guidance on HFO is up to date?
Yes
No
(b)
If Yes, which other organisations should HSE seek to work with?
Implementation date
14.
The date of implementation specified in the Directive for Article 30 is
15 February 2014 and this is the proposed date for commencement of the
COMAH amendment for HFO. We will aim to publish HSE’s guidance twelve
weeks prior to this on 22 November 2013.
Question 6
(a)
In your opinion, could the proposed implementation date have any unintended
consequences for UK stakeholders involved with heavy fuel oil?
Yes
No
(b)
If Yes, please explain what these might be.
Question 7
(a)
Do you consider the proposed regulatory amendment to COMAH will be
beneficial to companies that are 'small' (i.e. 50 or fewer employees) or 'micro'
(i.e. less than 10 employees)?
Yes
No
(b)
If No, please explain why not.
Consequential planning amendments
15.
The change to HFO qualifying inventories under COMAH means that
consequential amendments are needed to planning regulations. These will
increase the controlled quantity at which the requirement to obtain hazardous
substances consent will apply from 100 tonnes to 2,500 tonnes. In England,
the Department for Communities and Local Government will update planning
guidance to highlight the change to hazardous substances authorities.
8
Scotland and Wales will make appropriate changes within their own planning
regimes.
16.
It is possible that hazardous substances consents will have been obtained for
HFO that in future will be unnecessary. Hazardous Substances Authorities
may consider the revocation of such consents.
Question 8
(a)
Are you aware of any sites which have a hazardous substances consent for
HFO that would no longer be required as a result of the changes?
Yes
No
(b)
If Yes, please say how many sites are involved and whether they are in
Scotland, England or Wales
Question 9
Do you have any comments on the effect of the change to requirements for planning
hazardous substances consent?
Statutory requirement for a review of the regulations
17.
The regulations will include a requirement on the Secretary of State to review
the impact of the regulations.
Which employers will be affected by the change to COMAH for HFO?
18.
See table below:
The change to COMAH regulations will apply to:
Employers who hold less than 2,500t of HFO. They will fall out of scope of the
COMAH regime (unless they fall within it for other reasons).
Employers who hold 2,500t or more, but less than 25,000t, of HFO. They will fall
under COMAH as ‘lower tier’ sites (unless they are top tier sites for other reasons).
As such, they will be required to comply with the relevant duties within the COMAH
Regulations.
Employers who hold 25,000t or more of HFO will fall under COMAH as ‘top tier’
sites. As such, they will be required to comply with the relevant duties within the
COMAH Regulations.
What is the likely impact of the proposed change to COMAH Regulations for
HFO?
19.
HSE uses an Impact Assessment to assess and understand both the costs
and benefits of all new regulations and amendments to regulations. An
9
important part of the impact assessment is the cost-benefit analysis which
identifies the costs and benefits of a proposal and quantifies, in monetary
terms, as many of them as is feasible.
20.
An initial impact of the options considered in preparing this proposal has been
prepared and included at Annex B to this Consultation Document. The final
stage Impact Assessment will aim to provide more robust detail of the impacts
of meeting Article 30 requirements. The final version of the assessment will
reflect revisions to the proposal and take into account any further evidence
provided from the consultation process.
21.
HSE has sampled, informally, several companies and groups to obtain a
picture on the potential costs and benefits the proposed change to COMAH
for HFO will bring to UK industry. The companies sampled were:
•
•
•
•
•
•
•
22.
a number of whisky manufacturers (about 4 companies representing
approx 50 manufacturing sites, only a minority of which are/ would be
COMAH sites)
about 5 manufacturers across the food and engineering sectors,
representing around 40 sites (same COMAH proviso as above)
A major organisational group with a range of companies across several
technical, engineering, materials etc businesses - however only their
existing top tier sites had sufficient quantities of HFO
A rural/ semi rural NHS Trust with around 40 sites, however none uses
sufficient quantities of HFO to attract regulation under COMAH
a fuel storage company with 3 sites in the UK, specialising in marine
oils; all sites will be affected by either coming into scope or changing
tier status
Trade associations representing HFO suppliers were contacted. One
association’s member companies were already top tier and would
remain top tier due to their inventories of other dangerous substances
(for example oil refineries) – implying no impact for them.
Also, DECC produces an annual Digest of UK Energy Statistics. It
includes statistics for demand of different petroleum products including
HFO. This indicates the key sectors using HFO are, in priority order,
shipping, power stations, industry, and public administration.
The data available on potential impact is very sparse. HSE has estimated,
notionally, there may be a minimum of 50 sites affected by the changes
proposed (20 marine fuel suppliers, 14 power stations and 16 other industrial
sites).
Question 10
(a)
Do you agree with the Impact Assessment (Annex B)?
Yes
No
10
(b)
If No, please provide information about what data (or data sources) would be
better
Question 11
(a)
Are you currently subject to the COMAH regulations, but you will not be
subject to them when the new thresholds apply (i.e. you 'drop out' of COMAH
regulation)?
Yes
No
(b)
If Yes, what difference per year (in money, time), if any, will dropping out of
scope of COMAH mean for your organisation?
Question 12
(a)
Are you currently subject to COMAH regulations at top tier, but will drop to
lower tier when the new thresholds apply?
Yes
No
(b)
If Yes, what difference per year (in money, time), if any, will moving from top
tier to lower tier mean for your organisation?
11
Annex A
STATUTORY INSTRUMENTS
2014 NO.XX
HEALTH AND SAFETY
TOWN AND COUNTRY PLANNING, ENGLAND
The Heavy Fuel Oil (Amendment) Regulations 2014
Made
-
-
-
-
xx
Laid before Parliament
Coming into force -
xx
-
15th February 2014
The Secretary of State makes these Regulations in exercise of the powers conferred by sections 15(1), (2)
and (3)(a) and 82(3) of, and paragraph 1(1)(b) of Schedule 3 to, the Health and Safety at Work etc. Act
1974(a) (“the 1974 Act”), sections 5 and 40 of the Planning (Hazardous Substances) Act 1990(b) and
section 2(2) of the European Communities Act 1972 (“the 1972 Act”)(c).
In doing so the Secretary of State gives effect without modifications to proposals submitted to him by the
Health and Safety Executive under section 11(3)(d) of the 1974 Act after consulting in accordance with
section 50(3)(e) of that Act, and it appearing expedient to him after consulting such bodies as appear to
him to be appropriate in accordance with section 80(4) of that Act.
The Secretary of State being a Minister designated for the purposes of section 2(2) of the 1972 Act in
relation to measures relating to the prevention and limitation of the effects of accidents involving
dangerous substances(f), makes the following Regulations:
Citation and commencement
1. These Regulations may be cited as the Heavy Fuel Oil (Amendment) Regulations 2014 and come into
force on 15th February 2014.
(a)
1974 c.37; section 15(1) was inserted by the Employment Protection Act 1975 (c.71); section 15(1) was further amended by S.I.
2002/794.
(b) 1990 c.10.
(c) 1972 c.68.
(d) Section 11(3) was amended by the Legislative Reform (Health and Safety Executive) Order 2008 (S.I. 2008/960).
(e) Section 50(3) was amended by the Employment Protection Act 1975 (c.71), Schedule 15, paragraph 16(3); it was further amended by
the Health and Social Care Act 2012 (c.7), Schedule 7, paragraph 6.
(f) S.I. 1998/1750.
12
Amendment to the Control of Major Accident Hazards Regulations 1999
2.—(1) In Part 2 of Schedule 1 (named substances) of the Control of Major Accident Hazards
Regulations 1999(a) in column 1 of the table after “(c) gas oils (including diesel fuels, home heating oils
and gas oil blending streams)”, insert—
“(d) heavy fuel oils”.
Amendment to the Planning (Hazardous Substances) Regulations 1992
3.—(1) In Part A of Schedule 1 (named substances) of the Planning (Hazardous Substances) Regulations
1992(b) for item 36 (petroleum products) after “(c) gas oils (including diesel fuels, home heating oils and
gas oil blending streams)”, insert—
“(d) heavy fuel oils”.
(2) This regulation applies in relation to England only.
Review
4.—(1) The Secretary of State must from time to time—
(a) carry out a review of regulation 2 of these Regulations,
(b) set out conclusions of the review in a report, and
(c) publish the report.
(2) In carrying out the review the Secretary of State must, so far as is reasonable, have regard to how
Article 30 of European Parliament and Council Directive 2012/18/EU on the control of major accident
hazards involving dangerous substances (“the Directive”)(c) is implemented in other member states.
(3) The report must in particular—
(a) set out the objectives intended to be achieved by Article 30 of the Directive and by regulation 2 of
these Regulations,
(b) assess the extent to which those objectives are achieved, and
(c) assess whether those objectives remain appropriate and, if so, the extent to which they could be
achieved with a system that imposes less regulation.
(4) The first report under this regulation must be published before the end of the period of five years
beginning with the day on which these Regulations come into force.
(5) Reports under this regulation are afterwards published at intervals not exceeding five years.
Signed by authority of the Secretary of State for Work and Pensions
Name
Parliamentary Under Secretary of State
Department
Address
Date
(a)
(b)
(c)
S.I. 1999/743. Schedule 1 to those Regulations has been amended by S.I. 2005/1088.
S.I. 1992/656. Schedule 1 to those Regulations has been substituted by S.I. 2009/1901. Other amendments have been made to
Schedule 1 to those Regulations by S.I. 1999/981 and S.I. 2010/1050, but are not relevant to these Regulations.
O.J. L 197, 24.7.2012, p.1.This directive amends and subsequently repeals Council Directive 96/82/EC.
13
EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations implement Article 30 of European Parliament and Council Directive 2012/18/EU
on the control of major accident hazards involving dangerous substances (O.J. L 197, 24.7.2012, p.1)
(the Seveso III Directive).
The purpose of Article 30 of the Seveso III Directive is to deal with the uncertainty in relation to the
correct classification of heavy fuel oils. The effect of Article 30 is to deal with this uncertainty by
adding heavy fuel oils to Part 1 of Annex 1 to Council Directive 96/82 (O.J. L 10, 14.1.1997, p. 13)
as amended by European Parliament and Council Directive 2003/105 (O.J. L 345, 31.12.2003, p.97)
(Seveso II Directive) under the heading Petroleum Products with qualifying quantities of 2,500 tonnes
for Articles 6 and 7, and 50,000 tonnes for Article 9.
Regulation 2 of these Regulations amends the Control of Major Accident Hazards Regulations 1999
by adding heavy fuel oils to the list of named substances in Part 2 of Schedule 1 to the Regulations.
Regulation 3 amends the Planning (Hazardous Substances) Regulations 1992 and makes a similar
amendment by adding heavy fuel oils to the list of named substances in Part A of Schedule 1 to the
Regulations.
Regulation 4 requires the Secretary of State to review the operation and effect of regulation 2 of these
Regulations and publish a report within five years after they come into force and within every five
years after that. Following a review it will fall to the Secretary of State to consider whether the
Regulations should remain as they are, or be revoked or be amended. A further instrument would be
needed to revoke the Regulations or to amend them.
A full impact assessment of the effect that this instrument will have on the costs of business and the
voluntary sector is available from the Health and Safety Executive, Redgrave Court, Merton Road,
Merseyside, L20 7HS and is available in the libraries of both Houses of Parliament, and is annexed to
the Explanatory Memorandum which is available alongside the instrument on
www.legislation.gov.uk.
14
Annex B
Title:
IA for amending COMAH 1999 to align the thresholds for Heavy
Fuel Oil with those of Petroleum Products.
IA No:
Lead department or agency:
Health and Safety Executive
Other departments or agencies:
Scottish Environment Protection Agency
Environment Agency
Natural Resources Wales
Impact Assessment (IA)
Date: 09/04/13
Stage: Consultation
Source of intervention: European
Type of measure: Secondary legislation
RPC Opinion: Awaiting Scrutiny
Summary: Intervention and Options
Cost of Preferred (or more likely) Option
Total Net
Present Value
Business Net
Present Value
Net cost to business per
year (EANCB on 2009 prices)
In scope of One-In, Measure qualifies as
One-Out?
Not quantified
Not quantified
Not quantified
No
Not applicable
What is the problem under consideration? Why is government intervention necessary? The UK
is required to implement Article 30 of the new Seveso III Directive (replacing Seveso II Directive) into
UK law by 14 February 2014. We propose doing this by minor amendment to the Control of Major
Accident Hazards Regulations 1999 (COMAH). This amendment will take a significant number of
sites out of scope of COMAH. The EC classification ('dangerous for the environment' - DFE) of Heavy
Fuel Oil (HFO) causes problems for industry under consequential requirements of COMAH. UK
lobbied and secured Article 30 in the Seveso III Directive, enabling HFO to be treated under COMAH
as 'petroleum products'; relaxing significantly the demands on UK industry.
What are the policy objectives and the intended effects? (i) Implement the change proposed in
the Seveso III Directive to the classification of HFO into UK law- (ii) Enable many UK industry
stakeholders to be removed completely from legislative requirements and others to have simpler
compliance duties (iii) Giving clarity and legal certainty to UK businesses on how HFO should be
treated; (iv) Deliver a 'level playing-field' in the EU where the same thresholds will be used; and (v)
Avoid infraction and associated costs for failure to implement Article 30 of the Directive.
What policy options have been considered, including any alternatives to regulation? Please justify
preferred option (further details in Evidence Base)
Option 1: Amend the Control of Major Accident Hazards Regulations 1999 (COMAH) (recommended
option)
Option 2: Using non-legislative means to implement the changes necessary.
Option 1 is the preferred option because it is achievable, benefits industry by enshrining in law the
reduced burden for compliance, provides the legal clarity sought by industry, meets EC obligations (so
avoiding infraction) and maintains HSE’s reputation. The ‘do nothing’ option is not a viable option as
we are obliged to meet the European obligations. However, it is the notional baseline against which
the other policy options are compared.
Will the policy be reviewed? It will/will not be reviewed. If applicable, set review date: Month/Year
Does implementation go beyond minimum EU requirements?
No
Are any of these organisations in scope? If Micros not
Micro
< 20
Small
Large
MediumYes
exempted set out reason in Evidence Base.
Yes
Yes
Yes
Yes
What is the CO2 equivalent change in greenhouse gas emissions?
Traded:
Non-traded:
(Million tonnes CO2 equivalent)
N/a
N/a
I have read the Impact Assessment and I am satisfied that, given the available evidence, it represents a
reasonable view of the likely costs, benefits and impact of the leading options.
Signed by the responsible
Date:
15
14/08/13
Summary: Analysis & Evidence
Policy Option 1
Description: Amend the Control of Major Accident Hazards Regulations (COMAH) 1999
FULL ECONOMIC ASSESSMENT
Price Base
Year 2013
PV Base
Year 2013
COSTS (£m)
Time Period
Years 10
Net Benefit (Present Value (PV)) (£m)
Low: Not quantified
Low
Not quantified
High
Not quantified
Best Estimate
Not quantified
Years
Best Estimate: Not quantified
Average Annual
Total Cost
(excl. Transition) (Constant Price)
(Present Value)
Not quantified
Not quantified
Not quantified
Not quantified
Not quantified
Not quantified
Total Transition
(Constant Price)
High: Not quantified
1
Description and scale of key monetised costs by ‘main affected groups’
It has not been possible to monetise any costs associated with the proposals.
Other key non-monetised costs by ‘main affected groups’
Sites with more than 2,500 tonnes of Heavy Fuel Oil (HFO) will be subject to COMAH requirements
following the legal clarity of the proposed change. Average costs of compliance with COMAH are £110
thousand over 10 years for Lower Tier (LT) sites (over 2,500t of HFO) and £580 thousand over 10 years for
Top Tier (TT) sites (over 25,000t of HFO). However, there are too many uncertainties to estimate how
many sites will be affected and, by how much their cost would increase. Also, these 10 year cost estimates
are average indicative estimates of the cost of compliance but the cost for HFO sites could be much lower
due to a differing risk profile at HFO sites to that of the average COMAH site. To add to this, the greatly
relaxed capture criteria will mean only a relatively small number of large scale operators will now be subject
to COMAH requirements and many of these are likely to fall under COMAH already for other reasons.
There could be also some cost to industry associated with familiarisation but again this cannot be quantified
without a robust baseline. The overall outcome for UK industry of the proposed amendment to COMAH will
be to remove completely or reduce significantly the burden and cost of compliance by avoiding or reducing
capture by the regulations. In one sense, the proposal may be viewed as ‘deregulatory’.
BENEFITS (£m)
Total Transition
(Constant Price)
Low
Not quantified
High
Not quantified
Best Estimate
Not quantified
Years
Average Annual
Total Benefit
(excl. Transition) (Constant Price)
(Present Value)
Not quantified
Not quantified
Not quantified
Not quantified
Not quantified
Not quantified
1
Description and scale of key monetised benefits by ‘main affected groups’
It has not been possible to quantify any cost savings because the UK regulators exercised pragmatism by
not proactively enforcing the specific requirements of COMAH as the DFE thresholds were recognised to
be unreasonable on the basis of risk. See full explanation in paragraph 17. We do not expect there will be
any health and safety benefits, but there may be environmental safety benefits
Other key non-monetised benefits by ‘main affected groups’
The changes proposed will deliver legal certainty and clarity to business. HSE knows a number of sites are
unsure about where they currently stand in legal terms and so this is creating a cost, both in terms of
resolving their queries with HSE and with their suppliers and customers. It is also possible that there could
be compliance and familiarisation cost savings based on the fact that a significant number of HFO sites
would come under COMAH if the DFE thresholds were applied, whereas the number of HFO sites coming
within COMAH will be much smaller under the petroleum products thresholds. There could also be savings
for those sites with over 2,500t but less than 25,000t of HFO who are currently classed as TT under DFE
thresholds and who would be LT under the petroleum products thresholds. However, the vast majority of
sites do not currently comply with DFE and so any ‘savings’ made by industry are largely theoretical and are
based on a future projection of compliance rather than current practice.
Key assumptions/sensitivities/risks
Discount rate (%)
3.5
HSE intends to improve its knowledge about the likely impacts of this proposal during the consultation.
BUSINESS ASSESSMENT (Option 1)
Direct impact on business (Equivalent Annual) £m:
In scope of OIOO?
Measure qualifies as
Costs: Not quantified
No
Not applicable
Benefits: Not quantified
Net: Not quantified
16
Evidence Base (for summary sheets)
Problem under consideration
1.
The Seveso II Directive (96/82/EC), implemented in Great Britain as the
Control of Major Accident Hazards Regulations 1999 (COMAH), aims to
prevent on-shore industrial major accidents and limit consequences to people
and the environment. Application depends on inventories of dangerous
substances. Petrochemical and chemical industries are routinely in scope, but
other sectors such as large scale fuel, gas and chemical storage and
distribution, pharmaceuticals and metal manufacturing can also be subject to
COMAH. COMAH applies at 2 levels – Top Tier (TT), with the most stringent
requirements, and also Lower Tier (LT).
2.
Heavy fuel oil (HFO) is a viscous liquid petroleum residue used predominantly
in power stations, manufacturing and marine transport; it is also used as a
primary fuel for industry in remote off-grid locations as well as a back up fuel
elsewhere. Previously HFO was not treated as a dangerous substance and so
was not in scope of COMAH regardless of the amount involved. Following
changes in 2009/10 to its categorisation under Seveso to ‘very toxic to aquatic
organisms’, there was much uncertainty in the European Commission (EC),
member states and industry about whether the Directive should apply.
Recent legal advice confirms that the Seveso Directive and COMAH do now
apply to HFO in a ‘Dangerous for the environment’ (DFE) classification, with
corresponding threshold quantities of 100t (tonnes) for LT sites and 200t for
TT sites. These thresholds are much lower than would be justified by the
major accident hazard the substance presents. This increases the range and
number of sites that should come into scope as a result of the change to the
categorisation dating back to 2009/10. It includes sites not usually considered
to represent a major accident hazard such as hospitals, industrial laundries
etc.
3.
Following the amendment to the categorisation of HFO under Seveso II in
2009/10 to DFE thresholds, theoretically all sites storing more than 100t of
HFO should have been in scope of COMAH. However, because the UK and
other member states believed these thresholds were too low and did not
reflect the major accident hazard potential of the sites, the burden of the
specific requirements triggered by the DFE thresholds was not enforced
proactively in the UK.
4.
Following successful negotiations, the new Seveso III Directive (2012/18/EU)
adds HFO to the ‘Petroleum products’ category, with significantly higher and
more proportionate threshold quantities at 2,500t LT and 25,000t TT. The
Directive has to be implemented in the UK by 1 June 2015, but it includes an
article on HFO requiring earlier implementation by 15 February 2014. In
making the change, member states and the Commission recognised the
unreasonableness of the current DFE requirements. The 2014
implementation date is intended to provide legal certainty to member states by
replacing the old DFE thresholds with new proportionate thresholds applicable
to a range of petroleum products. In one sense, this may be viewed as
effectively a ‘deregulatory’ measure. Those sites storing more than 2,500t
17
(LT) and 25,000t (TT), should already be captured in COMAH by the DFE
threshold and will be subject to the COMAH requirements going forward.
However, sites with less than 2,500t1 of HFO which are currently legally in
scope of COMAH under the DFE thresholds will fall out of scope completely
under the COMAH regime (unless they fall within it for other reasons,for
example, by having qualifying quantities of other hazardous chemicals on
site)..
Policy objectives and intended effects
•
•
•
•
•
•
Implement European thresholds for HFO in UK law.
Enable many UK industry stakeholders to be removed completely from
legislative requirements (those storing less than 2,500t of HFO) and
others (with between 2,500t and 25,000t of HFO) to have simpler and
less expensive compliance duties (as they will be LT under the
proposed amendment to COMAH instead of TT under DFE).
Ensure proportionality by moving HFO to the ‘Petroleum products’
category – HFO will have significantly higher thresholds, more
consistent with the hazard it and other petroleum products present;
Give clarity and legal certainty to industry – there has been uncertainty,
as some companies are starting to comply with DFE thresholds and
others have been making enquiries;
Deliver a level playing field in the EU – other member states will be
using petroleum products thresholds for HFO; and
Avoid the risk of infraction and its associated costs.
Policy options considered, including alternatives to regulation
5.
Option 1 – Amend COMAH to introduce the petroleum products classification
and thresholds for HFO to come into effect from 15 February 2014.
6.
Option 2 - Use non-legislative means (NLM) to implement the changes; apply
the petroleum products thresholds by way of a note on the regulator’s website
from February 2014 but only introduce the change in law when the Seveso III
Directive is implemented on 1 June 2015. The note would acknowledge that
the DFE thresholds apply to HFO in domestic legislation and that regulators
would be unlikely to take enforcement action in respect of HFO below the
petroleum products thresholds.
7.
Both the above options are compared to the notional ‘do nothing’ option i.e.
that COMAH is not changed and so the DFE thresholds for HFO apply. Given
that aligning the thresholds for HFO with those of petroleum products is a
European requirement, the ‘do nothing’ option is not a valid option. However,
it is presented in this IA as the notional baseline against which options 1 and 2
are compared.
8.
Five key factors were used to assess the options (see table below):
1
Please read at all places when <2,500t is referenced: 'but more than 100t'. This is to make explicit that this reference
means those sites storing HFO that are in scope of DFE thresholds but not Petroleum products thresholds.
18
(a)
Time – there is a tight deadline of 14 February 2014 for changes to be
made into law;
(b)
Legal – transposition of EU legislation must satisfy legal obligations;
(c)
Reputation – the UK pushed hard for an early solution to the low DFE
thresholds for HFO so it may harm the UK’s credibility if the negotiated
amendment was not implemented into law;
(d)
Enforcement position – ability for regulators to take enforcement action;
and
(e)
Ongoing burden – ongoing costs of compliance for business.
Option 1
9.
Option 2
(a) Time
Achievable Achievable
(b) Legal
Satisfied
(c) Reputation
Maintained Likely to be adversely affected.
(d) Enforcement
position
Satisfied
Uncertain. If there was an accident involving HFO with
quantities less than the petroleum products threshold,
the regulator may be under public pressure to take
enforcement action (and at risk of judicial review) but
this would conflict with the Seveso amendment.
(e) Ongoing
burden
Satisfied
Costs associated with uncertainty.
EC does not accept NLM as appropriate for
implementation of Directives. Risk of infraction.
Option 1 is recommended as it meets the non-monetised requirements
(factors (a), (b), (c) and (d), and minimises costs and reduces burdens (e).
The European Court of Justice frowns on NLM as they are not legally
enforceable and the UK would need to be prepared to risk/fight infraction for
non-transposition. Potential reputational damage to UK might prove
considerable although its scale and consequences cannot be meaningfully
calculated. Option 2 carries another drawback; for so long as the current DFE
thresholds remain extant in UK law, the industry and regulator are actually
subject to them. Potentially, the regulator may, in certain circumstances (e.g.
an incident), face demands to ‘enforce the law’ under DFE thresholds albeit
that law is perceived as inappropriate and other legal remedies are available
for such circumstances. Consequently, option 2 is not analysed any further in
this impact assessment.
19
Costs and Benefits
Risks and assumptions
The baseline
10.
The baseline or ‘do nothing’ option assumes the current legal position in
Seveso II continues. i.e. that the DFE thresholds apply to HFO. Option 1 is
compared to this baseline position.
Sites storing less than 2,500 tonnes of HFO
11.
Owing to earlier uncertainty, HSE has not prioritised enforcement of DFE
thresholds in the UK up to now and does not plan to change this approach,
pending the proposed COMAH amendment. We are aware of a small number
of sites storing less than 2,500 tonnes of HFO that are taking steps to comply
at DFE thresholds and a growing number of sites that are making enquiries.
However, the majority of HFO sites storing less than 2.500t do not currently
apply the DFE thresholds (and as noted, due to the uncertainty around the
legal position and seeming inappropriateness of the thresholds, HSE has not
enforced them up to now). Consequently, any ‘savings’ made by industry are
largely theoretical as they are based on a future projection of the baseline
scenario in which HFO sites start to comply with the DFE thresholds. While
HSE does not have the data to gauge the implications for sites working to
DFE thresholds under the baseline scenario, it intends to continue to gather
data from the industry during consultation to further its knowledge in this area.
Sites storing more than 2.500t of HFO (LT) and 25,000t (TT).
12.
Under the baseline (do nothing scenario) there are some sites that are
captured by the DFE thresholds and which store more than 2,500t and
25,000t of HFO. These sites will also be in scope of COMAH under the
‘petroleum products’ thresholds and therefore the proposed amended
COMAH regulations under option 1. For those sites storing more than
25,000t of HFO there will be no legal change between option 1 and the
baseline. However, for those sites storing between 2,500t and 25,000t of
HFO, the sites will be classed as LT under option 1 but would be TT under the
baseline. There could therefore be some simplification around compliance
and cost savings for these sites. Again, these savings are largely theoretical
due to the fact the DFE thresholds are not currently being enforced and so
any savings are a future projection of the baseline scenario. It is also possible
that for all HFO sites in scope of COMAH under option 1, there could be an
increase in general compliance with COMAH following the certainty that this
option will bring. This effect is potentially limited by the fact that many sites
storing these quantities of HFO in scope under option 1 are likely to also be
storing other dangerous substances which would mean they are in scope of
COMAH for other reasons. Again, HSE does not have the data to gauge the
implications for these sites but it intends to continue to gather data from the
industry during consultation to further its knowledge in this area
20
Number of sites affected
13.
At the negotiation stage of the Seveso III Directive, a research project was
carried out to estimate costs for the draft negotiation stage impact
assessment (IA) in 2010/11. Despite significant effort, it was not possible to
collect evidence on the number of sites that are currently outside of scope of
the Directive, but which might move into scope under Seveso III. This is
because these sites are not currently known to HSE under Seveso II and so
there is no comprehensive data source of these sites. An estimate was
provided based on expert judgement and analysis of the types of substances
and so what industries might be affected, which in turn allowed an estimate of
the number of sites. The same problem applies in relation to HFO. Those
sites that are currently outside of scope of COMAH 1999 but which would fall
under DFE thresholds are unknown to HSE. Any estimate of the number of
sites this might affect has to rely on best judgement. HSE intends to use the
consultation process to gather more information about how many sites might
be affected.
14.
However, as an initial first estimate, we have used information from the
Department of Energy and Climate Change (DECC)’s annual Digest of UK
Energy Statistics. This includes statistics for demand of different petroleum
products including HFO. It indicates that the key sectors using HFO are, in
priority order, shipping, power stations, industry, and public administration.
We have estimated that there is a minimum of 50 sites which store below
2,500t of HFO (20 marine fuel suppliers, 14 power stations and 16 other
industrial sites). Energy UK (the trade association for the energy industry)
supplied the power station data. The Federation of Petroleum Suppliers and
Tank Storage Association (who have members who supply HFO to a wider
range of industries than UKPIA) have verified the above estimates and the
range of industries.
Appraisal assumptions
15.
1
Impacts are assessed over a period of 10 years and discounted at a rate of
3.5%1. This period covers the proposed amendment to COMAH up until 2015
and then the period thereafter when the remainder of the Seveso III Directive
has been transposed into UK legislation. The Seveso III Directive maintains
HFO under ‘Petroleum product’ thresholds and so the impacts associated will
continue for the duration of Seveso III in UK law; this is why a 10 year period
has been chosen rather than merely from 2013-15. It would be misleading to
show only impacts for the remaining 2 years that COMAH 1999 will exist. It is
more logical to keep the impacts associated with the HFO amendment in the
same IA. All the other changes in the Seveso III Directive will be assessed in
a separate IA for its transposition in due course without including HFO.
Total costs and benefits over 10 years are expressed in ‘present value’ terms – being the value in today’s terms of the
future costs and benefits over the 10 year period. The sum of future costs and benefits is adjusted by the discount rate of
3.5% to reflect the time value of money.
21
Cost Savings
Compliance cost savings
16.
As noted above, a significant number of sites would come within scope of
COMAH if the DFE thresholds were applied, whereas the number of sites
coming under COMAH will be much smaller under the petroleum products
thresholds. There are also some sites storing between 2,500t and 25,000t of
HFO who would be classed as TT under the current DFE threholds but which
would be LT under the proposed amended COMAH regulations. While all
these sites would experience theoretical compliance cost savings compared
to the do nothing option, it is important to note this is the theoretical position.
Due to uncertainties around the legal position and the fact the risk associated
with these sites does not support the DFE thresholds, the vast majority of
sites do not currently comply with DFE thresholds. How this position would
change under the baseline scenario if COMAH is not changed over the next
10 years is not clear.
17.
HSE has attempted to gather information from HFO sites about whether they
would fall into scope under DFE thresholds but not under Petroleum Products
thresholds. While a number of useful case studies have been obtained, it is
not possible to estimate an overall aggregate impact from these case studies,
as the impact is not uniform over all sites, and HSE does not have a robust
estimate of the number or composition of sites affected. This is because the
UK regulatory Competent Authority, working with industry, has exercised
pragmatism in the expectation of this common sense amendment coming
along i.e. we have not proactively enforced the specific requirements of
COMAH as triggered by the seemingly unreasonable (in terms of risk) current
DFE ‘capture thresholds’. The ‘downside’ of this approach is that we do not
therefore have meaningful baseline data on costs to UK industry, so making it
difficult to carry out any robust comparative analysis for the impact
assessment. However, the case studies are included at annex 1 and
demonstrate that for some sites there would be compliance cost savings
compared to the theoretical baseline of compliance with DFE thresholds.
18.
The costs of compliance for HFO sites that fall into scope under DFE
thresholds is also difficult to estimate. HSE has estimated average
compliance costs for COMAH 1999 as part of implementation of the new
Seveso III Directive, with the estimates being split between top tier and low
tier (£110 thousand over 10 years for LT sites and £580 thousand over 10
years for TT sites). The estimates were informed by a large survey of
operators that required significant resource. It is not proportionate to repeat
this exercise specifically for HFO sites and it is unlikely that the average
compliance costs estimated for Seveso III will be relevant for all HFO sites.
For instance, it is unlikely HSE would require as detailed a safety report from
HFO sites as for a complex site storing and using a large number of different
chemicals. HSE intends to speak to industry further about this at consultation.
22
Legal Certainty
19.
A significant benefit of option 1 is the legal certainty that it would provide for
those sites with less than 2,500t of HFO and the regulator. Some sites are
aware that DFE thresholds should apply and a few are taking steps to comply;
others are uncertain about the next two year period and so they are speaking
to the regulator and consultants. The time taken up by these queries creates a
cost to the industry and to the regulator. It is also apparent that some sites
are losing business due to the uncertainty. The cost of this uncertainty cannot
be quantified because the evidence received is anecdotal; it is not possible to
extrapolate as we do not know how many sites might be in similar positions to
those providing these anecdotes.
Familiarisation savings
20.
It is anticipated that there will be some cost savings to sites with less than
2,500t of HFO around ongoing familiarisation. In addition to the uncertainty
discussed above, under the do nothing option, sites could spend time
familiarising themselves i.e. considering and understanding their requirements
in law. Amending the thresholds to those of petroleum products will
theoretically avoid these sites having to spend time on this familiarisation. It is
not possible to predict how many sites might benefit in this way as again this
is just a theoretical position, similar to the cost savings around compliance.
HSE will speak to industry further about this at consultation.
Costs
Sites with more than 2.500t (LT) and 25,000t (TT)
21.
This impact assessment is concerned with the changes that will take place as
a result of option 1 being implemented compared to the baseline (or current)
situation and in particular what business will do in practice as a result. When
comparing option 1 to the baseline scenario, sites with more than 2,500t will
remain in scope of COMAH (although those with between 2,500t and 25,000t
will move from TT to LT under option 1). However, in practice it is possible
that not all sites with more than 2,500t (LT) and 25,000t (TT) were fully
compliant with COMAH during this period, due to uncertainty around the
European Commission decision on thresholds for HFO - not clarified until the
beginning of 2013. Consequently, it is possible that the proposed change to
COMAH in option 1 might increase compliance with COMAH at both tiers by
this group of HFO sites.
22.
HSE cannot predict with any accuracy how many of these sites might
increase their compliance with COMAH as a result of the changes, or in fact
what this increase could cost. HSE has early indicative estimates of the cost
of compliance with COMAH as being around £110 thousand over 10 years for
LT sites and £580 thousand over 10 years for TT sites. However, it is unlikely
that these sites would see an increase amounting to the full costs of
compliance. This is because they may already be complying to some degree
with the COMAH regulations. Also, the risks associated with storing HFO
might be different to those associated with the ‘average’ COMAH site and so
23
the costs of compliance may be lower than this estimated average. HSE will
seek to gather more evidence at consultation about the likely impact on HFO
sites that store more than 2,500t (LT) and 25,000t (TT) of HFO.
Familiarisation with the changes proposed
23.
For those sites aware of the changes, there will be some time taken to
understand that the thresholds for HFO are changing. It is not thought this will
take more than a couple of hours per site in total, so probably at a cost of less
than about £50 per site. It is not possible to quantify the total familiarisation
costs because of the uncertainty around how many of the relevant sites will be
aware of the changes and so spend time understanding them. Due to the
relatively small number of sites that are probably aware of the current
situation and will take notice of the changes, coupled with the relatively small
time commitment required to understand the changes, the total cost of
familiarisation with this proposal is likely to be less than £10 thousand in total.
Summary of impacts associated with option 1
24.
It is not possible to quantify the total impacts on sites storing HFO. Anecdotal
evidence has suggested that there are sites for which savings would occur
when comparing option 1 to the theoretical baseline.. While we have
estimated there could be a minimum of 50 HFO sites affected, in reality we
acknowledge that savings will not apply to all of these sites as any savings will
depend on whether they would begin to comply with the DFE thresholds
under the ‘do nothing’ scenario. Thus it has not been possible to quantify any
compliance savings for industry. It is possible that for sites storing between
2,500t and 25,000t of HFO, there could also be theoretical cost savings as
these sites would be legally classed as TT under the baseline scenario, but
LT sites under option 1. Again the extent of any savings will depend on the
level of compliance with the baseline scenario and in the absence of data
these savings have not been possible to quantify.
25.
An important consequence of the proposed change is the legal certainty this
would provide, being both a benefit for industry and the regulator in terms of
time savings from reduced queries and problems and providing assurance to
suppliers and customers. There would also in theory be some time savings to
industry from avoiding the familiarisation required when starting to comply
with the COMAH regulations compared to the ‘do nothing’ scenario. These
savings are linked to compliance cost savings and the uncertainty around
these described in the previous paragraph means that these familiarisation
savings also cannot be quantified.
26.
This legal certainty could also increase compliance costs for those sites that
store more than 2,500t (LT) and 25,000t (TT) of HFO. Although these sites
are legally in scope of COMAH under both the baseline and option 1, the legal
certainty that amending COMAH will provide could increase compliance by
this group of sites. The extent of this is limited by the fact that some of these
sites are already likely to fall under COMAH due to other substances they are
storing. Due to the uncertainty about how many sites might be affected and by
24
how much compliance might increase, it has not been possible to quantify the
additional costs for these sites.
27.
There could be small familiarisation costs to businesses that follow these
changes and spend time understanding what HSE is proposing and engaging
with the consultation. Due to the relatively small numbers expected to be
aware of these changes, this familiarisation cost is not expected to be
substantial.
Rationale and evidence that justify the level of analysis used in the IA
(proportionality approach)
28.
As part of the Seveso III negotiations, a large scale survey of all COMAH sites
was conducted, asking sites about their inventories of chemical substances
and the time it takes them to comply with COMAH 1999. The survey received
a 25% response rate. Despite this and a significant amount of resource, it
was still not possible to identify the number of sites currently outside of
COMAH 1999 that might come into scope as a result of the scope changes in
Seveso III (as HSE has no relationship with those currently outside of scope).
The information provided by sites was complex and required significant
resource from toxicologists and Seveso specialists in order to interpret it. To
get an idea of which sites storing HFO would be in scope under DFE
thresholds would require further significant resource, which is not
proportionate to this business-benefiting proposal. Additionally, those sites
which might be in scope at DFE thresholds but with which HSE has no current
relationship would be very difficult to identify, despite such an outlay of
resource. Given that the change is required in law by Europe and further
information, including businesses’ view of the proposals, will be sought at
consultation, the level of analysis provided is sufficient.
Risks and assumptions;
29.
The extent of the impacts will depend on the future baseline scenario. In
other words, in the absence of change, whether sites that fell within the DFE
thresholds would start to comply or not and the rate at which they would
comply over the 10 year period.
30.
At the very minimum, the changes proposed will deliver legal certainty to the
industry. HSE knows of cases where sites are uncertain about their legal
requirements, and this is creating a cost burden on that site and on the
regulator. Consequently, the provision of legal certainty will help to avoid
such costs. At the same time, it could increase compliance for those HFO
sites already in scope.
Direct costs and benefits to business calculations (following OITO
methodology)
31.
This proposal is out of scope of OITO. The proposed amendment implements
a European Directive; it does not “gold-plate” by going beyond its provisions
or fail to adopt available derogations. It does not need to be considered under
the terms of the micro-business exemption.
25
Wider impacts
32.
Government guidance is to consider whether the proposal will have any
impacts on the following: competition, wider environmental issues, health and
well being, human rights, justice system, rural proofing, sustainable
development. No impacts are expected in these areas except for the
following:
33.
Statutory Equalities IA: Not relevant to consideration of HFO
34.
Wider environmental issues: The thresholds for HFO will be increased from
the DFE thresholds to those for Petroleum Products in recognition of its lesser
level of potential as a major hazard.
35.
Health and well being: Although the thresholds for HFO to be in scope of
COMAH are being raised to those of petroleum products, it is not thought that
the risk to human health will change as the lower threshold is not warranted
by the risk posed by HFO. No actual change in risk is expected.
Summary and preferred option with description of implementation plan
36.
Option 1 is the preferred option, to amend the HFO thresholds so they
become much less onerous by aligning with the thresholds for other
petroleum products. The overall impact on business cannot be quantified,
but will be beneficial and provide simplification and legal clarity for a large part
of the industry
37.
We will implement the amendment to current regulation (COMAH 1999,
enacting Seveso II) as required by Seveso III by 14 February 2014. It is
planned that the COMAH Regulations will be replaced when the remainder of
Seveso III changes are incorporated into UK law by June 2015.
26
Annex 1 - Case studies of HFO sites known to be affected by the DFE
thresholds
38.
Business with operations at multiple sites
Whisky manufacturer currently operating 29 sites; 2 TT and 3 LT sites
already notified due to qualifying quantities of flammable liquids under
COMAH. At DFE thresholds, 2 additional TT sites and 3 additional LT sites.
At petroleum products thresholds, no additional sites:, i.e. same as now 2 TT
and 3 LT.
The do nothing option: Additional costs of compliance – 2 extra TT sites and 3
extra LT sites. Actual costs over 10 years would depend on the site’s
awareness of the legal requirements under DFE and how quickly compliance
would be adopted.
Option 1: No change from current position and so compared to the baseline
could make cost savings, subject to the caveats above around rate of uptake
and awareness,
39.
Changing from LT at DFE thresholds to out of scope at petroleum
products thresholds
Small whisky distillery holding 132t of HFO
The do nothing option: Additional costs of compliance associated with coming
into scope at LT. Actual costs over 10 years would depend on the site’s
awareness of the legal requirements under DFE and how quickly compliance
would be adopted.
Option 1: This site would fall out of scope of COMAH and so could make
savings compared to the baseline, subject to the caveats above around rate
of uptake and awareness.
40.
Changing from TT at DFE thresholds to LT at petroleum products
thresholds
a)
Food manufacturer already a LT site due to presence of other
dangerous substances and holding 1,000t of HFO as a back up heating
fuel.
The do nothing option: Additional cost of compliance associated with
coming into scope at TT. Actual costs over 10 years would depend on
the site’s awareness of the legal requirements under DFE and how
quickly compliance would be adopted.
Option 1: Due to other substances held, the site would remain LT. The
site would make savings compared to the baseline, subject to the
caveats above around rate of uptake and awareness.
27
b)
Power station already a LT site due to presence of other dangerous
substances and holding 12,000t of HFO as a back up fuel.
The impacts against the baseline are the same as for the food
manufacturer in a) above.
c)
Fuel storage site already a LT site due to presence of other petroleum
products and holding 19,500t of HFO predominantly for marine
purposes.
The impacts against the baseline are the same as for the food
manufacturer in a) above.
28
Annex C
List of consultation questions
Question 1
(a)
Is the use of the term ‘heavy fuel oil’ (HFO) in the regulations understood by
UK stakeholders?
Yes
No
(b)
If No, please explain why not
Question 2
(a)
Are you content with the proposed approach for handling Article 30 of Seveso
III (i.e. by the proposed regulatory amendment to COMAH)?
Yes
No
(b)
If No, please explain why not
Question 3
(a)
Does the proposed regulatory amendment to COMAH enable you to identify
what you need to do?
Yes
No
(b)
If No, please explain why not
29
Question 4
(a)
Is posting information on the HSE website an appropriate and sufficient way
to share information and raise awareness for stakeholders affected by the
change to COMAH?
Yes
No
(b)
If No, please explain why not.
Question 5
(a)
Apart from our partners in the COMAH competent authority (the Scottish
Environment Protection Agency, Environment Agency and Natural Resources
Wales) and Government organisations that produce guidance dealing with
land-use planning matters, are there other organisations that HSE should
seek to work with to ensure that their guidance on HFO is up to date?
Yes
No
(b)
If Yes, which other organisations should HSE seek to work with?
Question 6
(a)
In your opinion, could the proposed implementation date have any unintended
consequences for UK stakeholders involved with heavy fuel oil?
Yes
No
(b)
If Yes, please explain what these might be.
30
Question 7
(a)
Do you consider the proposed regulatory amendment to COMAH will be
beneficial to companies that are 'small' (i.e. 50 or fewer employees) or 'micro' (i.e.
less than 10 employees)?
Yes
No
(b)
If No, please explain why not.
Question 8
(a)
Are you aware of any sites which have a hazardous substances consent for
HFO that would no longer be required as a result of the changes?
Yes
No
(b)
If Yes, please say how many sites are involved and whether they are in
Scotland, England or Wales
Question 9
Do you have any comments on the effect of the change to requirements for planning
hazardous substances consent?
Question 10
(a)
Do you agree with the Impact Assessment (Annex B)?
Yes
No
(b)
If No, please provide information about what data (or data sources) would be
better
31
Question 11
(a)
Are you currently subject to the COMAH regulations, but you will not be
subject to them when the new thresholds apply (i.e. you 'drop out' of COMAH
regulation)?
Yes
No
(b)
If Yes, what difference per year (in money, time), if any, will dropping out of
scope of COMAH mean for your organisation?
Question 12
(a)
Are you currently subject to COMAH regulations at top tier, but will drop to
lower tier when the new thresholds apply?
Yes
No
(b)
If Yes, what difference per year (in money, time), if any, will moving from top
tier to lower tier mean for your organisation?
32