Waste-derived materials — Claimant producing waste-derived products for sale — Claimant burning same products as fuel in its plants — Defendant issuing permit on basis that burned fuels amounting to waste for purposes of Pollution Prevention and Control Regulations 2000 — Waste Framework Directive 2006/12 — Whether products ceasing to be waste before being burned — Claim dismissed
In the first of the joined cases, the claimant was involved in the recovery and recycling of industrial waste materials, particularly solvents that it “laundered” and refined into a range of product grade distillates (PGDs) that it then sold on the open market. The PGDs were sold on the basis that they were not waste and that consequently there was no requirement to comply with the controls imposed under the Waste Framework Directive 2006/12 relating to handling, transport and storage of waste. In addition, the claimant used some of the PGDs to fuel its own plants. The defendant issued a permit for the claimant’s plants, under the Pollution Prevention and Control Regulations 2000, in terms that if PGDs were to be burned, the claimant would have to comply with the requirements of the Waste Incineration (England and Wales) Regulations 2002.
The claimant brought judicial review proceedings to challenge the legality of the defendant’s decision. It contended that the 2002 Regulations were not applicable and that the defendant had wrongly characterised the PGDs as waste since they had been through a “complete recovery operation” as described in ARCO Chemie Nederland Ltd v Minister van Volkshuisvesting, Ruimtelijke Ordening en Milieubeheer C-418/97 [2002] QB 646. It further submitted that the waste materials had been the subject of recovery operation R2 in Annex IIB to the Waste Framework Directive, namely solvent reclamation or regeneration, so that, by the time they were burned, the resulting PGDs were no longer waste material. The defendant maintained that products that were derived from waste and were to be burned as fuels would not ordinarily cease to be waste until they were burned and the energy recovered. It argued that the relevant recovery operation was R1, namely use as a fuel or other means to generate energy. In the second case, similar issues arose in respect of the claimant’s production and sale of recycled fuel oil.
Held: The claim was dismissed.
(1) There could be more than one successive recovery operation under the Waste Framework Directive: SITA EcoService Nederland BV (formerly Verol Recycling Limburg BV) v Minister van Volkshuisvesting, Ruimtelijke Ordening en Milieubeheer C-116/01 [2004] QB 262 applied. Recovery operation R2 applied to the reclamation of solvents for the purpose of their being used as solvents, and that was the relevant operation where the PGDs were marketed to third parties. However, the subsequent burning of the PGDs as fuel in the claimant’s plants was a further recovery process, falling within R1, and those PGDs were waste until they had been burned. The R2 recovery of the PGDs did not render them “ex-waste” indefeasibly and for all purposes; they could revert to being waste if there was an intention to “discard” them within the meaning of article 1(a) of the Waste Framework Directive. In that context, “discard” could encompass use as a fuel: Castle Cement v Environment Agency [2001] EWHC 224 (Admin); [2001] 2 CMLR 19 applied; ARCO considered.
(2) The European authorities did not support a concept of “complete recovery operation” by reference to the absence of pollution from burning the resulting substances or to the fact that use of those substances posed no greater risk to health and the environment than comparable primary raw materials: ARCO, Inter-Environnement Wallonie Asbl v Region Wallonie C-129/96 [1998] 1 All ER (EC) 155 and Palin Granit Oy v Lounais-Suomen Ymparistokeskus C-9/00 [2002] 1 WLR 2644 considered. Such tests would be unworkable by virtue of their uncertainty and were no substitute for the control imposed by the European waste regime.
(3) The rule that waste or waste-derived products intended to be burned as fuels did not cease to be waste until they were burned and the energy was recovered had one exception. That was the “special case”, where the material had originally been a fuel, at least as one of its potential uses, it had been through a recovery process that was sufficient to render it chemically and physically identical to the original material, and no further processing was required. The appropriate natural fuel to use as a comparator in applying that test would normally be a question for the court to decide in the event that the issue arose in criminal proceedings for non-compliance with the relevant environmental regulations. The claimant in the second case was unable to comply with that test, but it remained to be determined whether the claimant in the first case might be able to do so in respect of some of the PGDs.
David Hart QC, Stephen Tromans and Jess Connors (instructed by Semple Fraser, of Glasgow) appeared for the claimants; John Howell QC and Dinah Rose QC (instructed by the legal department of the Environment Agency) appeared for the defendant.
Sally Dobson, barrister
