Waste-derived materials – Appellant in business of reprocessing oil – Producing waste-derived products for sale – EU introducing directive on waste processes affecting appellant’s business – Appellant hoping to avoid directive by producing “clean fuel oil” – Appellant formulating end of waste test – Whether clean fuel oil being regarded as waste for purposes of European Directive – Appeal allowed
The appellant company collected waste lubricating and fuel oils from businesses such as garages and workshops and converted it into marketable fuel oil. For many years, the largest and most profitable part of its business had consisted of reprocessing waste oils to produce recycled fuel oil.
From 2005, the Waste Incineration Directive 2000/76/EC was applied to existing waste operations and, if the appellant’s products were regarded as waste, within the Waste Framework Directive 2006/12/EC (WFD), a power station using its fuel would be subject to the more costly controls applying to a waste incinerator that would not apply if it were burning virgin fuel oil. The appellant attempted to anticipate the effect of the directive by investing in new processes, enabling it to produce a higher quality product called “clean fuel oil”, which it hoped would not be regarded as waste.
An issue arose as to when the appellant’s material ceased to be waste for the purposes of the WFD: (i) at the completion of the process of preparing it for use as fuel (as argued by the appellant); or (ii) when it was actually burnt (as argued by the respondent Environment Agency). The Administrative Court agreed with the respondent that a waste lubricating oil that was destined for combustion remained waste until it was burnt, regardless of the standard of any prior processing. The judge concluded that, in the light of the judgment in ARCO Chemie Nederland v Minister Van Volkshuisvesting, Ruimtelijke Ordening en Milieubeheer C-418/97 [2002] QB 646, even if the waste had been subject to a complete recovery operation, and had become “ex-waste” for certain purposes, it could revert back to being waste: see [2006] EWHC 3023 (Admin); [2006] PLSCS 250. The appellant appealed.
Held: The appeal was allowed.
Reviewing the various authorities on the WFD and related material, the correct formulation of the “end of waste test” was that a lubricating oil that was not originally used as fuel and that became waste could thereafter be burnt other than as waste, as the appellant had contended. The respondent’s test was too narrow. If it were correct, the mere fact that materials were destined for combustion would be enough to ensure their continuing categorisation as waste: Castle Cement v Environment Agency [2001] EWHC 224 (Admin); [2001] CMLR 19; Palin Granit Oy v Lounais-Suomen Ymparistokeskus C-9/00 [2002] 1 WLR 2644; R (on the application of Mayer Parry Recycling Ltd) v Environment Agency C-444/00 [2004] 1 WLR 538; and Criminal proceedings against Niselli C-457/02 [2004] ECR I-10853 considered.
A fundamental problem was the reluctance of the European Court of Justice to provide a definitive test and its professed adherence to the definition of waste in article 1(a) of the WFD as any substance that the holder “discards or intends… to discard”, even where it could be of no practical relevance. The subjective “intention to discard” might be a useful guide to the status of the material in the hands of the original producer. However, this was hard to apply to its status in the hands of a party that bought it for recycling or reprocessing, or that put it to some other valuable use.
Although the court continued to play lip-service to the discarding test, in practice it subordinated the subjective question implicit in that definition to a series of objective indicators derived from the policy of the directive. The national court was required to make a value judgment on the facts of the particular case in the light of those indicators: Scottish Power Generation Ltd v Scottish Environment Protection Agency (No 1) 2005 SLT 98 applied.
Robert McCracken QC and Stephen Tromans (instructed by Sharpe Pritchard and Semple Fraser LLP) appeared for the appellant; John Howell QC and Dinah Rose QC (instructed by Environment Agency Legal Services) appeared for the respondent; Derrick Wyatt QC and Kassie Smith (instructed by DEFRA) for the intervener.
Eileen O’Grady, barrister
