Hot issues: manufacturing, materials, and environment unit newsletter. Issue 28: May 2007

Meeting the Energy Challenge – A White Paper on Energy

In a statement to the House of Commons, Alistair Darling – Trade & Industry Secretary – said “We face two big challenges – climate change and maintaining stable and affordable energy supply in an increasingly unstable world."The Energy White Paper sets out a long term framework for action to address these challenges at home and abroad.

Announcements in the White Paper include:

• A requirement for new meters to come with a real-time display from 2008 and a short term offer of free displays from energy suppliers for households to 2010. In addition the Government is encouraging the introduction of smart meters, also with displays, in the household sector and for small firms and expects everyone to have a smart meter within 10 years, whilst requiring smart meters for all but the smallest of businesses in the next 5 years;
• A consultation setting out how the energy efficiency of consumer electronics will need to improve is published;
• A consultation to double energy suppliers’ current obligation to deliver energy efficiency measures to customers through a new ‘Carbon Emission Reduction Target’;
• A cap and trade ‘Carbon Reduction Commitment’ for large commercial organizations such as banks, supermarkets and large local authorities;
• A ‘Distributed Generation’ Report is published including simplification of energy market and licensing arrangements for localized energy by the end of 2008 and clearer export tariffs from all 6 major energy suppliers for microgenerators to sell excess electricity;
• Legislation to band the Renewables Obligation to benefit offshore wind, wave, tidal and other emerging technologies. The cap on the amount of co-firing generation qualifying for support will be removed;
• Publication of a Biomass Strategy as well as a response to ‘Creating Value from Renewable Materials’ – a 2 year progress report on the Strategy for Non-Food Crops and Uses;
• Detail on the competition announced in the Budget to build the world’s first end-to-end Carbon Capture and Storage plant, which will deliver at least 300MW capacity, 90% CO2 saving, and be up and running between 2011 and 2014;
• Legislation to allow the storage of natural gas under the seabed and unloading of Liquefied Natural Gas at sea;
• A 3 month deadline within which DTI will make consent decisions on large scale energy projects, pending more radical reforms set out in the Planning White Paper;
• A new energy market information and analysis service from this autumn;
• A Low Carbon Transport Innovation Strategy is published, backed by funding of £20m for public procurement of low carbon vehicles, and up to £30m R&D ‘Innovation Platform’ and £5m additional funding for the Energy Technologies Institute;

In addition, published alongside the White Paper were:

• A new consultation on the Government’s preliminary view that it is in the public interest to give private sector energy companies the option of investing in new nuclear power stations. A 20-week public consultation began on 23 May and will run until 10 October.
• A related consultation setting out the proposed ‘Justification’ and ‘Strategic Siting Assessment’ processes for new nuclear power. A ‘pre-licensing’ process has separately been started by HSE. Work on all 3 of these facilitative actions will be on a contingent basis alongside the main nuclear consultation.

More information about these can be found in the “New Consultations” section of this edition. A full copy of the Energy White Paper is available from the weblink below.

Energy White Paper: www.dti.gov.uk/energy/whitepaper/page39534.html

For further information from MME please contact: terry.martin@dti.gsi.go.uk  

New Waste Strategy for England

The revised Waste Strategy sets out the Government’s vision and strategic direction on waste for the next 20 years and takes account of the increasing concern about greenhouse gas emissions, the need to meet tough EU targets for diverting waste from landfill, and a renewed emphasis on resource efficiency and waste minimisation

The strategy follows a formal review of the Waste Strategy carried out in 2005, including extensive consultation.

http://www.defra.gov.uk/environment/waste/strategy/review/index.htm

UKTI – Advanced Engineering Sector Advisory Board (AdESAB)

The Board agreed to set up a focus group on India in respect of the planning for an event to be organised there in early 2008. Two other work groups are also being set up being set up. One to look at marketing the UK through leading edge technologies and a second to explore how Trade Associations can also help market UK advanced engineering.

For further information please contact:

Brian Greenwood (MME) brian.greenwood@dti.gsi.gov.uk who represents DTI Business Relations on AdESAB, or

Janet Tingle
Head of Engineering, Advanced Engineering Sector
UK Trade & Investment
Room 26, 6th Floor, Tay House, 300 Bath Street, Glasgow, G2 4DX
T: + 44 (0)141 228 3617
F: + 44 (0)141 228 3627

janet.tingle@uktradeinvest.gov.uk

High Level Group on Competitiveness, Energy, and the Environment (HLG-CEE)

The HLG-CEE is organizing an international conference on how competitive advantages of a transition to a low carbon global economy can be achieved. The Conference will take place in Brussels on 27 November. The final format is still to be decided, but the intention is that the conference will enable business and non-governmental organisations to complement the United National process of agreeing a global greenhouse gas emissions reduction.

The HLG-CEE was established in February 2006 with a two year mandate. Its formal work concludes with the conference in November. The Group is comprised of European Commissioners from Enterprise, Energy, Competition and Environment. It also has senior board level representation from some of Europe’s major industries and Non-Governmental Organisations. The Group also receives cabinet level representation from the UK, Germany, Portugal, Austria and Finland.

The role of the Group is to concentrate on increasing Europe’s Competitiveness, securing energy and other resource supplies and advising on how Europe can make the transition to a low carbon economy without damaging the other two objectives. It is an advisory Group which produces reports containing recommendations; these are published on the Group’s website. The impact of the Group is wide ranging and its recommendations can be seen reflected in the Energy and Climate Change package and the forthcoming review of industrial policy.

In addition to examining how to engage the international community into taking action on climate change, the Group is also investigating better regulatory approaches for energy intensive industries and its findings should become known in the Fifth Report in November

High Level Group website http://ec.europa.eu/enterprise/environment/hlg/hlg_en.htm

For further information please contact: Faith Quigley (MME) faith.quigley@dti.gsi.gov.uk

EnginEurope

The report is available on the Commission’s Europa website http://ec.europa.eu/enterprise/mechan_equipment/engin/study.htm

For further information please contact: Brian Greenwood (MME) brian.greenwood@dti.gsi.gov.uk

Update on Implementation of Cox Review

The Design Council, Higher Education Funding Council for England (HEFCE), RDAs, OGC and HMT have taken ownership for the delivery of the specific recommendations of the review. DTI (BR/MME) are overseeing the implementation of the Cox Review’s recommendations. Good progress has been made in implementation of the recommendations.

1. Raising awareness and understanding: The Design Council's Designing Demand programme will be delivered by all RDAs and devolved authorities. Cox recommends that it be started in all regions within 2 years so that it can have the scale of impact needed while UK businesses still have the opportunity to take advantage of developing economy markets.

Update: RDAs have actively welcomed the Cox Review. All RDAs are either already committed to creativity and design programmes or are actively considering how the Designing Demand programme (previously called Design for Business) can best be implemented. Designing Demand programme is already running in South Yorkshire, SEEDA and AWM regions. Full roll out across UK regions is expected by end of 2008. Cox review set a target of taking 6500 businesses through this design specific business support programme by 2010. Current expectation is that this target will be met.

2. Providing support and incentive: The current HM Treasury review of the R&D Tax Credits should consider particular changes to increase its effect on smaller businesses.
Treasury has already accepted some of the recommendations for changes to the R&D Tax Credits system to benefit SMEs.

Update: On 1 November 2006, HMRC launched a nation-wide series of specialist units dedicated to improving processing of R&D tax credit claims. This should lead to greater consistency in dealing with claims, and more certainty for companies making claims. For more information see www.hmrc.gov.uk/randd/special-units.htm

The DTI, in conjunction with HMRC and HM Treasury, have published a brochure of case studies demonstrating the relative ease of making a claim - ‘Companies’ experiences of Applying for R&D tax credits’. Major business organisations have endorsed the publication, which can be accessed at http://www.dti.gov.uk/innovation/randd/randd-tax-credits/page11350.html.

3. Preparing future generations of creative specialists and business leaders: Centres of excellence should be established for multidisciplinary courses combining management studies, engineering and technology and the creative arts.

HEFCE are looking at how their Strategic Development Fund could support the Higher Education Institutes who have expressed interest in developing Centres of Excellence to pursue multidisciplinary courses. HEFCE are appraising at least 6 project proposals from Universities and institutions. HEFCE have tasked HE Academy to network and disseminate Cox insights across HE sector. Considerable progress has been made in recent months and in May 2007 HEFCE awarded significant funding towards £5.8m for the first centre of excellence, in London. Design-London at RCA-Imperial will create an ‘innovation triangle’ between design (represented by the Royal College of Art), engineering and technology (represented by Imperial College Faculty of Engineering) and the business of innovation (represented by Imperial’s Tanaka Business School). Feasibility funding has also been awarded by HEFCE for development of Northumbria University's Design and Innovation Lab and collaborative project funding given for research by the West Midlands HE Association. In addition to these, 5 other multi-disciplinary projects are currently being developed.

4. The approach to public procurement, both for central government and local bodies, should be changed to encourage more innovative solutions from suppliers: There has been considerable positive activity especially with regard to early procurer engagement with suppliers, simplifying the prequalification questionnaire process and development of guidance on how procurers can go about procuring innovation.

The recent HMT ‘Transforming Government Procurement’ paper was very welcome. It highlighted the role that innovation plays in delivering value for money, including by better linking of the Technology Strategy Board with procurement opportunities.

5. A network of ‘Creativity and Innovation’ centres should be established throughout the UK, with a central hub in London: Work here has concluded that there is a strong case for an International Design-Business Exchange (IDX), an international market place for design-led innovation and ideas. This centre could act as the hub of an international network of design expertise, bringing together new thinking and practice on design and business, with an inspirational programme of activity to the benefit of business and the UK economy. The Design Council is now progressing the work to determine how a prototype programme might operate, working with the LDA.

For further information please contact: Annie Norgrove (MME) annie.norgrove@dti.gsi.gov.uk

European Commission greenhouse gas emissions targets

Further details can be accessed from the European Commission Environment DG website at the link below.

EU Climate Change:  http://ec.europa.eu/environment/climat/home_en.htm

For further information please contact: Terry Martin (MME): terry.martin@dti.gsi.gov.uk 

Emissions Trading Scheme

The EU Emissions Trading Scheme is a community-wide scheme established for trading allowances to cover the emissions of greenhouse gases from permitted installations. Along with a number of other sectors, steel production is captured by the scheme, as are any combustion plants that have an aggregated thermal input of over 20MW. Phase I of the Scheme runs from 2005 to 2007 and Phase II from 2008 to 2012.

On 16 March the Government published the approved National Allocation Plan and final list of installation-level allocations for industry for Phase II of the Scheme. The final list sets out the annual allocations for individual installations covered by the scheme for the years 2008-2012 and will deliver savings of 29MtCO 2 each year. The final list of allocations, which can be accessed below, has been notified to the Commission. The Commission also has a website (link below) containing their assessment of other member states NAPs.

The European Commission is currently discussing the future of the scheme (post 2012) with Member States Governments and stakeholders, and is expected to publish a proposal later this year. The Commission have flagged up priorities for the review of the scheme: scope; robust compliance and enforcement; harmonisation and increased predictability; and linking to other trading schemes around the world . In line with this process business, government and the environmental lobby published a Manifesto on 6 March setting out how the UK wants to see the emissions trading scheme develop. The Manifesto can be accessed from the link below.

On 30th March an issues paper was made available to stakeholders on the Defra website, providing the opportunity to input views on the future design and functioning of the EU ETS. The deadline for responses to this paper was Friday 11th May, and those received will be used to help develop our policies in this area. A formal consultation is intended to be issued in due course, following the publication of the Commission’s legislative proposal for the Review of the EU ETS Directive, expected towards the end of 2007.

Approved UK National Allocation Plan (phase II) http://www.defra.gov.uk/environment/climatechange/trading/eu/phase2/phase2nap.htm

European Commission Assessment of Phase II NAPs http://ec.europa.eu/environment/climat/ip_1650.htm

UK Manifesto on the EU Emissions Trading Scheme http://www.defra.gov.uk/environment/climatechange/trading/eu/future/index.htm

For further information please contact: Faith Quigley (MME): faith.quigley@dti.gsi.gov.uk

Enforcement of REACH in the UK

Views are sought on proposals for the UK enforcement of the new EU Regulation on chemicals – REACH (Registration, Evaluation and Authorisation of Chemicals).

The consultation close on: 04 June 2007

www.defra.gov.uk/corporate/consult/reach-enforce/index.htm

Review of Exemptions from Waste Management Licensing

The consultation close on: 8 June 2007 http://www.defra.gov.uk/environment/waste/management/exemptions/pdf/exemptions-discussion.pdf

Changes to Permitted Development: Consultation Paper 1 - Permitted Development Rights for Householder Microgeneration

The consultation close on: 27 June 2007

www.communities.gov.uk/index.asp?id=1508888

30th amendment to Council Directive 76/69/EEC regarding restrictions on the marketing and use of Perfluorooctane sulphonates (PFOS) - Directive 2006/122/EC

Views are sought on how the United Kingdom intends to transpose a European Commission Directive 2006/122/EC which will introduce restrictions on the marketing and use of Perfluorooctane sulphonate (PFOS) and substances that break down to it.

The consultation close on: 28 June 2007

www.defra.gov.uk/corporate/consult/pfos2007/index.htm

Working together: your role in our environmental permitting decision making The Environment Agency are consulting on Working together: your role in our environmental permitting decision making between 13 April and 6 July 2007

Working together is for any individual or organisation that is interested in environmental permitting decisions taken by the Environment Agency through the Environmental Permitting Regulations. It may be of interest to:

• the public, community groups where an activity is taking place;
• industry and business if they are permitted by EA or want to apply to carry out a permitted operation;
• other regulators, environmental interest groups and other non-governmental organisations

The consultation pages will help you to find out how and when you can get involved in the permitting decisions taken by us through the proposed Environmental Permitting Regulations. The pages also:

• Defines the scope of what EA will consult on in relation to environmental permitting
• Sets out when EA will consult with communities and industry on environmental permitting decisions and the development of standard permits
• Identifies organisations that EA need to develop new ways of working with

The consultation close on: 06 July 2007

www.environment-agency.gov.uk/yourenv/consultations/1740445/?version=1&lang=_e

Site waste management plans for the construction industry

Government is also concerned about the small but increasing amount of construction waste that is illegally dumped or fly-tipped. As waste controls tighten there is an increased risk of companies inadvertently employing illegal waste operatives.

Powers were included in the Clean Neighbourhoods and Environment Act 2005 for regulations requiring a site waste management plan (SWMP) for works involving construction or demolition waste. Following the voluntary code of practice launched by DTI in 2004, Defra has developed proposals for compulsory site waste management plans in England. (A similar consultation is expected in Wales later in the year.) SWMPs aim both to reduce fly-tipping and to promote the potential resource savings from minimising waste.

The consultation package includes an explanation of the proposals, a partial regulatory impact assessment and draft regulations. Views are invited from all those with an interest in the construction industry and protecting the environment from waste crime.

The consultation close on: 09 July 2007

www.defra.gov.uk/corporate/consult/construction-sitewaste/index.htm

Guidance to Local Authorities in England and Wales on Climate Change Mitigation and Fuel Poverty

The Climate Change and Sustainable Energy Act 2006 commits the government to producing an 'energy measures report' by August 2007. This report must contain information on measures that local authorities can take in order to:

• Improve energy efficiency;
• Increase the levels of microgeneration;
• Reducing greenhouse gas emissions; or
• Reducing the number of households living in fuel poverty.
  

Local authorities will have to 'have regard' to this report when exercising their functions.

The consultation seeks written views, from local government and others, on the approach the government should take towards the report.
The report will form part of a wider package of measures taken forward in England and Wales to ensure that more local authorities take action on climate change and sustainable and affordable energy.

The consultation close on: 01 August 2007

www.defra.gov.uk/corporate/consult/ccmitigatefuelpov-laguid/index.htm

Proposals for amendments to The Environmental Protection (Controls on Ozone-Depleting Substances) Regulations 2002 (SI 2002 No 528) and The Ozone-Depleting Substances (Qualifications) Regulations 2006 (SI 2006 No 1510)

The ozone layer protects all living things from harmful radiation from the sun. The Montreal Protocol is an international agreement that has led to successive cuts in production and consumption of ozone-depleting substances. EC ozone legislation gives effect to these requirements and in some ways goes beyond those international requirements. SI 2002 No 528 created offences and penalties for failure to comply with the EC legislation and provided enforcement powers. The proposed amending Regulations are intended to:

• Set requirements for persons intending to fumigate with methyl bromide for quarantine or pre-shipment purposes to obtain prior authorisation from port health authorities and local authorities;
• amend the powers currently provided for enforcement of the obligations in EC Regulation 2037/2000 on substances that deplete the ozone layer so as to provide additional enforcement powers for the Environment Agency, the Scottish Environment Protection Agency and local authorities and to remove references to any functions to be exercised by the Health and Safety Executive;
• apply the relevant provisions of the amended SI 2002/528 to offshore oil and gas installations;
• Set new offences and penalties in relation to failure to supply information/records about halon exports and production/use of bromochloromethane in breach of EU/international bans;
• provide powers for the Secretary of State to require persons to dispose of improper exports of a controlled substance, a product or equipment and for it to be an offence for failure to do so.
  

These Regulations will be applicable to England, Scotland, and Wales (including offshore oil and gas installations which fall within the remit of the Department of Trade and Industry (DTI)) and in relation to importation, in Northern Ireland. Separate Regulations will be issued by the Department of the Environment in Northern Ireland.

The proposed amendment to the Ozone Depleting Substances (Qualifications) 2006 makes a minor addition in relation to fire protection qualifications.

The consultation close on: 14 August 2007

www.defra.gov.uk/corporate/consult/ozone/index.htm

Proposals for offences and penalties and enforcement in relation to EC Regulation 842/2006 on certain fluorinated greenhouse gases

Key obligations in the Regulation will apply in the EU from 4 July 2007. Member states are required to put in place offences and penalties for failure to comply with the Regulation.

The principal objective of the EC Regulation is to contain, prevent and thereby reduce emissions of F gases covered by the Kyoto Protocol. The main provisions in the Regulation deal with containment through responsible handling during use, recycling and end-of-life recovery; reporting requirements and certain application specific bans on use and placing on the market.

The consultation includes the proposed GB offences and penalties Regulations which sets out offences for each of the key obligations in the EC Regulation and penalties for failure to comply and a draft partial Regulatory Impact Assessment. The proposed Regulations also provide proposed powers for enforcing bodies as well as for the Regulations to apply to offshore oil and gas installations.

The consultation close on: 14 August 2007

www.defra.gov.uk/corporate/consult/f-gas/index.htm

Carbon Emissions Reduction Target April 2008 to March 2011

The consultation close on: 15 August 2007

www.defra.gov.uk/corporate/consult/cert2008-11/index.htm

United Kingdom Atomic Energy Authority application to increase authorisation to dispose of radioactive waste from the Winfrith nuclear site in Dorset

The consultation close on: 15 August 2007

www.environment-agency.gov.uk/yourenv/consultations/1117276/?version=1&lang=_e

Waste Strategy for England 2007: Incentives for Recycling by Households

The consultation close on: 16 August 2007

Planning for a Sustainable Future

The consultation close on: 17 August 2007

www.communities.gov.uk/index.asp?id=1510731

Renewable Energy: Reform of the Renewables Obligation

In the 2006 Energy Review Report the Government announced a number of proposals for changes to the Renewables Obligation. These changes would provide differentiated support levels to different renewables technologies and give additional certainty on long-term Renewable Obligation Certificate prices. These changes to the RO will require new primary legislation and so will not be introduced until April 2009 at the earliest.

On 9 October 2006 the Government published an initial consultation document on these proposals. This closed on 5 January 2007.

This latest consultation document published on 23 May 2007 sets out in more detail the proposals to reform the RO.

To inform this consultation document the DTI commissioned work on a number of aspects of these proposals.

The consultation close on: 6 September 2007

www.dti.gov.uk/consultations/page39586.html

The future of nuclear power: the role of nuclear power in a low carbon UK economy

The Government is consulting on the future of nuclear power in the UK. DTI want you to take part in this. You can visit the interactive website where you can submit your response directly online.

The consultation seeks views on the information and arguments set out on whether the private sector should be allowed to build new nuclear power stations.

DTI want to hear from members of the public, industry, non-Governmental organisations (NGOs) or any other organisation or public body.

DTI are seeking views on whether the Government has considered the relevant arguments; whether DTI have considered the arguments reasonably and whether there are other important arguments DTI have overlooked.

Your views will contribute to the shaping of the policy on the future of civil nuclear power in the UK. They will help Government assess the arguments before it reaches its final decision on the future of new nuclear build.

DTI will consider carefully the responses it gets and this will enable DTI to take a decision on nuclear later in the year.

Technical consultations: Justification and Strategic Siting Assessment

Alongside this in-principle consultation there is a linked technical consultation on the details of running a Justification process and a Strategic Siting Assessment.

The consultation close on: 10 October 2007

www.dti.gov.uk/consultations/page39704.html

Draft Climate Change Bill

The consultation close on 12 June 2007

Tax incentives for development of Brownfield land

The Government is committed to a step change in housing supply and at the 2005 Pre-Budget Report set out an ambition to increase housing supply by 200,000 net additional homes by 2016. At the same time it is committed to maintaining a high proportion of development on brownfield sites. The Barker Review of housing supply in 2004 recommended that land remediation relief should be extended to give help to long term derelict sites and the Barker review of land use and planning (2006) recommended that the government should consult on reform of land remediation relief to ensure that it brings forward new development on hard to remediate sites.

Budget launches the consultation on improving the effectiveness of the two tax incentives for cleaning up contaminated land, land remediation relief and the exemption from landfill tax for waste from contaminated land. The consultation covers:

• Long term derelict land
• Improving the development focus
• Timing issues in land remediation relief
• Japanese Knotweed
• the landfill tax exemption for waste from contaminated land

Any legislation needed following the consultation will not be enacted before 2008.

The consultation close on 14 June 2007.

www.hm-treasury.gov.uk/budget/budget_07/documents/bud_bud07_brownfield.cfm

Manufacturing Advisory Service (MAS)

MAS owes much of its success to the strong partnership between DTI, RDA s and other key stakeholders who provide access to free (for SMEs) hands-on advice and assistance from professional experts. More than a third of firms have gone on to take up in-depth project work with the service at a subsidised rate, enabling them to achieve a competitive edge through adopting global best practice in manufacturing.

From April 2008, MAS will offer a greatly extended range of help and advice covering;

• Operational efficiencies beyond the shop floor to all aspects of manufacturing companies activities;

• Promoting innovation through implementing best practice in development and commercialisation of new products;

• Strategic planning and skills development;

• Sourcing materials, services and technology;

• Improving the performance and operation of the supply chain;

• Improved resource efficiency in both energy and waste

You can register with the national website to receive a regular e-newsletter in order to find out about recent news and forthcoming events involving MAS.

For further information about the services offered by MAS, go to the MAS national website www.mas.dti.gov.uk

or get in touch with your local MAS Regional Centre direct by calling the MAS helpline number 0845 658 9600.

DIRECTOR
Robert Sullivan
0207 215 1474
robert.sullivan@dti.gsi.gov.uk

Manufacturing

Energy and Environment Policy

Sector Knowledge

Central Team

Dean Thomas
Senior Policy Advisor
Environmental industries
020 7215 1283
Dean.Thomas@dti.gsi.gov.uk