Policy News - March 2020

Policy News, March 2020

Special Covid-19 News, Highlights from the Spring Budget, Resources & Waste, Energy, Water and Environment & Climate

The latest updates on the policies affecting your business.

Content

  • COVID-19 News
  • Spring Budget
    • Resources and Waste
    • Energy
    • Climate and Environment
    • Carbon Pricing 
    • Other amendments and changes
  • Resources & Waste
  • Energy
  • Water
  • Environment & Climate

COVID-19 News

During the current Coronavirus (COVID-19) situation which is seriously affecting the UK, waste, water and energy are included within the specified critical sectors required to keep operating during the lockdown.

  • Coronavirus Action Plan
    The Prime Minister introduced an official coronavirus action plan with the Government's 4-stage strategy to contain, delay, research and mitigate. In relation to the Resources and Waste industry, Defra and the Environment Agency are in weekly contingency talks with the waste industry and local authorities ensuring street cleansing collection and treatment services continue to operate in the interests of protecting public health.

  • 'Key Worker' status
    Waste management, energy and water employees have been granted ‘key worker’ status by the Government. This means that they will continue to receive priority educational and care provision for their children during the current coronavirus crisis. Defra considers this category to apply to all employees engaged in frontline household and non-household collection services; those who operate waste collection and treatment facilities; sewage treatment works and energy centres etc and the support staff necessary to keep these vital services running.

Spring Budget

On 11 March, the Chancellor delivered the Spring Budget for 2020 providing an update on the financial state of the UK and outlining the Government's plans for tax and spending for the financial year starting in April.

Resources and Waste

  • UK-wide Plastic Packaging Tax from April 2022 at a rate of £200 per tonne of plastic packaging that contains less than 30% recycled plastic, applicable to the production and importation of filled and unfilled plastic packaging. De minimis threshold set at 10 tonnes of plastic packaging to ensure the smallest businesses are not disproportionately impacted. The Budget also included the launch of a further consultation on the detailed design and implementation of the tax, open until 20 May 2020.
  • Commitment of £700,000 to develop IT capability to administer the future EPR scheme for packaging.
  • Launch of a £2 million fund to support innovative approaches to tackling fly-tipping.
  • Updated Landfill Tax rates for 2020 and 2021 to take effect on 1 April 2020: standard rate £94.15/tonne; lower rate £3.00/tonne.

Climate and Environment

  • Funding for heat networks: the Budget confirmed £96 million for the final year of the Heat Networks Investment Project, ending in March 2022.
  • Domestic Renewable Heat Incentive extended until 31 March 2022 and introduction of a new allocation of flexible tariff.

Climate and Environment

  • Funding for net zero policy: additional £10 million in 2020-21 to support the design and delivery of net zero policies and programmes.
  • Increasing the gas rates under the Climate Change Levy (CCL) to £0.00568/kWh in 2022-23 and to £0.00672/kWh in 2023-24 whilst freezing the rates on electricity. LPG will be frozen at 2019-20 levels till April 2024.
  • Extension of the Climate Change Agreement (CCA) scheme by two years. The CCA scheme allows businesses
  • Nature for Climate Fund: investment of £640 million in afforestation and peatland restoration in England.
  • Air quality: additional £304 million to reduce nitrogen dioxide emissions.
  • Red diesel: The Government will remove entitlement to the use of red diesel and rebated biofuels from April 2022, except for agriculture, rail and for non-commercial heating (including domestic heating) and will consult on whether the entitlement to use red diesel and rebated biofuels is justified for any other users.

Carbon Pricing

  • The Government will freeze the rate of the Carbon Price Support at £18t/CO2 e in 2021-22.
  • Carbon pricing: the UK will continue to apply a carbon price from 1 January 2021.

Other

  • Review of PFI contracts: the Government will now focus on making sure that the 600 existing PFI contracts are well managed and represent value for money and will allocate £2 million in 2020-21 to carry out targeted contract reviews.
  • Corporation tax rate will remain at 19% in 2020.
  • R&D investment: increase in investment in science, innovation and technology to £22 billion by 2024-25.
  • Apprenticeship Levy: the Government will look at how to improve the working of the Levy, to support large and small employers in meeting the long-term skills needs of the economy.

Defra releases the annual waste statistics for the UK, recycling rate decreases by 0.5%

The UK recycling rate for household waste (including incinerator bottom ash) decreased in 2018 by 0.5%, reaching 45%. The recycling rate for household waste decreased in all UK nations except Northern Ireland: England 44.7%, Scotland 42.8%, Wales 54.1%, Northern Ireland 47.7%.

  • UK biodegradable municipal waste sent to landfill: 2018: 7.2 million tonnes 2017: 7.4million tonnes
  • Recycling or recovery of Packaging Waste: 2017: 70.0%* 2016: 71.4% *paper and cardboard 79.0% - metal 71.1% - glass 67.6%
  • The UK generated 26.4 million tonnes of household waste in 2018, a decrease of 1.8% compared to 2017. Household waste generation has decreased in all UK nations for the last two years. England is responsible for the majority of the household waste, generating 22.0 million tonnes in 2018.

Legislation to ban plastic straws, stirrers and cotton buds enters Parliament

Single-use plastics are defined as all products that are made wholly or partly of plastic and are typically intended to be used just once and/or for a short period of time before being disposed of. The Government will ban the supply of plastic stirrers. The supply of plastic stemmed cotton buds will also be banned with an exemption for medical practice, scientific research and forensic purposes to support criminal investigation.

Green Alliance report: only circular economy will solve the plastic problem

A new report by the think tank Green Alliance argues the UK’s throwaway habit is not being addressed by the strategy on resources and waste and that it actually risks detracting from the wider need to improve the sustainability of resources used and cut waste across the country.

  • The plastic-only approach is not working and the report says that the whole system of resource use and management needs a fundamental rethink to prevent environmental harm.
  • It recommends that any material use meets three overarching requirements: safety, sustainability and efficiency. 

Scotland: DRS implementation date pushed back, the Circular Economy Bill dropped

As final Regulations for the scheme were laid in the Scottish Parliament, the Environment Secretary Roseanna Cunningham confirmed that the Deposit Return Scheme (DRS) will be pushed back from the original start date of 1 April 2021 to 1 July 2022 to give retailers and producers time to prepare for a successful scheme from day one while also allowing flexibility in light of the coronavirus outbreak.

  • Note that a coalition of major drinks producers and trade bodies has expressed its intention to apply as a scheme administrator (the British Beer & Pub Association, the British Soft Drink Association; and the Natural Source Waters Association).
  • The Scottish Government has decided that there is insufficient time to introduce all of the primary legislation in this parliamentary session. The Circular Economy Bill is one of the Bills that will not be progressed. Ministers said that circular economy objectives will be delivered through the implementation of the DRS, the UK-wide EPR Scheme for packaging and the Food Waste Reduction Action Plan.
  • The Scottish Climate Change Plan expected at the end of April has been pushed back in light of the coronavirus outbreak.

Scotland: DRS implementation date pushed back, the Circular Economy Bill dropped

As final Regulations for the scheme were laid in the Scottish Parliament, the Environment Secretary Roseanna Cunningham confirmed that the Deposit Return Scheme (DRS) will be pushed back from the original start date of 1 April 2021 to 1 July 2022 to give retailers and producers time to prepare for a successful scheme from day one while also allowing flexibility in light of the coronavirus outbreak. 

Welsh Government plans to ban single-use plastics from next year

In March, the Welsh Government announced a ban on the sale of single-use plastics by mid-2021. The plastics affected include straws, stirrers, cotton buds, balloon sticks, plates and cutlery, food and drinks containers made of expanded polystyrene, and products made from oxo-degradable plastic, such as certain types of carrier bags. A public consultation on the ban is expected soon.

Energy

BEIS consults on changes to the Contracts for Difference Scheme

The Government is seeking views on a number of proposed changes to the Contracts for Difference (CfD) scheme to ensure it continues to support low carbon electricity generation at the lowest possible cost to consumers. The consultation proposes changes that would, if implemented, apply to contracts awarded through future allocation rounds, the next of which is planned to open in 2021 subject to any required state aid approval of planned changes. The consultation is open until 22 May 2020. The proposed changes relate to:

  • delivering the UK’s 2050 net zero emissions target
  • bioenergy
  • allocation round design
  • improving the operation of the CfD
  • supporting a smart, flexible system

Updates on the Heat Decarbonisation Roadmap: expect a cross-departmental strategy

In response to written parliamentary questions on the future of the Heat Decarbonisation Roadmap, BEIS Minister Kwasi Kwarteng confirmed that the Government is planning to publish a cross-departmental Heat and Building Strategy later this year, which will set out the immediate actions it will take for reducing emissions from buildings. These actions include the deployment of energy efficiency measures and low carbon heating technologies to deliver low carbon heating in the 2020s and meet the climate targets. He also recognised that waste heat capture can play an important part in the decarbonisation of heat, as it is a cost-effective form of low-carb

Water

Environment Agency launches the National Framework for Water Resources

The Environment Agency has launched a long-term plan, the
National Framework for Water Resources to transform the
use of water supplies. The framework will help reduce
demand, halve leakage rates, develop new supplies, move
water to where it’s needed and reduce the need for drought
measures that can harm the environment. The framework
looks to ease the pressure on the future water supplies by:

● Reducing demand to an average of 110 litres per person
per day by 2050
● Improving water efficiency across all sectors
● Working with water companies to halve leakage rates by
2050
● Developing new supplies such as reservoirs, water reuse
schemes and desalination plants

National Audit Office publishes report on water supply and demand management

The NAO recommends water companies need to
work together across geographical boundaries to improve
the resilience of the water supply. Key findings from the
report include:
● The Government cannot currently reliably forecast total
water demand. Water supply is forecast to decrease by 7%
by 2045.

● Defra doesn’t provide guidance to water companies on the
types of interventions possible to improve resilience and
hasn’t been able to make water efficiency a
cross-Government priority
● Companies have had difficulty in determining the level of
infrastructure investment deemed acceptable.
● Attempts to reduce non-household water consumption
through competition haven’t worked.

Environment & Climate

Updates on the Environment Bill: legislative scrutiny postponed

The House of Commons Scrutiny Unit has announced that
due to the COVID-19 outbreak, the work of the
Environment Bill Committee has been temporarily
suspended
. It was agreed that proceedings will be
postponed until 28th April at the earliest. However, the Public
Bill Committee is still able to accept written evidence on the
Environment Bill until 5 May 2020.

UK’s latest statistics on greenhouse gas emissions: 3.6% lower than in 2018

BEIS released the latest provisional estimates of UK
greenhouse gas emissions. In 2019, total UK greenhouse
gas emissions were provisionally 3.6% lower than in 2018
.
UK net emissions of carbon dioxide were provisionally
estimated to be 351.5 million tonnes (Mt), which is 3.9%
lower than 2018 (365.7 Mt). The energy supply sector was

the largest contributor to the decrease in carbon dioxide
emissions between 2018 and 2019. Transport remains the
largest source of carbon dioxide emissions, accounting for
34% in 2019 with a large majority of emissions from transport
coming from road transport.