Environmental Law Quarterly Update – Q1 2023

This quarterly environmental law update provides a summary of news stories in the period January 2023 – March 2023.

January

CMA to investigate greenwashing in FMCG sector

On 26 January 2023, the Competition and Markets Authority (CMA) announced plans to examine the accuracy of green claims in the fast-moving consumer goods (FMCG) sector. The CMA will examine green claims about household products to determine whether they comply with the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277).

According to the CMA, a significant number of household products are marketed as green or environmentally friendly, including up to 91% of all dishwashing items and 100% of toilet products. The CMA said they are “concerned many shoppers are being misled and potentially even paying a premium for products that aren’t what they seem”. Products that will be reviewed include: food and drink, household cleaning products, homecare products (for example, toilet roll, kitchen roll and handwash) and personal care products (for example, toothpaste, shampoo and bodywash).

If the review uncovers evidence of misleading green claims, the CMA will consider taking enforcement action. The decision to review the FMCG sector follows the CMA's scrutiny of green claims in the fashion industry and its decision to investigate ASOS, Boohoo and George at Asda in relation to potentially misleading claims about their products. You can read more about this and the CMA’s focus in our previous blog post.

 

Challenge launched to approval of new Cumbrian coal mine

On 16 January 2023, Friends of the Earth (FoE) announced it had applied for judicial review to challenge the Secretary of State's (SoS) December 2022 decision to grant planning permission for a new coal mine in Cumbria.

FoE's grounds for the challenge are:

• Ground 1: Use of carbon offsetting. The SoS was wrong to conclude that the mining company's commitment to buy international carbon credits to offset residual emissions from the mine meant that the mine would be net zero for the purposes of the sixth carbon budget.
• Ground 2: International implications. The SoS's decision letter was unlawful in not addressing the international implications. FoE argue that the decision undermines the UK's claims for global climate leadership and sets a precedent for other countries, leading to increased global emissions.
• Ground 3: Substitution. The SoS's conclusion that there would be no net increase in carbon emissions from coking coal from the mine (because there would be some substitution for other coal in the market) failed to address that there needed to be a complete substitution of SCM coal to reach a neutral effect.
• Ground 4: Scope 3 (downstream) emissions. The SoS followed the decision in R (Finch) v Surrey County Council [2022] EWCA Civ 187, in which the Court of Appeal said that the environmental statement should only assess the emissions that would be produced from the operation of the development and should not assess downstream emissions. That decision was subject to an appeal to the Supreme Court which, if successful, would likely make this approach incorrect.

 

£650,000 fine for International Paint Ltd after hazardous waste was discharged into the Yealm estuary

International Paint Ltd, which is owned by AzkoNobel, was found guilty, following a nine-day trial, of offences under the Environmental Permitting (England and Wales) Regulations 2010 and the Environmental Protection Act 1990. The convictions followed an EA investigation which found that hazardous chemicals had been discharged into the river Yealm estuary between 2 September 2015 and 27 October 2016. The estuary is a Special Area of Conservation.

The issue came to light after potential pollution was reported when the company attempted to sell its premises in 2015. It was found that tributyltin (TBT), copper, arsenic and mercury was in a tank on site, and some of the sediment had entered the river. An expert who examined the site found nine of the eleven samples exceeded the safe limit for TBT, concluding that the estuary levels could have a “major toxic effect on marine life”.

The company was found guilty of causing a water discharge activity otherwise than as authorised by an environmental permit and failing, as a person who produces controlled waste, in its duty to take all such measures applicable to them in that capacity as were reasonable in the circumstances. The company was fined £650,000 and ordered to pay costs of £144,992.

 

February

Government announces debut Highly Protected Marine Areas

The Department for Environment, Food and Rural Affairs (Defra) aims to designate the first Highly Protected Marine Areas (HPMAs) before 6 July 2023. According to an announcement made on 28 February 2023, the three HPMAs will be in English waters, at Allonby Bay in the Irish Sea, Dolphin Head in the Eastern Channel, and North East of Farnes Deep, in the northern North Sea.

There is already a network of Marine Protected Areas (MPAs) which cover 40% of English waters, but the HPMAs will add further protections. By designating these specific areas of the sea and shoreline, the marine ecosystems should be able to recover fully, and thrive. Within HPMAs, all species, habitats and associated ecosystem processes are protected.

 

Plans to target illegal waste are unveiled

On 6 February 2023, Environment Minister, Rebecca Pow, revealed changes aimed at targeting waste crime and dangerous practices at waste sites. The proposals will mean more sites will require an environmental permit, and businesses will be required to improve their record keeping.

In England and Wales, there are a number of exemptions to the waste permit scheme, and these provide a means for those carrying out certain low-risk, small-scale waste activities to use a simple registration scheme instead. The government says that exemptions have been used a way of hiding illegal waste activities and evading landfill taxes. This has led to losses of approximately £87.2 million annually.

The government’s Environmental Improvement Plan included proposals to remove three of the ten waste exemptions of most concern (and tighten the remaining seven), as well as a pledge “to seek to eliminate waste crime by 2043.” The three exemptions to be removed cover the use of depolluted end-of-life vehicle parts, the treatment of tyres, and the recovery of scrap metal.

In 2018, the government consulted on proposals to tackle crime and poor performance in the waste sector, and it says the results of this consultation have led to plans “to introduce greater record-keeping requirements for all waste exemption holders; impose limits and controls on how multiple exemptions can be managed at one site; and ban the use of exemptions at a site operating under an environmental permit, or where there is a ‘direct link’ between the exempt and permitted activity.”

 

New Green Infrastructure Framework for England

Natural England, a non-departmental public body which is sponsored by the Department for Environment, Food and Rural Affairs, has launched a new tool which integrates green infrastructure tools, principles, standards and design guidance. The agency says the Green Infrastructure Framework (GIF) aims to make the country’s towns and cities greener and will help increase the amount of green cover to 40% in urban residential areas.

The GIF is aimed at planners and developers and sets out a structure to analyse where greenspace in urban environments is needed most. It aims to address the current imbalance in access to greenspace; reportedly, 80% of England’s population now live in towns and cities, and one-third do not have access to good quality green and blue space within a 15-minute walk of where they live (a goal of the government’s Environmental Improvement Plan).

The GIF is based on a framework provided by five key standards:

1.Urban Nature Recovery Standard – a measure to boost nature recovery, create and restore rich wildlife habitats and build resilience to climate change.

2.Urban Greening Factor (UGF) for England – a planning tool aiming to improve the provision of green infrastructure and increases the level of greening in urban environments.

3.Urban Tree Canopy Cover Standard – promotes an increase in tree canopy cover in urban environments. The standard sets out that major residential and commercial development should be designed to meet locally agreed targets.

4.Accessible Greenspace Standards – promote access to good quality green and blue space within a 15-minute walk.  

5.Green Infrastructure Strategy – supports the National Planning Policy Framework’s policy which states that local authorities should develop strategic policies for green infrastructure.

The GIF is accompanied by a Design Guide to provide what Natural England says is a comprehensive tool which “will support local planning authorities and developers to design and create more nature-rich urban greenspaces to meet mandatory Biodiversity Net Gain requirements and support the development of the Nature Recovery Network.”

 

ClientEarth sues Shell for failing to adopt Paris-compliant energy strategy

ClientEarth, an environmental NGO, has brought a derivative claim against the board of Shell plc.

The claim was issued on 9 February 2023 in ClientEarth’s capacity as a shareholder, and is supported by a group of institutional investors including pension funds from the UK (Nest and London CIV) and overseas. The group holds more than 12 million shares in Shell plc in total.

The grounds of the claim are that Shell's directors breached their duty to assess, disclose and manage material risks to the company, pursuant to section 172 of the Companies Act 2006.

More particularly, the claim alleges that this breach was a result of the 11 directors’ failure to adopt and implement an energy transition strategy that aligns with the Paris Agreement. ClientEarth says Shell’s ‘Energy Transition Strategy’, which includes a plan to become a net zero emissions business by 2050, is not Paris-aligned and excludes “short to medium-term targets to cut the emissions from the products it sells – known as scope 3 emissions – despite these accounting for more than 90% of the company’s overall emissions.” [https://www.clientearth.org/latest/press-office/press/clientearth-files-climate-risk-lawsuit-against-shell-s-board-with-support-from-institutional-investors/]

This shareholder action is one of a number relating to climate change and environmental issues which are being brought by charities and activist groups against large companies. For more information, please see our previous blog here.

 

New Ministerial Department to help achieve UK’s energy security and net zero goals

The UK government has created a new Ministerial Department which "has been tasked with securing our long-term energy supply, bringing down bills and halving inflation".

The new Department for Energy Security and Net Zero has replaced the Department for Business, Energy and Industrial Strategy (BEIS) and is headed by Grant Shapps MP as the new Secretary of State for Energy Security and Net Zero.

The government says that the new department is responsible for securing the UK’s long-term energy supply, bringing down bills and halving inflation, and highlights the need for the UK to secure more energy from domestic renewable and nuclear sources.

In January 2023, the government published its net zero target review, which contains policies aimed to achieve the legally-binding goal of reducing the UK’s greenhouse gas emissions to 100% below 1990 levels by 2050, as set out in the Climate Change Act 2008.

 

March

New environmental permitting regulations to improve groundwater quality

The draft Environmental Permitting (England and Wales) (Amendment) (England) Regulations 2023 were laid in Parliament on 23 March 2023, along with the government’s response on the proposed amendments.

The new regulations will come into force on 2 October 2023, and will amend the Environmental Permitting (England and Wales) Regulations 2016 (SI 2016/1154) in nine ways. Some of the main changes include:

• increasing the range of environmental permitting (EP) options for groundwater activities to align them with other EP activities;
• expanding the range of pollutants that can be controlled to include microbial pollutants and heat pollution
• updating the exemptions to heat pollution so that the majority of closed-loop ground heat pump activities would fall outside the rules; and
• clarifying the defence available to sewerage undertakers where unauthorised discharges into sewers or sewage treatment works are attributable to third parties.

 

Green transition: European Commission proposes Directives on repair of goods and on environmental claims

On 22 March 2023, the European Commission adopted proposals for two new Directives related to the European ‘green transition’.

The first is for a Directive on common rules promoting the repair of goods and amending Regulation (EU) 2017/2394, Directives (EU) 2019/771 and (EU) 2020/1828. This is accompanied by an impact assessment and an opinion of the Regulatory Scrutiny Board. This Directive would introduce common EU rules for the promotion of the repair of faulty goods in order to try to reduce the number of goods being prematurely thrown away (which would support the objectives of the European Green Deal).

The other Directive is on substantiation and communication of explicit environmental claims (known as the Green Claims Directive). This law would mean that traders would have to carry out an assessment to substantiate any environmental claims about products or in business-to-consumer commercial practices.

The proposed Directives will need to go through the usual legislative procedure before being published in the Official Journal of the European Union and becoming binding EU law.

 

Environmental permits issued for Sizewell C nuclear power station

On 28 March 2023, the Environment Agency issued three new environmental permits for the UK’s new nuclear power station, known as Sizewell C. The permits were issued to NNB Generation Company (Sizewell C) Limited. The permits, which are mandatory before the power station can begin operations, will allow it to:

• dispose of and discharge radioactive waste (radioactive substances activity permit);
• operate standby power supply systems using diesel generators (combustion activity permit); and
• discharge returned abstracted seawater and other liquid trade effluents to the Greater Sizewell Bay area in the North Sea (water discharge activity permit).

The company applied for the permits in May 2020. A consultation process ran from July to October 2020 (in relation to the application) and again from July to September 2022 (in relation to the EA’s proposed decision and draft permits). As work on Sizewell C continues, the company must acquire a number of further environmental permits relating to site investigation, construction works and “associated developments” such as accommodation for workers.

 

Company donates £30k to charity in settlement of packaging regulations breach

Hexcel Reinforcements UK Limited has avoided prosecution by admitting a number of offences related to packaging waste regulations, and making an agreed financial contribution of £30,090.08 to the Woodland Trust. The relevant activities took place between 2005 and 2020.

Companies with a turnover over £2 million and which handled more than 50 tonnes of packaging in the previous year are subject to a requirement under the Producer Responsibility Obligations (Packaging Waste) Regulations 2007 that a set proportion of the packaging is recycled. However, Hexcel Reinforcements UK failed to take steps to recover and recycle its packaging waste as required. It also failed to register as a packaging producer.

The company offered the EA an enforcement undertaking to address its breaches of the environmental legislation, which the EA subsequently accepted.

 

Eurojust and OLAF sign new cooperation agreement

Fraud Office (OLAF) have agreed a new Working Arrangement which aims to enhance the organisations’ cooperation.

The two already have a close partnership but say that the agreement has “the aim of making the fight against fraud and other illegal activities affecting EU financial interests as efficient as possible”.

Amongst other proposals, the plan is for Eurojust and OLAF to participate in one another’s operational meetings and joint investigation teams.

 

FURTHER INFORMATION

For further information on the issues raised in this blog post, please contact a member of our Health, Safety & Environment team.

 

ABOUT THE AUTHORs

Sophie Wood is a Senior Associate in the Criminal Litigation team with extensive experience in advising corporate and individual clients involved in a wide range of internal, criminal and regulatory investigations. Sophie has acted for individuals and companies involved in investigations brought by the Environment Agency, Health and Safety Executive and local authorities, and is a member of the firm’s cross-practice Health, Safety and Environment Group.

Úna Campbell is a legal apprentice in the Real Estate and Construction team at Kingsley Napley. she was the inaugural winner of The Legal Apprentice in 2019, a competition run by Kingsley Napley in association with The Times in which 902 teams from 308 schools and colleges across the UK competed against each other through a series of heats testing pupils’ drafting, negotiation and interpersonal skills.