Business names 3 conditions for the success of industrial pollution reform No. 6004-d

01/ 02/ 2023

On January 25, the Verkhovna Rada Committee on Environmental Policy and Nature Management considered 4 draft laws on industrial pollution at its meeting. These are draft laws No. 6004, No. 6004-1, No. 6004-2 and No. 6004-d. As a result of the discussion, the members of the Committee recommended adopting draft law No. 6004-d as a basis. The EBA supports this decision and believes that the proposed version of draft law No. 6004-d is the most balanced in terms of considering the interests of business, the state and the public. At the same time, the draft law has 3 fundamental points that may complicate the process of eco-modernization of the domestic industry under European standards. 1) Transition to a new permitting system that will replace the usual three permits for air pollutant emissions, special water use (as well as discharges to centralized sewage systems) and waste management. Starting in 2028, business activities in certain areas, such as energy, metallurgy, chemicals, and waste management, will be possible only if a new permit is available. The process of collecting documents is quite complicated and lengthy and requires the submission of complex data related to the companys activities. Before the permit is issued, the information provided in the permit application is verified. If discrepancies are found in this data, the permit will be denied and the process will start again. The proposed transitional period does not consider the current military realities, which result in the destruction of industrial facilities and power outages. Thus, the information provided by the company may become irrelevant in a very short period of time and under circumstances beyond the companys control. Therefore, it is advisable to postpone the transition to new permits to the post-war period and ensure that they can be obtained within four years after the end of martial law. 2) Retention of effective technological standards when issuing new integrated permits. Until the introduction of mandatory eco-modernization for industry based on European best available technologies and management practices (BAT), draft law No. 6004-d provides for an opportunity to obtain an integrated permit that will essentially be based on current emission standards for those facilities that are economically impractical or impossible to modernize and have a limited lifespan. Among them are energy facilities whose operating conditions are regulated by the National Emission Reduction Plan for Large Combustion Plants (NERP). And this is a completely logical decision. For other industries, such as metallurgy or glass, the current emission standards may change as early as 2024. This will actually lead to the need for capital investment, although in some cases these facilities will still have to be closed, as there is no BAT for them. Therefore, we propose to allow businesses to obtain new integrated permits based on the current technological emission standards provided for in the current permits. 3) Revision of the installation requirements for automated emission monitoring systems (AEMS). A positive aspect of draft law No. 6004-d is that it defines the requirements for stationary emission sources based on BAT, which is fully in line with the European approach. However, this process is a rather capital-intensive and lengthy construction/reconstruction project. Therefore, it is economically inexpedient to establish a legal requirement for the installation of AMS at facilities/installations that are to be decommissioned in the short term after the reform. In this regard, we propose to exclude from the obligation to install AMS facilities that are planned to be completely decommissioned within a short period of time (2-3 years) after the law comes into force. Stanislav Zinchenko. EBA Industrial Ecology and Sustainable Development Committee. The introduction of BAT is a major challenge for Ukrainian industry and energy. And we will be able to cope with it only with significant financial support from our European colleagues. However, these ambitious plans in terms of modernization technologies can be realized no earlier than 10 years after the end of hostilities. The business community welcomes the efforts of the government to meet the needs of businesses in eco-modernization and hopes that the proposed conditions will be the key to implementing this important reform.

As a result of the discussion, the members of the Committee recommended adopting draft law No. 6004-d as a basis.

The EBA supports this decision and believes that the proposed version of draft law No. 6004-d is the most balanced in terms of considering the interests of business, the state and the public.

At the same time, the draft law has 3 fundamental points that may complicate the process of eco-modernization of the domestic industry under European standards.

1) Transition to a new permitting system that will replace the usual three permits for air pollutant emissions, special water use (as well as discharges to centralized sewage systems) and waste management. Starting in 2028, business activities in certain areas, such as energy, metallurgy, chemicals, and waste management, will be possible only if a new permit is available. The process of collecting documents is quite complicated and lengthy and requires the submission of complex data related to the company’s activities. Before the permit is issued, the information provided in the permit application is verified. If discrepancies are found in this data, the permit will be denied and the process will start again. The proposed transitional period does not consider the current military realities, which result in the destruction of industrial facilities and power outages. Thus, the information provided by the company may become irrelevant in a very short period of time and under circumstances beyond the company’s control. Therefore, it is advisable to postpone the transition to new permits to the post-war period and ensure that they can be obtained within four years after the end of martial law.

2) Retention of effective technological standards when issuing new integrated permits. Until the introduction of mandatory eco-modernization for industry based on European best available technologies and management practices (BAT), draft law No. 6004-d provides for an opportunity to obtain an integrated permit that will essentially be based on current emission standards for those facilities that are economically impractical or impossible to modernize and have a limited lifespan. Among them are energy facilities whose operating conditions are regulated by the National Emission Reduction Plan for Large Combustion Plants (NERP). And this is a completely logical decision. For other industries, such as metallurgy or glass, the current emission standards may change as early as 2024. This will actually lead to the need for capital investment, although in some cases these facilities will still have to be closed, as there is no BAT for them. Therefore, we propose to allow businesses to obtain new integrated permits based on the current technological emission standards provided for in the current permits.

3) Revision of the installation requirements for automated emission monitoring systems (AEMS). A positive aspect of draft law No. 6004-d is that it defines the requirements for stationary emission sources based on BAT, which is fully in line with the European approach. However, this process is a rather capital-intensive and lengthy construction/reconstruction project. Therefore, it is economically inexpedient to establish a legal requirement for the installation of AMS at facilities/installations that are to be decommissioned in the short term after the reform. In this regard, we propose to exclude from the obligation to install AMS facilities that are planned to be completely decommissioned within a short period of time (2-3 years) after the law comes into force.

Stanislav Zinchenko EBA Industrial Ecology and Sustainable Development Committee

The introduction of BAT is a major challenge for Ukrainian industry and energy. And we will be able to cope with it only with significant financial support from our European colleagues. However, these ambitious plans in terms of modernization technologies can be realized no earlier than 10 years after the end of hostilities.

The business community welcomes the efforts of the government to meet the needs of businesses in eco-modernization and hopes that the proposed conditions will be the key to implementing this important reform.