QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
sitting as a Judge of the High Court
| THE QUEEN ON THE APPLICATION OF PROTREAT LIMITED
|- and -
|THE ENVIRONMENT AGENCY
|- and -
|THE SECRETARY OF STATE FOR ENVIRONMENT FOOD AND RURAL AFFAIRS
Mr James Maurici QC and Mr Richard Moules (instructed by the Legal Services Department of the Defendant) for the Defendant
The Interested Party was not represented and did not appear
Hearing dates: 28 February, 1 and 2 March 2018
Crown Copyright ©
Sir Wyn Williams:
"2. Central to the claim is the extent to which the Environment Agency is obliged, in the circumstances, to provide guidance which is binding between itself and industry as to when waste lubricating oil has or has not achieved "end-of-waste" status. Whether or not any waste-derived product has achieved end-of-waste status is fraught with legal complexity. Should the producer be deemed not to have achieved end-of-waste status in the manufacture of a product, then there are significant regulatory and financial burdens and there is the risk of criminal prosecution. Both manufacturers and the buyers of their product need to know in advance that they are trading in products which will be considered by the regulator as non-waste (end-of-waste) items."
The Legal Framework
"A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods."
"This Directive lays down measures to protect the environment and human health by preventing or reducing the adverse impacts of the generation and management of waste and by reducing overall impacts of resource use and improving the efficiency of such use".
Article 3 contains important definitions of words and phrases used in the Directive. "Waste" means:
"any substance or object which the holder discards or intends or is required to discard".
"any operation the principal result of which is waste serving a useful purpose by replacing other materials which would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy".
"Any recovery operation by which waste materials are reprocessed into products, materials or substances whether for the original or other purposes. It includes the reprocessing of organic material but does not include energy recovery and the reprocessing into materials that are to be used as fuels or for backfilling operations".
"Regeneration of waste oils" means:-
"any recycling operation whereby base oils can be produced by refining waste oils, in particular by removing the contaminants, the oxidation products and the additives contained in such oils".
"The following waste hierarchy shall apply as a priority order in waste prevention and management legislation and policy:
(b) preparing for re-use;
(d) other recovery, e.g. energy recovery; and
Paragraph 2 of Article 4 provides:
"When applying the waste hierarchy referred to in paragraph 1, Member States shall take measures to encourage the options that deliver the best overall environmental outcome. This may require specific waste streams departing from the hierarchy where this is justified by life-cycle thinking on the overall impacts of the generation and management of such waste".
"Certain specified waste shall cease to be waste within the meaning of point (1) of Article 3 when it has undergone a recovery, including recycling, operation and complies with specific criteria to be developed in accordance with the following conditions:
(a) the substance or object is commonly used for specific purposes;
(b) a market or demand exists for such a substance or object;
(c) the substance or object fulfils the technical requirements for the specific purposes and meets the existing legislation and standards applicable to products; and
(d) the use of the substance or object will not lead to overall adverse environmental or human health impacts.
The criteria shall include limit values for pollutants where necessary and shall take into account any possible adverse environmental effects of the substance or object".
Paragraph 4 recognises that criteria within paragraph 1 may not be developed at "Community level". It provides:
"Where criteria have not been set at Community level under the procedure set out in paragraphs 1 and 2, Member States may decide case by case whether certain waste has ceased to be waste taking into account the applicable case law."
"Member States shall take the necessary measures to ensure that waste management is carried out without endangering human health, without harming the environment and, in particular:
(a) without risk to water, air, soil, plants or animals;
(b) without causing a nuisance through noise or odours; and
(c) without adversely affecting the countryside or places of special interest".
"1. Without prejudice to the obligations related to the management of hazardous waste laid down in Articles 18 and 19, Member States shall take the necessary measures to ensure that:
(a) waste oils are collected separately, where this is technically feasible;
(b) waste oils are treated in accordance with Articles 4 and 13;
(c) where this is technically feasible and economically viable, waste oils of different characteristics are not mixed and waste oils are not mixed with other kinds of waste or substances, if such mixing impedes their treatment.
"3.4 Who has to observe the hierarchy principles?
The addressees of the waste hierarchy are the Member States, which have to respect the waste hierarchy in their waste management policy and legislation.
Also directly concerned are regulators and authorities at regional and local level. The CJEU has repeatedly held that 'The obligation of a Member State to take all the measures necessary to achieve the result prescribed by a directive, whether general or particular, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts.' This means that the waste hierarchy is to be observed and applied by all the relevant administrative levels within a given Member State that are concerned with waste policies and legislation.
In a number of provisions of [the Waste Directive] (e.g. Articles 8, 10, 15, 21, 22, 28), reference is made to the waste hierarchy emphasising its function as an overall principle, often together with other key principles of the [Waste Directive], namely the provisions on protecting human health and the environment set out in Article 13. When implementing these provisions, Member States' authorities should therefore also consider how to bring the waste hierarchy into effective application in this context.
In particular, Articles 28(1) and 29(1) [of the Waste Directive] emphasise that waste management plans and waste prevention programmes must be established in accordance with the waste hierarchy."
I hope, however, that in the light of this judgment, it may be possible for DEFRA and the Agency to join forces in providing practical guidance for those affected. It is unfortunate that the difficulties of interpreting the pronouncements from Luxembourg are compounded by the failure of the national authorities to agree a common approach. It is important that the national authorities should use their expertise and experience to assist those concerned with treatment and handling of waste, and also the courts (civil or criminal) who may well be faced with deciding individual cases without the benefit of any comparable expertise. The Court of Justice recognises the scope for the national authorities to fill in some of the gaps left by the Directive. For example, in Niselli's  ECR 1-10853, while noting the lack of any "decisive criterion" for determining the holder's intention, it added at para 34:
"In the absence of Community provisions, Member States are free to choose the modes of proof of the various matters defined in the directives which they transpose, provided that the effectiveness of Community law is not thereby undermined…""
"We confirm our willingness to continue the dialogue and in particular to addressing the more urgent issues of EoW and oil collections.
There are a number of members who are taking a serious look at investment here in the UK in modern oil recovery in operations that will critically depend on feed stop avail. They will need to be satisfied of the field on which play occurs is a level one."
The notes of the meeting contained a section entitled "Summary of EoW issues/ways forward". This Summary was in the following terms:
"i. Setting EoW criteria is crucial for oil recovery investment decisions.
ii. A recovery process requires an EoW assessment for all of its output streams for that directly impacts on economic values.
iii. Allowing recoverers to voluntarily choose whether or not to seek EoW status is akin to asking a Fox to write a Chicken's Guide to Survival.
iv. The EU free market approach is compromised by a lack of EoW congruency and UK firms are suffering through different standards being applied or no intervention at all.
v. ReGroup have asked the Commission to launch an investigation into the EoW practices of the European waste oil industry and welcomes DEFRA support on that.
vi. Until greater EoW clarity is achieved, ReGroup is unlikely to invest in a UK re-refining activity but may look to other Member States where standards are openly easier.
vii. Ora wish to see a much greater co-ordination between REACH/IED Regulators' on EoW issues."
"If you comply with the requirements below, we will not require waste consignment notes, a waste operation permit or permit conditions, for the transfer, storage and/or use for those outputs from a permitted re-refining activity producing waste derived mineral lubricating oil streams intended for non-fuel applications.
This regulatory position will be reviewed before 2 November 2015 and withdrawn on 31 "October 2016."
"Extension of RPS 185. It is recognised that there have been delays in both information being provided to the Environment Agency and in the Environment Agency responding. Therefore we are happy to extend RPS 185 for a period of 12 months. The new expiry date will be the 31 October 2017. However, we cannot agree to indefinitely extend it nor extend it until such time as an end-of-waste status is agreed. This is for two reasons.
1. An RPS is not a solution to a regulatory problem in its own right, rather a stepping stone whilst a permanent solution is found.
2. End-of-waste status is by no means a certainty, we have yet to see evidence that the legal end-of-waste test has been met. The RPS should be viewed as covering the period up until the evidence is gathered and a view about end-of-waste status reached. A further 12 months should easily cover the length of time taken to get together the required information.
Next steps. The Environment Agency's definition of waste panel is closed. We are continuing to review the service in the context of our wider approach to waste and regulation and there is now no formal national mechanism in place to offer a view on whether end-of-waste status has been achieved. We currently regard these materials as waste.
With respect to end uses that fall outside the PFO QP you can come to your own view about whether end-of-waste status has been achieved
If the ORA wish to take the existing distillate spec with new test methods or take the revised distillate oil spec forward the comments above will need to be fully addressed. Future work by the EA on the existing QPs is now also under review".
"Timing and next steps.
In July 2007 after the Court of Appeal's judgment in OSS, the Environment Agency adopted OSS proposed PFO specification from their judicial review claim as the 'interim PFO specification' claiming that an end-of-waste protocol would be in place within one year. It actually took the Agency 4 years to launch the PFO protocol before the interim specification was withdrawn. It was actually 5 years before the test methods were also finalised. This was for just one fuel product.
The Agency's 10 month timeframe (not 12 months as suggested in your letter) to complete the position for the numerous EoW products detailed in our May 2016 submission is totally unrealistic and inconsistent with the Agency's own prior conduct.
The Agency's decision to abandon the definition of waste panel with a whimsical approach to reviewing what comes next is an abrogation of the Agency's public law and statutory responsibilities.
Accordingly, you will appreciate that we cannot accept the position that leaves us with 'no place to go'. We will consult further with members but must stress the frustration created by the Agency's approach seems disappointingly to be leading to a breakdown in conventional relations. May we urge you to please urgently reconsider and find a way to get the dialogue back on track?"
"(1) The Environment Agency's delay in engaging with the ORA and its technical member Protreat, in relation to the ORA's proposed end-of-waste framework(s) for re-refined waste mineral lubricating oil outputs;
(2) The Environment Agency's decision to close its definition of waste panel three months after the ORA's proposed end-of-waste framework(s) for re-refined waste mineral lubricating oil outputs were submitted to the Environment Agency, seven months after the Environment Agency had reviewed the ORA's interim proposal, and with no plans to change that position prior to the expiration of the moratorium that the Environment Agency itself had imposed;
(3) The Environment Agency's failure to confirm the extension of the RPS 185 the moratorium until the proposed waste frameworks have been accepted and adopted as a new Quality Protocol for re-refined waste mineral lubricating oil outputs, and its announcement that it will be extended only for a limited period of 12 months;
(4) The Environment Agency's decision to close its definition of waste panel to remove its former national mechanism to offer a view on whether end-of-waste status has been achieved, a matter which will affect both the consideration of ORA's proposal and also prevent undertakings from obtaining clearance as to individual processes;
(5) Despite the Court of Appeal's judgment in OSS Group Limited v The Environment Agency  EWCA Civ 611, the Environment Agency's current decision to regard re-refined waste mineral lubricating oil outputs as waste".
As was to be expected in a pre-action protocol letter, significant detail was provided on behalf of the Claimant as to the basis upon which it proposed to make its challenges.
The Grounds of Challenge
"(i) It involved generally treating recyclers by re-refining of waste oil for non-fuel use less favourably than re-processors who merely enable recovery of energy from waste oil.
(ii) It involved giving less favourable treatment to other potential re-refiners than the existing waste oil re-refiners such as Whelan whose products, the specification of which was known or could have been known to the EA, were not treated by the EA as waste subject to the [Waste Framework Directive]".
Reference to ECJ
Conclusions and directions