Environment Agency Charge proposal: fluorinated greenhouse gases and ozone depleting substances - Introduction - Environment Agency

Introduction

The regulation of F Gas and ODS are subject to the Montreal Protocol. This is an international agreement committed to phasing out ODS and reducing use of F Gas. F Gas are powerful greenhouse gases that replace ODS. By reducing their use this helps towards achieving the government commitment towards Net Zero.

Currently, F Gas and ODS are subject to the Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2019 (F Gas and ODS Regulations). These regulations control the production, import, export and use of F Gas and ODS. They effectively transpose the EU Regulations so that the requirements continue to satisfy the Montreal Protocol.

The work we do for F Gas and ODS service includes:

managing and checking customer registrations on the F Gas and ODS services
assessing applications for ODS import and or export licences and laboratory and analytical use of ODS (LabODS) declarations
calculating and allocating quotas and managing quota transactions
reviewing annual reports and carrying out compliance checks
providing a helpdesk
compiling and submitting reports to the United Nations as required by the Montreal Protocol

If you plan to use ODS for laboratory or analytical uses, you must register on the LabODS service and submit a declaration.

What we aim to achieve

We have considered our charges against the need to fulfil our regulatory duties. We know our charges can affect those we regulate so we have considered our proposals carefully. We are always interested to hear how you think we can regulate more fairly, while safeguarding the environment more effectively.  

Our aim is to achieve a consistent and transparent approach in how we charge for regulating F Gas and ODS. 

The principles we follow The principles we follow

The proposals we have outlined in this consultation make sure that:

people only pay for the regulatory service they receive
we will recover our costs of regulation
we will not need to use additional taxpayer funds to support our regulatory work

In this consultation our considerations include the need to make sure:

our costs are reflected in our charges and align with HM Treasury rules in the guidance managing public money
we have regard to the desirability of promoting economic growth (under section 108 of the Deregulation Act 2015) when we carry out our regulatory activities
our regulatory activities are transparent, accountable, proportionate, consistent, and targeted only at cases where action is needed (in line with the Legislative and Regulatory Reform Act 2006)
we follow the Regulators’ Code (as required under section 22 of the Legislative and Regulatory Reform Act 2006)

Our powers to charge Our powers to charge

Charging powers under section 41 and section 42 of the Environment Act 1995 enable us to introduce new charges for F Gas and ODS as set out in the F Gas and ODS Regulations.

Inflationary increase to charge Inflationary increase to charge

We propose to update our charges annually in line with inflation so that we maintain full cost recovery. All charges and fees for F Gas and ODS will be updated annually on 1 April. We will calculate updated charges based on the Office for National Statistics (ONS) measure of Consumer Price Index (CPI) inflation, using the figure they publish on 30 September in the immediately preceding year. The inflationary increase to these charges will be equal to or less than this measure. Increases will be less if we believe our increased costs do not equate to the CPI measure.

We have chosen the CPI measure as this is widely recognised, understood, and accepted as a measure of cost inflation. It is used by: 

economic regulators to set regulated charges 
government to set taxes and benefits 
employers in wage bargaining 
private sector companies to set payment amounts in business contracts

We therefore believe it is the most appropriate measure of the increases in our own costs. If we believe our charges need to increase by more than the CPI, we will commence another review, seek HM Treasury approval, and carry out a public consultation. 