€700m secured by EPA to provide for environmental liabilities
2nd December 2019: The Environmental Protection Agency (EPA) today released the guidance document EPA Approach to Environmental Liabilities and Financial Provision. Financial provisions ensure that adequate funds are available to pay for remediation of environmental damage and pollution and provide for safe closure and incident management at licensed facilities. Over the last 5 years, the EPA have required licensed facilities to provide approved instruments to a combined value of €700m.
Commenting on the release of the new guidance, Dr Tom Ryan, Director of the EPA’s Office of Environmental Enforcement said,
“Facilities licensed by the EPA are required to ensure that sites are returned to a satisfactory condition following closure or an incident. The costs involved with proper site closure and aftercare, and dealing with incidents, can be significant and run to millions of euro. It is important to ensure that there is adequate financial provision in place to manage environmental risks, protect the environment and minimise the exposure of the state to the cost of remediating environmental damage and pollution.”
Financial Provisions can take the form of secured bank accounts, on-demand performance bonds, parental guarantees and environmental impairment insurance policies. The EPA has published guidance on how to determine costings and what financial instruments need to be put in place.
The EPA applies a risk-based approach to environmental liability and financial provision requirements. Therefore, only licensed facilities that pose a high risk to the environment are required to agree the assessment and costings for environmental liabilities and financial provision. This ensures that legislative requirements are met and environmental protection is kept to the fore, while maintaining a balanced and fair approach for both industry and the public.
The EPA has developed updated guidance and templates to assist facilities to comply with the requirements. Some 190 facilities are subject to the requirements, across a number of industrial sectors including:
Concluding, Dr. Ryan said,
“Progress so far has been excellent but further ongoing work is required, by both industry and the EPA, to secure and maintain the necessary provisions for agreed environmental liabilities”
The EPA Approach to Environmental Liabilities and Financial Provision is now available on the EPA Website.