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What does the Levelling-up and Regeneration Act 2023 mean for nutrient neutrality?

Part 7 of the Levelling-up and Regeneration Act 2023 (LURA or the Act) comes into force on 26 December 2023 and introduces amendments to the Water Industry Act 1991 to impose obligations on sewerage undertakers in England to upgrade their infrastructure. Specifically, sewerage undertakers are obliged to upgrade nitrogen and/or phosphorus significant plant, being plant that discharges treated effluent into a nitrogen and/or phosphorus sensitive catchment area, in order to meet the relevant standard by the specified upgrade date. 

In exercising the duty to upgrade infrastructure, sewerage undertakers are obliged to consider nature-based solutions, technologies and facilities relating to sewerage and water. The Act does not provide examples of such solutions, but these may include actions such as removing land from agricultural use or creating wetland.

We have not seen figures indicating the number of plants currently falling short of the nutrient pollution standard and, as such, it is difficult to estimate the extent of the upgrade works that are required by the LURA. However, the House of Commons Environmental Audit Committee report “Water quality in rivers” published on 13 January 2022 (Report) stated both that the quality of waters in England is the worst in Europe and that the impact of wastewater from sewage treatment works and sewer overflows is one of the most common contributors to this poor water quality. The Report also points to under-investment in sewerage infrastructure, which suggests the impact and extent of these provisions could be significant. 

Sensitive catchment areas (SCA)

Where a habitats site is in an unfavourable condition as a result of pollution from nutrients in water comprising excess nitrogen and/or phosphorus (or compounds of these nutrients), then the Secretary of State may designate the area as a nitrogen or phosphorus “sensitive catchment area” (SCA). In making this determination, the Secretary of State may take into account guidance published by Natural England, the Environment Agency (EA) or the Joint Nature Conservation Committee. 

If the Secretary of State chooses to designate an area as a SCA, then it must publish the designation as soon as practicable and specify a “designation date” (if not, the date of designation). The designation may specify permitted levels of nutrient discharge of plant within the catchment area and this level may deviate from the nutrient pollution standard (see below). 

The Secretary of State is obliged to publish and maintain a map showing all nitrogen and phosphorus SCAs and all nitrogen and phosphorus significant plant.

Catchment permitting areas

The Secretary of State may designate a SCA as a “catchment permitting area” and may take into account advice from the EA and/or Natural England in making this designation. When this designation has been made the EA must:

(a) review the environmental permits for significant plant discharging treated effluent into the SCA that are significant plants or any other plants the EA considers appropriate; and

(b) impose conditions on those permits relating to nutrients. 

The purpose of this designation is to trigger a review of existing permits for plant discharging treated effluent within the SCA.

Further regulations are expected to come forward setting out how the EA should determine the overall effect on a habitats site of nutrients in treated effluent. 

Nutrient pollution standard

Section 96F specifies the nitrogen / phosphorus nutrient pollution standard that nitrogen and phosphorus significant plant should achieve (unless otherwise specified by the Secretary of State or set out in regulations):

  • The concentration of total nitrogen in treated effluent must not exceed
    10 mg / l
  • The concentration of total phosphorus in treated effluent must not exceed
    0.25 mg / l

Treated effluent means any effluent discharged by plant but excludes storm overflow and emergency discharge (for example, as a result of electrical power failure or mechanical breakdown). 

Exemptions

Plant is exempt from compliance with the nutrient pollution standard if certain capacity thresholds are not met and/or by virtue of designation from the Secretary of State. Plant within a SCA is exempt if it has a capacity of less than a population equivalent of 2000 when the designation of the SCA takes effect. This exemption presumably applies because a population under this threshold is unlikely to have a material impact (but also may relate to the cost effectiveness of upgrading plant for a comparatively small gain). The Secretary of State may choose to designate plant that would be exempt (for example by reasons of capacity), unless both the plant has a capacity of less than a population of 250 and the designation (as non-exempt) takes place after the designation of the associated SCA takes effect. 

Upgrade date

Plant in SCAs must be upgraded by the “upgrade date” (unless exempt). The “upgrade date” in relation to nutrient significant plant is 1 April 2030 (if the designation of the SCA takes effect during the 3 month period after which the LURA is passed – i.e. by 26 January 2024) or the date specified by the Secretary of State (if the designation of the SCA takes place after 26 January 2024). After the initial period, an upgrade date must be at least 7 years after the date the designation takes effect. (The legislation refers to the “applicable date” rather than the “upgrade date” for plant in catchment permitting areas.)

Development – the assumptions

Schedule 15 of the LURA amends the Conservation of Habitats and Species Regulations 2017 (Habitats Regulations). In summary, the LURA inserts provisions such that if a planning application has been made to a local authority, when making a “relevant assessment” (this includes an environmental impact assessment), the local authority must assume that nitrogen and/or phosphorus significant plant meets the relevant nutrient pollution standard from the upgrade date (or applicable date).

The assumptions above may be revoked by the Secretary of State following consultation. 

Failure to upgrade

The LURA secures amendments to the Environmental Damage (Prevention and Remediation) (England) Regulations 2015 to ensure that the EA has the power to take enforcement action against sewerage undertakers which have failed to meet the relevant nutrient pollution standard by the upgrade date (or applicable date).

The EA has the same powers for breach of the upgrade requirements as it does for other environmental breaches. Such a breach could constitute a criminal offence and in the event of a company being found guilty, a director or manager could also be found guilty of an offence (and as such potentially face imprisonment and/or a fine). 

What is the impact of these changes?

Developers and landowners

Those hoping that the LURA would immediately ease some of the delays arising out of the issues concerning nutrient neutrality will be disappointed (albeit not surprised). In the short term, the LURA will have little impact on developers or landowners whose sites are located in areas affected by nutrient neutrality issues. 

Longer term, the changes are positive, both in respect of:

  1. incentivising sewerage undertakers to upgrade infrastructure (which should unlock development on sites currently impacted by nutrient neutrality); and
  2. limiting non-determination by local planning authorities (LPAs) for reasons of nutrient neutrality: by compelling LPAs to assume that sewerage undertakers have complied with their duties to upgrade infrastructure when making determinations about planning applications. 

Environmentalists

Although environmentalists will welcome the obligations on sewerage undertakers to improve their network (and therefore reduce nutrient discharge), many will argue that the LURA does not go far enough in terms of protecting the environment. 

For example, the nutrient pollution standard does not apply to discharge arising from storm overflow which occur when the capacity of the sewerage system is exceeded, and allows discharge of excess contents into inland waters, underground strata or the sea. Critics would argue that the express acceptance of nutrient discharge into our water system to an extent undermines the ecological benefit of the provisions. 

Further, if sewerage undertakers do not upgrade the relevant plant in line with their duties, there is a risk that the excess of nutrients in habitat sites will be exacerbated (as local authorities may no longer be prevented from granting planning permission as a result of excess nutrients). 

The LURA also fails to tackle the contribution of nutrient loading via agriculture.

Decision makers

LPAs may experience a degree of frustration with the LURA’s position on nutrient neutrality. On one hand, unlocking development in areas with nutrient issues is a positive step. On the other hand, LPAs will lose a degree of control from 2030 in so far as they are restricted by statute from refusing / declining to determine applications on the basis of concerns relating to nutrient neutrality (while also having no power to compel sewerage undertakers to comply with their duties). 

Sewerage undertakers

The LURA imposes additional duties on sewerage undertakers in terms of the expectations on these bodies to improve their infrastructure in areas of habitat sensitivity. At a time when sewerage undertakers are under increasing scrutiny, particularly in relation to storm overflows, such upgrade works (however necessary) are likely to be costly. Costs will ultimately be passed to consumers – at a time where the cost of living is a real issue for many. 

We will have to wait and see firstly how compliant sewerage undertakers will be with these legislative changes but also how stringently the regulator will seek to enforce any breach, both in terms of failing to meet the prescribed timetable and prescribed nutrient pollution standard. The potential criminal liability for failing to comply with the upgrade requirements will likely incentivise sewerage undertakers to take action. 

In a month when water companies stand accused of downgrading the seriousness of pollution incidents and the EA has been accused of accepting these downgrades without sufficient investigation [1], there is considerable pressure on the regulator to hold sewerage undertakers to account (see here for further details on previous examples of regulators failing to discharge their duties). 


 
[1] Raw sewage 'cover-up' at Windermere World Heritage Site - BBC News 

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