Owen Jones, Senior Consultant, JRP Solutions
A lot of new detail has been added to The Medium Combustion Plant Directive since it was introduced in 2015 and the post-Brexit move from EUETS to UKETS has also brought some changes. It is essential that owners/operators of standby generators understand what these changes mean to them. They must also keep under review Environmental Permit Regulations as, if thermal input capacity has increased, the operators’ obligations may change.
The Medium Combustion Plan Directive
The provisions of the Medium Combustion Plant Directive (MCPD) are enacted in the UK under Environmental Permitting (England and Wales) (Amendment) Regulations 2018 and similar regulations for Scotland and Northern Ireland.
When the change to MCPD comes into force in 2024 for existing units, Emission Limit Values (ELVs) will be imposed on emissions of nitrogen oxides (NOx), sulphur dioxide (SO₂) and particulates on a range of plant including standby diesel generators. Units installed after the 20th December 2018 need to comply from the date they start operating.
A standby generator is defined as one that is operated for the sole purpose of providing power at a site during an onsite emergency and must not operate for testing and maintenance purposes for more than 50 hours in each year.
The provisions of the MCPD are enacted through different regulations covering plant with a thermal input of between
a) 1 MWth and 20MWth, b) 5MWth to 50MWth and c) “Specified Generators” which can include standby generators if used for load balancing.
The permitted ELV at the compliance date for diesel back-up generators is 190 mg/Nm3 oxides of nitrogen (NO and NO2) normalised to 15% oxygen in exhaust gases. This level of emissions can be achieved by new diesel generators now available.Currently unless the standby generator was installed after the 20th of December 2018, and so has to comply with the MCPD, or the total thermal input for the site is greater than 50 MW, there are no specific stack emission limits put on standby generators. When the MCPD comes into force in 2024 for existing units, limits on stack emissions for older generators will be imposed, however as long as the generators run for less than 50 hours testing then the required limits are less stringent.
From EU ETS to UK ETS
The EU ETS (European Union Emissions Trading Scheme) is the largest multi-country, multi-sector greenhouse gas emissions trading system in the world, covering more than 11,000 power stations and industrial plants across the EU. Other organisations, including universities and hospitals, may also be covered by the EU ETS depending on the combustion capacity of equipment at their sites. Aviation operators flying into or from a European airport are also covered by the EU ETS.
The UK ETS, introduced on 1st January 2021, almost exactly mirrors the EU ETS scheme in its requirements and regulations, however as the UK ETS is very recent, further guidance on certain aspects is still outstanding.
The EU ETS/UK ETS are cap and trade schemes where full participants are given a free allowance of carbon credits and further allowances are released via auctions. Participants need to report annually on the greenhouse gas emissions from the qualifying combustion plant they operate and submit allowances to cover these emissions. If they do not have enough from their free allowance allocation they must purchase more from the market or auctions. If they have a surplus they can sell these into the market.
The EU ETS/UK ETS is a mandatory scheme for operators with combustion plant (which may include standby generators) exceeding 20MW thermal input on an individual site.
For a site to qualify for EU ETS/UK ETS, it will need to have an aggregated thermal input to combustion equipment greater than 20MW. When aggregating,
only individual units, including standby generators over 3MW thermal input are included. However, 2021 saw the start of phase IV of the EUETS and as part of this new phase a new category of facility was created called an Ultra Small Emitter.
The Ultra Small Emitter Opt Out Scheme (USE) is for UK ETS sites where CO₂ emissions do not exceed 2,500 tonnes per year. A site generally has to opt into this arrangement if it qualifies at the beginning of the phase or if it qualifies as a new entrant. Once in the USE scheme the participant is still required to monitor annual CO₂ emissions and maintain records but does not receive a target or any free allocation of allowances. The participant also does not have to submit any data to the Environment Agency (EA) or submit any allowances or pay a civil penalty for exceeding a target.
If the emissions threshold of 2,500 tCO₂e is exceeded in a calendar year for a facility, the EA must be informed and the site may be required to go into either the Small Emitters Opt Out Scheme for sites with less than 35MW thermal capacity, and that emit less than 25,000 tCO₂e per annum, or the main scheme where allowances will need to be surrendered each year.
The Small Emitters and Hospital Opt Out Scheme is for all hospitals and sites with less than 35MW thermal capacity and that emit less than 25,000 tCO₂e per annum.
In the Small Emitter and Hospital Opt Out Scheme participants are required to have a permit and report on emissions annually to the Environment Agency (EA). However they do not have to surrender allowances or use an external verifier to verify the emissions. Instead they are given a target based on historical emissions and charged a Civil Penalty for every tonne of CO₂e they emit over the target. The current civil penalty charge is £21.93/tCO₂e for 2020.
There are both benefits and drawbacks of the Main Scheme ETS Compliance compared to the Ultra Small Emitter and Small Emitter schemes depending on an organisation’s individual circumstances. A suitably qualified consultant will be able to advise on the best for your organisation.
What’s changed post Brexit: On the 31st December 2020 the UK ceased to be part of the EU ETS due to Brexit and compliance was switched to the new UK ETS scheme.
Sites under the EU ETS in 2020 must still report emissions to the EA for 2020 by 31st March 2021 and surrender sufficient allowances to cover the emissions.
Currently it is not possible to trade allowances between the EU ETS scheme covering countries in the European Union and the participants in the UK ETS. However this may change if agreement can be reached with the EU.
As part of the UK ETS roll out the UK Government has decided to be more ambitious than the EU on encouraging emission reductions. To this end, the amount of free allowances issued and small emitter and hospital opt out targets have been reduced by 5% compared to those that would have been in place under the EU ETS.
Environmental Permit Regulations
The Environmental Permitting Regulations (EPR) in England and Wales are derived from the EU’s
Industrial Emissions Directive (IED). A permit is required for all sites where the aggregated thermal input capacity of all the combustion equipment on site is 50MW or greater (Part A) or if a single combustion unit is 20MW or greater (Part B). Multiple generators on a single site must be aggregated to see if the qualifying capacity threshold of 50MW is breached and this should be regularly reviewed to ensure it is not exceeded.
When calculating the rated thermal input a number of criteria need to be taken into consideration:
- All combustion plant on the site needs to be included irrespective of size or type.
- The rated thermal input is not the capacity the plant operates at but the maximum at which it can potentially operate.
- Physical restraints on thermal input, such as circuit breaker ratings, can be used to reduce the rated thermal input below the aggregate equipment rating but restraints on firing must be permanent, not easily reversed and be certified by the installer.
- Software interlocks that reduce the rate fuel can be burnt can also be used to reduce the total rated thermal input but software interlocks must be protected to restrict access, be able to generate audit logs identifying any changes made and be certified by the installer.
- For standby generator sets the maximum thermal input rating must be calculated as 110% of the continuous rating.
Regulations concerning the sulphur content of liquid fuels
In 2008 the use of liquid fuels with a sulphur content greater than 0.1% (or 1000 ppm) by mass was banned in Europe. However a dispensation was granted by the EA in the UK to operators with stocks of high sulphur fuel to use up existing stocks and at the time no limitation was set on how long this should take.
Some operators of standby generators with particular autonomy requirements may still have significant stocks of high sulphur diesel. The EA have indicated that there is no change to the guidance, however SEPA, who now regulate in Scotland, have indicated that the dispensation will be removed in the next 6 to 12 months.
Operators should regularly monitor the quantity and age of stocks to ensure compliance with any future time limits imposed and it is likely that use of stocks of high sulphur diesel will become problematic due to increased focus on local air quality and any emissions limits imposed by the MCPD, which may require the use of ultra-low sulphur (10 ppm) diesel.
Operators with stocks of diesel that are not ultra-low sulphur should start to plan now on how to mitigate future issues by either using up or replacing high sulphur diesel stocks. High sulphur diesel stocks cannot be sold unless it is for reprocessing but can be moved between sites in the same organisation to be used up.