The law implementation could lead to a greener steel industry

The global and EU context of decarbonization of steel industry

Steel production holds a significant share of global CO2 emissions. Different estimations show that the steel production worldwide is responsible for 11% of all CO2 emissions (Carbon Brief) worldwide, although other sources pin it closer to 7.2% (Our World in Data). According to the JRC, the steel industry is responsible for around 5% of CO2 emissions in the EU. While various initiatives and pilot projects aim to commercialise greener steel production pathways (e.g. Green Steel projects such as Hybrit or H2GreenSteel), steel production is still associated with large amounts of pollutant emissions and is regarded as part of the “hard to abate”.
Within the EU context, the sector needs to develop and commercialese new low-CO2 technologies within the next 5-10 years to be in line with the EU’s climate targets and climate neutrality by 2050 as required by the EU Climate Law. According to Somers J. in Technologies to decarbonise the EU steel industry, while net-zero targets or pledges are clearly an important marker of a company’s ambition, they are in and of themselves non-binding and unenforceable. The European Climate Law (which sets a legally binding target of net-zero greenhouse gas emissions by 2050) indicates that it must rather be a question of how, not if, EU steelmakers will follow up on their targets. It is therefore not surprising that all major steelmakers in the EU, even multinational companies such as Tata Steel and ArcelorMittal, have now announced plans to introduce low-CO2 steelmaking projects at several EU sites. In fact, two thirds of global decarbonisation projects are based in the EU, as identified by the Green Steel Tracker dataset.

The legal context of the decarbonization of steel industry

There are a number of technical, factual and legal aspects that must be taken into consideration before starting actual litigation or other relevant legal actions to achieve better environmental performance and decarbonization of the steel industry. In order to do this, we need to check both the EU and national legal systems, as well as the respective permits under the Industrial Emissions Directive (IED) and/or other authorizations of the selected installations, in order to be able to design a legal strategy. This requires scoping of the most relevant legal actions and should focus on what impacts litigation may have. Actions may vary from country to country but could include monitoring of implementation of the IED permit conditions, access to information requests, complaints to administrative and other authorities (e.g., Ombudsman’s office) and subsequent litigation, if there are grounds for it.

Litigation, i.e., the application of transparent and adversarial judicial procedures to force country government and/or corporate polluters to step up their climate pledges is not a new phenomenon; however, they usually take the form of climate cases, covering either the entire spectrum of CO2 (and methane) emissions or specific industrial sectors, mostly the fossil fuel industry. The steel industry has not been a target of massive litigation so far, however there could be potential to use strategic litigation tactics against specific companies based on the information we plan to collect.

Importantly, the legal actions shouldn’t aim at the closure of an installation (unless necessary for a short period), but rather at the improvement of industrial processes and the embracing of a new concept of green steel by industry. It also depends on where the industry is in line with the Best Available Techniques (BAT). If an installation is lagging behind, then there is likely a case for strategic litigation or other actions that will improve the CO2 and other emissions performance of the steel industry installation.

The European steel industry is not among the biggest steel producers in the world, however in Eastern Europe Poland and Czech Republic are among the top 10 in the European Union. Though declining in recent years, Bulgaria has had traditionally strong steel industries and still has a significant production capacity.

The Bulgarian context

BlueLink has prepared a technical and legal study to explore the potential for deeper decarbonization of the steel industry through litigation or other relevant legal actions that will achieve a better environmental performance. The technical study assessed the compliance of Stomana Industry JSC – Pernik with the integrated permit and the best available techniques (BAT) for the steel sector.

The legal study assessed national administrative and legal framework, the main rules for authorization, Environmental impact assessment (EIA) procedures and integrated permits, relevant rules on the application of the BAT conclusions in the authorization process, as well as the competent authorities and relevant court practice. The key legal acts that regulate the environmental permitting of the steel plants in Bulgaria are the environmental framework law, the Climate change Mitigation Act and the two ordinances – on  environmental impact assessment (EIA) and on the integrated permits procedure.

Legal avenues for action

In the legal study we have analysed the legal procedures and available legal remedies concerning the integrated permit.
The access to information to the procedure of issuing integrated permit is important for the further steps and legal actions concerning the integrated permit. The Environmental Executive Agency (EEA) maintains a public register of integrated permits (https://registers.moew.government.bg/kr/) with information about the integrated permit number, the name of the operator, the site, competent authority, the permit decision or its revision, date and media of publication and its entry into force. The CA has obligations to provide access to information during the integrated permit procedure. Тhe CA begins a procedure for issuing an integrated permit, of which he notifies the operator in writing, and together with the municipalities, publishes and ensures for one month, on an equal footing, access of the interested parties to the application, including in the countries affected by the operation of the installation in terms of transboundary impact. It is important to note that the EEA maintains a public register on its website of the results the emissions monitoring provided for in the integrated permits (Аrt. 129, para.4 of EPA).

Another possible reason for challenging the integrating permit is non-conformity with the requirements for public participation in the EIA and integrated permit procedures which are carried out as a joint procedure. For example, the developer has to undertake consultations with the competent EIA authorities and the public concerned regarding the project. The members of the public could submit their written opinions prior to or during the public hearings, or no later than three days after the consultation by sending them to the developer and to the EIA authority.

Another avenue for challenging the integrated permit procedure is its judicial review. The decision for granting, refusal, modification, updating or revocation of an integrated permit (IP) is announced by the competent authority for permits through the mass media within 14 days after the date of issue, at the same time sending it to the states affected by operation of the installation in case of cross-border transfer. During this timeframe, the applicant shall also be notified in writing. Interested persons can appeal the decision pursuant the APC within 14 days after its announcement. In the practice of the Supreme Administrative Court, it is established that the non-governmental organizations could be constituted as an interested party in cases concerning the integrated permit procedures and have legal standing. Bulgaria and the European Union are Parties to the Convention on Access to Information, Public Participation in the Decision-Making Process and Access to Justice in Environmental Matters which is in force for Bulgaria from 16.03.2004, State Gazette no. 33 of 23.04.2004. For the European Union the Convention was approved by Decision 2005/370/EC of the Council of 17.02.2005.

Further, we reviewed the legal remedies available in the administrative, criminal and the civil law against the facility in case of non-compliance with the integrated permit.
The first legal remedy against non-compliance with the integrated permit conditions is the administrative control and sanctions. In case of damage or pollution of the environment above the permissible standards and/or in case of non-compliance with the specified emission standards and restrictions on sole traders and legal entities are subject to sanctions.

The competent authority for integrated permits reviews and updates the permit when causing pollution from the installation, which is so significant that it is necessary to revise the existing emission limits in the permit or to include new emission limits.

The control authorities develop, revise and, if necessary, update the inspection plan of the installations with integrated permits for the territory under their control. Based on the plan, the control authority regularly prepares programs for planned inspections, which indicate the frequency of on-site inspections for the various types of installations. The frequency of inspections is determined on the basis of a systematic assessment of the environmental risk of the relevant installations and is at least once a year for the installations that pose the greatest risk and three years for the installations that pose the least risk.

In case of receiving complaints and reports about accidents and incidents related to environmental hazards or cases of non-compliance with the conditions of the integrated permit, unscheduled inspections are carried out as soon as possible, and in the cases of an on-going procedure for issuing or renewal of the permit - before its conclusion.

The criminal offence relevant to the failure to fulfil the requirements of the integrated permit and thus cause pollution and damages to or to expose to risk people, animals and plants is contained in Art. 352 of the Criminal Code which states that those who pollute the soil, air, watercourses, territorial waters or internal sea waters or sea waters in areas defined by an international agreement in which the Republic of Bulgaria is a party, and thereby made them dangerous for people or animals and plants or unsuitable for their use for cultural and domestic, health, agricultural and other economic purposes, shall be punished by imprisonment from one to five years and a fine from five thousand to thirty thousand BGN.

Also, the operator could be liable for environmental pollution or damages on another person. According to Art. 170 of EPA, any person, who shall culpably inflict environmental pollution or damage on another, will be obliged to indemnify the aggrieved party. In cases where assets constituting state property has been damaged, the party empowered to bring an action is the Minister of Environment and Water, if the detriment extends over the territory of multiple administrative regions; or the competent regional governor, if the detriment extends over the territory of multiple municipalities. In cases where assets constituting municipal property have been damaged, the municipality mayor shall be empowered to bring the action. The aggrieved parties on behalf of the state, region or municipality may bring action against the offender for cessation of the violation and for remediation of the consequences of pollution occurred.


You could find the full text of the legal study here.
 

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