What are Environmental Liabilities?
Environmental liabilities are the actual or potential costs for which the owner of a business is liable to meet their environmental obligations.
Environmental liabilities arise at EPA licensed facilities due to
- the need to undertake orderly closure, restoration or aftercare. These are considered “known liabilities”) that will arise, and will need to be met, at the end of the operational lifetime of the facility
- Licensed operators assess and compile costings for known liabilities by means of a CRAMP or Closure, Restoration and Aftercare Management Plan.
- the obligation to remediate the impacts of unplanned events that might occur during the operation of a facility at their facility. These are “unknown liabilities”, but they are foreseeable and need to be catered for.
- These unknown liabilities are assessed and costed by means of an ELRA or Environmental Liabilities Risk Assessment.
Financial provision is the fund or other financial instrument that licensed operators must put in place to provide for the cost of meeting their CRAMP and ELRA liabilities before they arise.
The EPA also encourages operators to take steps to actively reduce their environmental liabilities by upgrading their sites and improving their operational methods. This helps them to prepare for closure and to minimise risks of an incident and limit the impact of the event if one does occur. This in turn reduces the financial provision the operator must put in place.
The costs associated with environmental liabilities can be significant, and the EPA works to minimise the exposure of the state to the costs of remediating environmental damage and pollution. This complies with the polluter pays principle and helps the licensee to meet their EPA licence requirements.
Which licensed sites need financial provision?
The EPA has applied a risk based approach to environmental liability and financial provision requirements. As a result, only licensed facilities that pose a greater relative risk to the environment must assess their environmental liabilities and put financial provision in place. We believe this is a balanced and fair approach for both industry and the public. It ensures robust financial security against the greater liabilities among licensed sites and also minimises financial risk to the Irish taxpayer.
What kind of financial provision?
Once a licensee’s environmental liability costings have been agreed with the EPA, there are a number of options available for putting in place their financial provisions. Our Guidance Document sets out the various types of financial instruments and how and where they can be used, depending on the individual circumstances of the licensee.
Not all existing financial provisions options will be available; for example, under Irish Law, insurance cannot be used to cover the costs of known liabilities such as the closure of a facility.
Regardless of the type of financial provision used, all financial provisions must be:
- sufficient, and
- available when required.
Licensees should consider the available options and then propose their selected instrument for agreement by the EPA.
EPA Guidance and Resources
This webpage contains the EPA’s current requirements for financial provision, assessing and costing environmental liabilities. It provides guidance to assist licensees in assessing their own obligations, a list of Frequently Asked Questions on the subject and a number of alternative Financial Provision Templates.
Pre AIE Request 22/2/22:
Where are the CRAMP and ELRA plans published ? eg Roadstone, Bord na Mona, the three landfill sites, etc
Pre AIE response via email from EPA
The list of EPA facilities that are subject to Financial Provision/CRAMP/ELRA requirements is not formally published; it is subject to change as the FP Priority status of a facility can change e.g. a site can be deemed no longer FP Priority if it is no longer listed as a Seveso site or if a high risk contaminated land site is restored following successful remediation, or added as an FP Priority facility, for instance, if a new EPA license is issued for a hazardous waste transfer station.
Unlike most documents submitted to the EPA by licensees, CRAMP/ELRA/FP documents are submitted on a confidential basis because they contain financial information.
Section 39 of the EPA Acts prohibits the disclosure of confidential information without the consent of the EPA Board.
Sample AIE submitted on Aughinish
Under the AIE Regs to request copy of the latest Financial Provision/CRAMP/ELRA reports for Aughinish (Limerick)
1) Financial Provision/CRAMP/ELRA reporting is not published by EPA
2) The EPA Financial Provision Team note that S39 EPA Acts prohibits the disclosure of confidential information without the consent of the EPA Board. This is potentially in conflict with AIE / Open Data Directive, so I propose to ask for environmental liability records on a single site to test
3) If the AIE is successful, then we will request the database of Financial Provision/CRAMP/ELRA reports under the Open Data Directive, as the list changes, AIE is not a suitable process for disclosure
4) I would suggest that S39 would not apply to the publication of list of EPA facilities that are subject to Financial Provision/CRAMP/ELRA – ie the list named licencees subject to environmental liability regs. I have asked for the list from Financial Provision team, but if not available on request, please add the list to this AIE.
Note: AERs contain a record to identify if environmental obligations are in place, what type, and when last updated, eg this is for Aughinish