Environment Agency ratchets up enforcement of the fluorinated greenhouse gases regime: what penalties may businesses face?

The Environment Agency continues to take enforcement action in relation to breaches of the fluorinated greenhouse regulations. The agency has issued more than £3 million of civil penalties for breaches of the fluorinated greenhouse gases regulations over the last 12 months. This is an increase on the previous 12 month period, when the amount of issued fluorinated-gas civil penalties totalled around £1.3million.

This article highlights who the fluorinated greenhouse regulations apply to and explores the penalties we’ve seen recently. 

Who do the fluorinated greenhouse gases regulations apply to?

The fluorinated greenhouse gases regulations apply to anyone who uses or services equipment that contains hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. The regulations also apply to anyone who produces, imports, exports or sells fluorinated gas or equipment containing fluorinated gas. Hydrofluorocarbons, for example, are commonly used in refrigeration, air-conditioning and heat pump equipment.

What penalties have been issued so far?

The majority of the £3 million sum consists of 11 civil penalties issued to John Brett, a man in his 80’s who was involved with shipping hydrofluorocarbons. Brett was issued with £1,045,750 worth of civil penalties.
 
Brett had originally been given notice of 12 civil penalties, all of which he attempted to  appeal at the First-tier Tribunal. However, he was only successful in appealing one penalty which the agency was subsequently ordered to withdraw on the basis of an error in fact.

Brett also received the five largest penalties in this period at £200,000 each. These all related to ‘failing to obtain a sufficient hydrofluorocarbons quota’ before placing these gases on the market within Great Britain. 

Breaches of this quota requirement were the most common offence in the database, with more than 50 penalties issued for this reason. 

EDF Energy Nuclear Generation were issued with a penalty of £75,000 for failing to have a leak detection system in operation. AGCO were fined £60,000 for failing to have sufficient fluorinated gas allowances and Electrolux Plc were penalised £10,500 for failing to keep records of fluorinated gas.

Air conditioning and refrigeration firm Klima-Therm Ltd appealed a £44,725 penalty issued to it by the agency. The agency agreed to reduce the figure to £20,000. Transport solutions company Scania also successfully reduced a penalty from £200,000 to £90,511.

Global distributor Kool Blast Gas Europe Limited was issued seven civil penalties for fluorinated gas breaches, totalling £16,207. The company, which produces products containing hydrofluorocarbons, unsuccessfully appealed the penalties.

Paul Collins, senior associate in our business risk and regulation team, has advised on compliance with climate change regimes including the EU Emissions Trading Scheme and the UK Emissions Trading Scheme, the Energy Savings Opportunity Scheme, the Climate Change Agreements scheme and the Fluorinated Greenhouse Gases regime. This includes successfully representing clients before the First-tier Tribunal and the Upper Tribunal in more than 100 appeals.

For more information, please contact the business risk and regulation team.