By Michael Vermaak,Ayanda Msimang Thursday, April 23, 2020

On 27 March 2020, the Minister of Environment, Forestry and Fisheries published a significant amendment to the National Environmental Management: Air Quality Act 39 of 2004 (NEMAQA) Listed Activities and Associated Minimum Emission Standards [1] (the NEMAQA Listing Notice).  The amendment relaxed the sulphur dioxide (SO2) emission limits for those large-scale coal power generation facilities, as well as certain other SO2 emitting industrial plants and processes, which were authorised to operate prior to 1 April 2010. The amendment was gazetted a few days prior to more stringent standards coming into effect for such facilities.

This is an issue which has a long history with competing interests being played out, sometimes through litigation, and current indications are that the battle over the introduction of the reduced SO2 emission standards is likely to continue.

By way of background, minimum emission standards (MES) are applied to a wide-ranging list of activities which result in atmospheric emissions that have, or may have, a significant detrimental effect on the environment, including health, social conditions, economic conditions, ecological conditions or cultural heritage. Once an activity is listed under NEMAQA, an atmospheric emission licence (AEL) is required in order to lawfully conduct the activity. All NEMAQA listed activities have associated MES, which include the permissible amount, volume, emission rate or concentration of substances that may be emitted. The listing notice for an activity may also contain transitional and other so-called ‘special arrangements’ in respect of activities which were already being carried out at the time of their listing.  

Reducing emissions can require major changes to plant infrastructure or to emission abatement equipment, which usually cannot take place without long term planning and budgeting. To accommodate a transition to more stringent standards, the NEMAQA Listing Notice includes MES for the older ‘existing plant’, and the more recent ‘new plant’, setting out phased compliance time frames intended for existing plants to ultimately achieve compliance with the more onerous new plant MES:

  • new plants were required to comply with new plant MES from 1 April 2010;
  • existing plants were required to comply with existing plant MES by 1 April 2015, unless where specified; and
  • existing plants were required to comply with new plant MES by 1 April 2020, unless where specified.

The NEMAQA Listing Notice requires all plants or processes that fall within the scope of being an ‘existing plant’ to comply with the MES for new plant by 1 April 2020, unless:

  • a once-off postponement is granted by the National Air Quality Officer – a postponement of the new plant MES compliance time frame is limited to a maximum period of five years and no postponement will be valid beyond 31 March 2025; or
  • a once-off suspension is granted by the National Air Quality Officer – a suspension of the new plant MES compliance time frame is only available for existing plants which will be decommissioned by 31 March 2030, and the application for suspension had to be made by 31 March 2019.

Consequently, all existing plants that will continue to operate after March 2030 and which have been granted postponements, will need to comply with the new plant MES by no later than 31 March 2025.  No postponement or suspension of compliance timeframes will be granted for compliance with the MES for existing plants.

The recent amendment to the NEMAQA Listing Notice creates a new ‘special arrangement’ for existing plants, which applies to the large solid fuel combustion installations that are used primarily for steam raising or electricity generation (specifically those installations with design capacity equal to or greater than 50 MW heat input per unit). This category includes the older large-scale coal power generation facilities among a range of other significant emitting industrial plants and processes.

While the general new plant MES for SO2 is still retained in the amended NEMAQA Listing Notice at a limit of 500 mg/Nm3 (under normal conditions of 10% O2, 273 Kelvin and 101.3 kPa), [2] the Minister has now included a special arrangement for existing plants that, instead of the stipulated 500 mg/Nm3 new plant MES having to be achieved by 1 April 2020, ‘Existing plants shall comply with a new plant emission limit of 1000 mg/Nm3 for sulphur dioxide (SO2)’. In effect, the amendment by the Minister doubles the maximum amount of SO2 that the older large-scale solid fuel combustion installations used for steam raising or electricity generation may emit, from the previous limit of 500 mg/Nm3 to 1000 mg/Nm3. This provides financial relief to some of the country’s major SO2 emitters as the costs of upgrading or retrofitting air emission abatement equipment on existing facilities can be substantial.

This special arrangement only applies to solid fuel combustion facilities that fall within the scope of being existing plants, being those facilities that were legally authorised to operate before 1 April 2010, or any plant where an application for authorisation in terms of the National Environmental Management Act 107 of 1998 (NEMA) was made before 1 April 2010. These facilities need to comply with the amended, more lenient, SO2 limits from 1 April 2020, unless a postponement or suspension of compliance with the new plant MES was previously granted in relation to a facility.

This amendment to this SO2 MES has been in the works since October 2018, when a previous Minister included in the NEMAQA Listing Notice an amended new plant emission limit for existing plants that mirrored the amendment that was effected on 27 March 2020. However, the 2018 amendment of the NEMAQA Listing Notice had not been previously released for public comment prior to promulgation and was thus the target of litigation by an environmental interest group. The 2018 amendment was then withdrawn in May 2019, and the proposed amendment which was ultimately effected on 27 March 2020, was subsequently released for public comment.

In a media statement,[3] the Department of Environmental Affairs, Forestry and Fisheries (Department) indicated that the relaxation of the SO2 MES through the amendment was in part based on a technical and cost benefit analysis by independent scientists and Departmental specialists, taking into account factors such as the quantum of the investment that would be required by major SO2 emitters to achieve compliance with a limit of 500mg/ Nm3. Also factored in were the financial circumstances of major SO2 emitters, according to the Department rendering them unlikely to be able to meet the 500 mg/Nm3 standard in the near future. The Department noted that it recognised the ‘divergent viewpoints’ reflected in the comments that were received, on the one side with certain industries having motivated that the emission standard for SO2 should be retained at the existing plant MES limit of 3500 mg/Nm3 for all pre-2010 plants, even those that are not going to be decommissioned by 2030. On the other hand, the Department also noted that there were strong arguments made against the relaxation of the SO2 limit by environmental organisations, based on current air quality and human health impacts. This led the Department to conclude:

‘In weighing up these submissions, the Department has chosen a middle path which will allow for the progressive achievement of environmental rights and improved air quality for human health, without undermining the viability of key industries … We nevertheless find it regrettable that the challenges facing our country in relation to energy security and the state of the economy, have resulted in a slower achievement of the desired state of air’.

That is not necessarily going to be the last word on this matter. Looking forward, it seems most likely that the Department will, over time, ratchet the emission limits for existing facilities down towards the 500 mg/Nm3 mark. However, further challenges by non-governmental organisations and environmental interest groups to the relaxation of the SO2 standards are also anticipated, as is continued sustained pressure from civil organisations on government, as well as targeted companies, to improve air quality and reduce emissions.  To illustrate, a recent media release by the Centre for Environmental Rights[4] concludes with the statement that, ‘If the Minister fails to provide satisfactory reasons for her decision to weaken the MES under the Promotion of Administrative Justice Act, 2000, the partners in the Life After Coal Campaign will have no option but to approach the High Court to set aside the Minister’s decision’.   

Notwithstanding the relaxation of the SO2 MES for existing plants, holders of AELs that relate to the NEMAQA listed activity that are affected by the relaxed limit (i.e. solid fuel combustion installations used primarily for steam raising or electricity generation with a design capacity equal to or greater than 50 MW heat input per unit) also need to closely scrutinise the conditions and requirements contained in their current AELs to see what is said about SO2 standards and compliance time frames (compliance with the specific MES limit, and the time frame for compliance, is often contained as a condition or requirement of an AEL). There could be conditions or requirements embedded in current AELs which stipulate that the 500 mg/Nm3 standard is required to be achieved by or before 1 April 2020, which means that, if compliance with that limit is not being, and cannot be achieved, an amendment of the AEL conditions would still need to be motivated to and approved by the licensing authority, based on the promulgation of the revised, more lenient, MES. It should be noted that non-compliance with a condition or requirement of an AEL is a criminal offence, and may result in a maximum fine of ZAR 5 million or five years imprisonment (in the case of a first offence), and is also a NEMA Schedule 3 offence, attracting potential director, employee and agent personal criminal liability.

[1] Listed Activities and Associated Minimum Emission Standards identified in terms of section 21 of the National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004) published in Government Notice 893 in Government Gazette 37054 on 22 November 2013, as subsequently amended.

[2] The existing plant MES for SO2 is set at 3500 mg/Nm3 in the NEMAQA Listing Notice.