Environmental Performance Report 2007

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| Foreword | Chapter 1 Scope of Report | Chapter 2 Vision and Strategy | Chapter 3 Organisation and Governance | Chapter 4 Stakeholder Engagement | Chapter 5 Sustainability at EPD ¡V Economic Impacts | Chapter 6 Sustainability at EPD ¡V Environmental Impacts | Chapter 6 - Part A Environmental Impacts of Policies and Programmes | Chapter 6 - Part B Environmental Impacts of Internal Operations | Chapter 7 Sustainability at EPD ¡V Social Impacts | Chapter 8 Targets - Progress review and setting for 2007 | Appendix I Environmental Policy | Appendix II EPD Offices and Facilities | Appendix III Environmental performance reports of government bureaux/departments and agencies | Verification Statement | Feedback Form |

Chapter 5   Sustainability at EPD ¡V Economic Impacts

1.   As described in Chapter 3, the EPD is funded from the Government's General Revenue Account. The total expenditure for 2006 was $2.042 billion.

2.   The EPD is also the client for major upcoming works projects in waste management and sewage treatment that will have financial implications for the community. More than $8 billion will be spent to extend landfills, another $8 billion to build Stage 2A of the Harbour Area Treatment Scheme (HATS). The Government will pay the capital costs of these facilities. However, in accordance with the polluter pays principle, it has taken the view that the public should share the operating costs.

Polluter Pays

3.   The Government is already applying the polluter pays principle in several areas to help clean up the environment and encourage less wasteful habits. Chemical waste producers currently pay part of the cost of treating their waste, while homes and businesses pay a portion of sewage treatment costs. Charges for construction waste disposal have been introduced and charges for municipal solid waste are being explored. In 2006 progress towards fuller recovery of waste and sewage treatment costs was made in the following areas:

Sewage Charges

3.1   Sewage charges currently meet 54 per cent of operating costs, a percentage that is declining because charges have remained unchanged since 1995, while costs are rising. With the commissioning of HATS Stage 2A and other new sewerage facilities in the pipeline, the operating expenses for sewage services will more than double over the coming ten years. The Government has proposed to raise charges by modest gradual and predictable increments so that by 2016-17 they would meet about 80 per cent of the operating costs of HATS Stages 1 and 2A and other sewage works (the average household would pay $27 per month in 2016 against $11 per month in 2006). Stakeholders have been consulted on this issue and are generally supportive. A single piece of legislation with a fixed, 10-year schedule for sewage charge increments will be proposed to the Legislative Council in 2007.

Trade Effluent Surcharge

3.2   Commercial and industrial operators with higher pollution loads pay a Trade Effluent Surcharge (TES). Thirty trades are subject to the TES and they currently pay 83 per cent of the cost of treating their sewage. Individual companies can seek re-assessment if they reduce the contamination of their effluent. In December 2006 proposals were announced to streamline re-assessment procedures. The EPD will also survey effluents produced by the trades, and this will form the basis for adjusting TES rates in 2008.

Construction Waste Charges

3.3   Charges came into effect on 20 January 2006, with waste producers paying various charges to dispose of waste at landfills ($125 per tonne), sorting facilities ($100 per tonne) and public fill reception facilities ($27 per tonne). By the end of 2006, there was 40 per cent less construction waste at landfills and 25 per cent less waste overall. Waste charges may have contributed to the decline in waste loads, although other factors such as building activity also have an impact.

Photo - Posters promoting landfill charging.

Municipal Solid Waste Charge

3.4   A three-month trial was launched in 20 housing estates in November to examine the feasibility of introducing a variable rate charging scheme for municipal solid waste. At the end of the trial, EPD will collect views from stakeholders and examine in further details the feasibility of a charging scheme in light of the feedback received. Our target is to consult the public on practicable options in 2007 before introducing relevant legislation to the Legislative Council.

Producer Responsibility

4.   In line with the principle of "polluter pays" the Government proposes to introduce producer responsibility schemes (PRSs), under which manufacturers, importers, wholesalers, retailers and other waste producers take responsibility for avoiding, recovering and recycling their waste. A voluntary PRS has been set up for rechargeable batteries and we are currently developing PRSs for plastic shopping bags, waste tyres and waste electronic and electrical equipment. Subject to public consensus and support, a "Product Eco-Responsibility Bill" could be presented to the Legislative Council within 2007 to provide a legal framework for mandatory PRSs. (See Waste of Chapter 6 - Part A for further details).