Oss Group Ltd, R (on the application of) v Environment Agency & Ors

Under the Waste Framework Directive, material originally discarded can cease to be waste before combustion. The question is fact-sensitive and requires a value judgment using objective indicators, the Directive’s environmental aims and the need to preserve its effectiveness. A later holder’s intention to use material, and its economic value, are not alone decisive.

Combustion is not an automatic end point. Waste-derived material may cease to be waste where it has become a distinct, marketable product used in the same way as an ordinary fuel and with no worse environmental effects. The court rejected both the Agency’s rule that waste remains waste until burnt and DEFRA’s requirement of near-identity with virgin material. It declined to formulate a definitive test.

OSS collected waste lubricating and fuel oil and processed it into clean fuel oil intended for use as fuel. It challenged the Environment Agency’s view that the material remained waste until combustion and therefore fell within the controls of the Waste Incineration Directive. Burton J, hearing OSS’s case alongside a related case concerning Solvent Resource Management Ltd, accepted the Agency’s legal position.

Only OSS appealed. The factual question whether the processed oil was sufficiently safe or comparable to virgin fuel remained unresolved. The central issue was whether lubricating oil which had not originally been used as fuel, but had become waste, could later be burnt other than as waste.

Appeal allowed. Carnwath LJ gave the leading judgment; the Master of the Rolls and Maurice Kay LJ agreed. The appeal question was answered in the affirmative.

1. The Agency’s approach was too narrow. The fact that waste-derived material is destined for combustion does not mean that it must remain waste until it is burnt. That conclusion was inconsistent with the answer given by the European Court in ARCO Chemie Nederland v Minister Van Volkshuisvesting [2002] QB 646.
2. The term discard in Article 1(a) of the Waste Framework Directive must be applied through a value judgment based on all the circumstances. In practice, objective indicators derived from the Directive’s aims and the need to preserve its effectiveness are more useful than the later holder’s subjective intention alone. Material originally classified as waste generally remains so until acceptable recovery or disposal has been achieved.
3. A practical application of that approach is found in Icopower BV v Secretary of State. It may be enough that waste has been converted into a distinct, marketable product which can be used exactly like an ordinary fuel and with no worse environmental effects. The objectives of the Directive require no mimicry or complete indistinguishability from virgin material.
4. The court approved the objective-indicator approach illustrated by Palin Granit Oy [2002] 1 WLR 2644 and Scottish Power Generation Ltd v Scottish Environment Protection Agency [2005] SLT 98. It explained that the narrower reasoning in Niselli (2004) Case C-457/02 could not support a general requirement that material be hardly distinguishable from virgin material. To the extent that Castle Cement v Environment Agency [2001] Env LR 46 adopted the same approach as Burton J, that reasoning was not accepted, although its result might have been justified on its own facts.
5. The Waste Oils Directive and other related Directives did not modify the general definition in the Waste Framework Directive. The court declined to decide whether OSS’s process amounted to regeneration under the former Directive, declined to formulate a definitive end-of-waste test, and considered a further European reference unsuitable on the unresolved facts. The authorities were invited to develop practical guidance.

• Court of Appeal (Civil Division) — [2007] EWCA Civ 611: appeal allowed and the appeal question answered affirmatively.
• Administrative Court, Queen’s Bench Division — Burton J, claim CO/2157/2006: accepted the Environment Agency’s view that waste lubricating oil remained waste until combustion.