CPCB penalty to industries at Mahul, Ambapada pave way for polluter-pays principle

Report submitted by the Central Pollution Control Board penalising the industries based on their quantum of pollution is a roadmap for better enforcement of regulations and compliance of industries

By Shobhit Srivastava
Published: Friday 21 August 2020

The residents of Maharashtra’s Mahul and Ambapada near Chembur, a large suburb in eastern Mumbai, filed an application before the National Green Tribunal (NGT) in 2014 over the issue of air pollution caused in the area by industries.

The NGT December 18, 2015 found Aegis Logistics Ltd along with Sea Lord Containers Ltd, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) as the source of deteriorating air quality, a threat to the health of the residents.

The Central Pollution Control Board (CPCB) was directed by the NGT July 15, 2019 to assess the value of damage to the environment and to public health. This amount was to be recovered from the polluting units.

The CPCB submitted a report March 18, 2020 assessing the quantum of volatile organic compound (VOC) pollutants by Sealord, Aegis Logistics, BPCL and HPCL. They found the respective liability to be of compensation given for five years on the basis of the polluter-pays principle.

The CPCB report is an in-depth study to estimate the environmental damage cost using the scientific methods, data collected from industries and through site visits.

It is understood this approach was suitable in handling the penalties to the industry, looking through the highlights of the methodology followed. This was because it used actual data from the source that can be used more frequently in enforcing regulation on the industries.

The various methodologies were considered by CPCB for estimation of damage cost in monetary terms to bring robustness in the evaluation procedure.

Coverage and methodology of the report

The report — according to NGT directions — covered the following points:

  • Database on VOCs (estimated generation)
  • Estimated monetary value of VOC impact on the environment
  • VOC impact on public health in the area and its estimated compensation

An in-house committee of CPCB was constituted to study these issues. The methodology followed for assessment of environmental damage and restoration involved the following four steps:

  • Estimation of VOCs emissions
  • VOC emission modeling
  • Environmental damage cost estimation due to VOC emissions
  • Preparing comprehensive action plan to restore the environment

The CPCB conducted a questionnaire survey in the four industries and collected data related to VOC emissions, tanks and specific units along with a site visit to understand the process of the industries, storage system of the various chemicals / petroleum products and VOC recovery system.

An emission estimation of the VOCs was carried out in relation to its various sources present in the respective industries. This was done by using emissions factors from the AP-42 method developed by the United States’ Environmental Protection Agency (EPA). The total VOC emissions (in kilogramme per day) were estimated from each source for Aegis Logistics, Sea Lord, BPCL and HPCL.

Emissions estimation of various sources after control measures

Source of VOC

HPCL (kg / day)

BPCL (kg / day)

Aegis (kg / day)

Sealord (kg / day)

Storage tanks





Cooker control unit

Covered in leak detection and repair testing (LDAR)




Capacity-related unreliability

Covered in LDAR

Covered in LDAR



Sulfur recovery unit

Covered in LDAR









Wastewater plant










Losses from loading





Total in (kg / day)





Source: CPCB

How was environmental damage cost estimated?

The cost was worked out to be Rs 288.2 crore by the CPCB. This was based on environmental and health impacts from VOC emissions. The Environment damage cost assessment (EDCA) was carried out using the below steps:

  • Identification of pollutants
  • Selection of EDCA method based on likely occurring damages from the type of pollutant released
  • Assessment of damage cost in monetary terms is estimated

The damages cost assessment methodology was finalised for VOC emissions in the Mahul area based on the above steps. The Contingent Valuation Method (CVM) and Value Transfer Method (VTM) was used for current estimates.

One of the most widely used methods of CVM is Willingness to Pay (WTP) or, in this case, Willingness to Accept (WTA), a central concept in assessing external costs of environmental pollution. The person affected by pollution governs the minimum cost acceptable to him for lost goods and / or services in WTA.

The CPCB referred to various studies based on the estimates of the WTA, according to the report. Damage cost due to VOCs was calculated using WTA.

VTM was used to verify the analysis done through WTA and to estimate economic values for ecosystem services or damages by transferring the available information from studies already completed in another location and / or context.

For the calculation of environmental damage cost assessment for total VOC emissions from industries following parameters are used- Total VOC, Damage cost, purchasing power parity, inflation, (Pop density) normalization (Refer CPCB report for details)

CPCB in-house committee, with the assistance of CSIR NEERI, calculated the environmental damage cost for VOCs emission.

Damage cost for VOC pollutants

Environmental damages

Rs / year / tonne of pollutant
First quartile (lower range) 12 lakh
Second quartile (medium range) 21 lakh
Third quartile (upper range) 60 lakh

Source: CPCB

VTM values for per ton of VOC emissions

Environmental damages

European study converted (Rs / tonne)
Low sensitivity 20,32,022
Medium range 26,50,463
High sensitivity 39,75,694

Source: CPCB

The damage cost with respect to each industry, for the past five years was calculated by the CPCB. Compensation for the damage caused due to VOC pollutants emitted by the industries was assessed considering the second quartile (medium range), based on the statistical analysis by the CPCB.

Estimated environmental damage cost for each industry

Name of company

Total VOC emissions based on present emission level

Damage cost / year

Damage cost for five years


(kg / day)

Tonne / year

(Rs in crore)





















Source: CPCB

The damage cost was estimated using VOC emissions load according to the present emission level considering the VOC recovery system installed by individual industries had efficiencies comparable to the Best Available Technology (BAT).

The BATs were implemented on different source of emissions in stages. Prior to their implementation, the pollution potential of the industries was relatively higher than present emissions, causing greater damage to the health and environment.


Delhi-based think-tank Centre for Science and Environment assessed the report submitted by the CPCB and found it was prepared using the US EPA AP-42 emission factors for estimation of VOC emission loading from each of the four industries.

It also used the WTP / WTA concept that is usually applied in consultancy studies pertaining not just to the environment, but also to agriculture and the economy.

Several research studies are available for this concept, showing the credibility of the method. There were a few studies used to penalise polluting and non-complying industries that consider the health and environmental impacts of the pollution.

This study was, in a true sense, based on the polluter-pays principle. It is recommended for the CPCB to conduct similar studies for industries / industrial areas in other states where the problem of pollution is significant.

This report will pave way for better enforcement of regulations and compliance of industries. It is a tool for regulators to assess major polluters and penalise them.

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.