Is show cause notice sufficient to drive compliance in industrial units?

The current regulatory regime is delaying compliance by a decade

By Soundaram Ramanathan
Published: Monday 10 February 2020

Ten power stations in the Delhi-NCR air shed of 11,890 MW capacity and five more stations in the south were issued show cause notice last week by the Central Pollution Control Board (CPCB) for missing the deadline to meet the new emission norms.

The plants that have received notices from CPCB Chairman SPS Parihar are:

  • Indira Gandhi TPS, Jhajjar, Haryana
  • Deen Bandhu Chhotu Ram TPS, Yamunanagar, Haryana
  • Panipat TPS, Panipat Haryana
  • Rajiv Gandhi Thermal Power Project, Hisar, Haryana
  • North Chennai TPS, Tamil Nadu
  • Rajpura TPS, Patiala, Punjab
  • Talwandi Sabo Power Plant, Mansa, Punjab
  • Guru Hargobind TPS, Bathinda, Punjab
  • NTPC TPS in Dadri, Uttar Pradesh
  • Harduaganj TPS, Aligarh, Uttar Pradesh
  • Kothagudem TPS, Khammam, Telangana
  • Singareni TPS, Telangana
  • Damodaran Sajeevaiah TPP, Andhra Pradesh
  • Vizag Hinduja TPP, Vizag, Andhra Pradesh

To meet the new emission norms, power stations have to install a new pollution control equipment to control sulphur dioxide, and fine-tune existing burner as well as dust collecting systems to meet the particulate matter and oxides of nitrogen norms.

However, these stations have made very little progress in installing new equipment or fine-tuning their systems over the last two years.

The Central Electricity Authority has been publishing quarterly reports over the last two years indicating this gap. Delhi-based non-profit Centre for Science and Environment (CSE) has released two reports and press releases highlighting the lack of action.

The norms were announced in 2015. The first deadline was in 2017, which was missed. Then, a curative notice was issued to these plants by the CPCB with a second deadline.

The CPCB has been forced to issue a show cause notice under Section 5 of the Environment Protection Act of 1972 after the plants skipped abiding by the second deadline of 2019.

“The plants have reached a tipping point and the board can now charge them a penalty and drive compliance,” DD Basu retired scientist, CPCB, and advisor, CSE, said.

“The current procedure to ensure that an industrial unit meets a new norm is to first issue a deadline to upgrade. When this deadline gets missed, the board is empowered to serve a notice asking why the norm was missed which is called the curative notice,” he explained.

After a curative notice based on the explanation given by the industrial unit, the deadline gets revised, Basu said.

It is only after the revised / second deadline is missed, that the board issues a show cause notice asking the plant to explain within 15 days why it cannot meet the norms and why it should not be closed for the violation or charged penalty for the violation.

“In most cases by then, the industrial unit comes with a firmer commitment. The pollution control board then collects a bank guarantee and approves a third deadline. Only if this third deadline gets missed, the board takes a firmer action like closure. This gives the board more room to have a strong stand if the aggrieved industrial unit rushes to court,” Basu added.

Three types of penalty can be issued currently by a pollution control board regulator on reporting violation if the final deadlines are missed:

  1. Under Section 15(1) of the Environment Protection Act, 1972, a maximum fine of up to Rs 1, 00,000 a day can be charged for non-compliance. The Environment Pollution (Prevention & Control) Authority (EPCA) in its Report No. 81 dated February 14, 2018 recommended the same to the court.
  2. According to the CPCB’s in-house committee on Methodology for Assessing Environmental Compensation, each non-complying power generating unit is bound to pay between Rs 10,000 and Rs 60,000 a day till compliance is sought.
  3. SPCBs can introduce a Bank Guarantee scheme or issue penalty or close the unit. Under the Bank Guarantee scheme, a state pollution control board requires the non-complying firm to post a bank guarantee to ensure the implementation of corrective actions in accordance with the negotiated compliance schedule.

Renewal of consent to operate is conditional on posting the guarantee. Normally, 10 per cent of the estimated total compliance cost is required as bank guarantee.

If power stations fail to comply on time, the SPCB forfeits a portion or the entire bank guarantee for its discretionary use. The procedure to determine the amount of forfeiture, and the decision on use is made by the SPCB chairperson and member secretary.

There is no mechanism available currently for the pollution control board or other regulators to course correct industrial units failing to meet the pollution norms before a long deadline.

This is invariably delaying the enforcement process.

Current penalty systems kick in only after the deadlines are surpassed. However, construction of a pollution control technology / flue-gas desulphurisation unit is a sizable project.

It takes at-least 2 years for a station to complete construction. Hence, a coal-based power project with a 2022 deadline must begin construction by 2019. If left unmonitored and if the action is taken only after 2022, the deadlines might get further postponed to another 2-3 years.

Under the current regulatory mechanisms, coal-based power plants with second deadline of 2022 is left with a loophole to further extend their compliance schedules to 2024-25. This translates to a 10-year enforcement regime. Therefore, intermediate measures to identify non-compliance are necessary to ensure timely compliance of norms. 

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