ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(77)630
Vol.1977/0202

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)630final.
Brussels.8Decem'be'r1977
Draft
COUNCIL RECOMMENDATION
totheMemberStatesregardingmethodsofeva­
luatingthecostofpollutioncontroltoindustry
(submittedtotheCouncil "bytheCommission)
ce;.:(77)630final.

IntheProgramme ofAction oftheEuropean Communities onthe
Environment ,which was approved inthedeclaration ofthe
Council oftheEuropean Communities andoftherepresentatives
ofthe Governments ofthe Member States meeting inthe Council
of22November 1975 jthefollowing action iscalled for (l):
"The study ofmethods for evaluating the cost3 ofanti-pollution
measures with aview toharmonizing them -The first stage will
beanattempt todefine methods for evaluating the costs of
combating water ,air andindustrial pollution .Thework will be
carried out incollaboration with the OECD ".
Itshould beemphasized that the evaluation ofthe costs of
existing pollution control plants notonly provides information
onthe costs ofpolicy measures already taken but canalso be
used tofacilitate the forecasting ofthe costs offuture
policy measures .Because avery wide range ofpollution control
plant nexists ,embracing wide variations inthelevel ofcontrol
achieved ,thetechnical process used ,andthedata atxvhich the
plants were bui.lt ,itispossible toconstruct cost curves from
such data ,showing the range ofcosts associated with different
levels ofpollution control .From these cost curves aforecast
canbemade ,for example .,ofthe costs associated with the
general introduction ofthemost technically advanced pollution
control plants currently inexistence .Olher -information will
usually also berequired inorder totake new policy decisions
(e.g. information onpollution control techniques with which
there isasyetnopractical experience )butknowledge cfcosts
actually incurred 5aay thus beofconsiderable importance .
Inpractice ,different methods arestill used indifferent
Member States and even within asingle Member State toevaluate
the actual orprobable costs incurred byindustry ,sothe data
obtained are seldom directly comparable atCommunity level .
Itistherefore necessary toadopt acommon set ofrules to
which all future studies ofpollution control costs inindustry
conducted inthe Member States should conform .
Possible methods have beentt-ried inpractical sectoral studies
within theCommission ,byMember States themselves ,and on
behalf ofthe OECp Environment Committee .Inthelight of
these studies and ofextensive discussion inthe Group of
(l)O.J. No.C112 of20December 1973

Environment silEconomic Experts *oftheproblems they have raised ,
itnow seems opportune topropose asingle methodology for
future pollution control cost studies ofparticular sectors •
ofindustry within theCommunity which will ensure &min5.mum '
ofcomparability oftheresists they produce .
Asregards the sampling methodology used inactually collecting
cost data ,this may consist intaking asample ofthe industi*y
concerned bymeans ofaquestionnaire ,incollecting information
from theproducers ofpollution control equipment ,instudying­
"representative "plants within the industry ,orinacombination
ofthese .Itisdoubtful whether any one ofthese alternatives
isalways tobepreferred inallbranches ofindustry ,sothat
itvould not beappropriate atthis stage todecide infavour
ofone ofthem .Inthis case ,themaintenance offlexibility
inthemethodology ofevaluation ismore important than the
relatively small improvement incomparability which would
result from theadoption ofasingle sampling methodology .
Finally ,inorder toensure that asmuch comparable data as
possible onpollution control costs inindustry isavailable '
atuCommunity level ,itisappropriate that theresults of
all such cost eval'iD(iticn studies available toMember States'
becommunicated tothe Commission .
*TheCommission convened this group forthe first time on
£5January 1972 .The group discussed problems ofcost
evaluation methodology atitsmeetings© ?25*1.72 ,25-5-72,
8,9.1-73 ,10,11 -5-73and29-1.7 ^-Working documents ofthe
Commission onthesubject were discussed byiton11.7-7 ^
and16,17.6.75 andearlier drafts ofthis recommendation
on12.2.76 and15,16.7.76 .

Draft Council Recommendation tothe Member States
Regarding Methods ofEvaluating '.
the Cost ofPollution €ontrol toIndustry •
TEE COUNCIL OFTHE EUROPEAN COMMUNITIES V
Having regard totheTreaty establishing theEuropean Coal and
Steel Community ;
Having regard totheTreaty establishing theEuropean Economic .
Community ;
Having regard totheTreaty establishing theEuropean Atomic
Energy Community ; .
Having regard tothe draft recommendation submitted bythe ■
Commission ; - '
Having regard totheOpinion ofthe European Parliament ;
?■Having regard totheOpinion oftheEconomic andSocial Committee ;
Whereas ifthe Member States were todiffer intheir ecti.mates
astothe cost ofanti pollution measures ,particularly ifthese
estimates were not based oncomparable legislative measures and
auniform definition ofcouts ,thepossible repercussions ofthin
onpolicies atthenational level would sever e.lyhhamper the
implementation ofacommon policy :5
Whereas this statement ofprinciple wasadopted intheProgramme
ofthe European Communities onthe Environment ,which was
approved inadeclaration oftheCouncil ofthe European Communities
and ofthe representative3 ofthe Governments oftheMember
States meeting intheCouncil of22November 1973 .(l),y'~-'
Whereas these cost evaluations are intended todetermine the size
oftheburden tobeborne bythe economy asav/hole orby
individual branches ofindustry ifspecific measures aretaken
bytheauthorities toprotect the environment ,toprovide data
onthemost co^t-eff ective ways ofrouc^ing pollution and ,under
certain conditions ,tohelp todetermine quality objectives
and/oremission standards ;
WhereB3 the evaluation ofthe costs ofexisting pollution control
plants not only provides information onthe costs ofpolicy
measures already taken but canalso beucsed tofacilitate the
forecasting ofthe costs offuture policy measures ;
(l)O.J. No.C112 of20December 1973

-2-
»»
Whereas itisofgreat advantage toboth local and national
authorities andindispensable fordecision-making atCommunity
level ,tohave access tocomparative data onthe costs of
existing pollution control plants inindustry from various
Member States ofthe Community ;
Whereas for this purpose itwould bebeneficial that theMember
States introduce assimilar methods ofevaluation aspossible
byadopting acommon setofprinciples towhichjfuture .studies of
pollution control costs inindustry should conform ; ..
RECOMMENDS ,within themeaning oftheEECTreaty ,that inrespect
ofthe evaluation ofthe cost ofpollution control inparticular
branches ofindustry ,theMember States secure the use ofthe
principles ,definitions andmethods contained intheannex
tothis recommendation and that whenever possible they communicate
tothe Commission the results ofall such studies .
Done at
*
For the Council
The Président

ANNEX
Part I
Principles ,Dofinxtlons and Methods
1.Thepollution control costs tobeevaluated intheindustries
concerned should relate totheir plants contributing tothe
prevention ,elimination orreduction of ■ '
(a) water pollution
(b) airpollution
(c) noise orvibrations ortheir effects .
(d) solid orliquid waste
(e) damage duetotheabove factors
2.Theactual collection ofcost data should bepreceded bya
technical survey oftheindustry concerned .This descriptive
phase should identify the different production technologies
used inthe industry ,their environmentally harmful by-products ,
and theprimary and secondary pollution control processes
(including changes intheproduction process )used toreduce
these .Other factors orcharacteristics oftheprocesses which
arelikely togive rise inpractice toconsiderable differences
incost for otherwise similar pollution control processes should
also beidentified .Such factors may include ,forexample ,the
age oftheplant orthe characteristics ofthe ret«materials
ituses .Insuch acase the since process operated byequipment
ofdifferent age3 orusing different raw materials should be
treated asseveral separate processes for the collection ofcost
da-ua . . ^
The survey will thus result inacatalogue ofpollution control
processes ,with different technical characteristics and/or
different average costs .Itisfor each ofthose processes that
cost data should then becollected .
For each iirccess inthefinal catalogue the survey should deter­
mine theprobable lifetime oftheplant and equipment concerned .
Itshould also determine thefrequency ofu^e andrelative
importance ofeach process within r.heindustry ..
3.'This descriptive phase should befollowed byanassessment phase ,
inwhich a"pollution control relevancy factor 1',i.e. that
proportion oftheoverall costs ofaparticular pollution control
technique which canbeimputed fcotherequirements ofpollution
control ,isexplicitly laid downforeach pollution control
technique identified inthe initial phase .

Thin faotor will inteaat U©2.00% Inoaene when?® the costs
relate toplf-rc /ssserving exclusively f.orpollution control .
Inother cases ,where areduction ofpol3.ut-.ion isachieved
byachange inthemanufacturing process itself ,thefactor
should wherever possible bedetermined after consultation
with the Commission .
k.The cost data forpollution control plants should becollected
insuch ,away that anevaluation ofeach ofthe following cost
categories isavailable separately for each pollution control
technique identified inthetechnical survey :
Inventaient Conta
(i)Expenditure ontheconstruction oracquisition ofplant
andequipment (inaccordance with thedefinitions inthe
European System ofNational Acccmts (ESA)*item P^l),
I
(ii)Expenditure ontheconstruction oracquisition of
buildings (inaccordance with thedefinitions ofESA "
P.kl),
(iii)Expenditure on "theacquisition ofland and/orthemarket
value ofland already Owned ,
(iv)Expenditure onmaintenance (inaccordance with the
definition ofESA ,P4-1). '
Running Costs
(v)Exnenditure onlabour (inaccordance with thedefinitions
of'ESA,B10),
(vi)Expenditure onenergy (inaccordance with thedefinitions
ofELA,P20),
(vii)Expenditure onmaterials other than energy (inaccordance
with thedefinitions ofESA ,P20),
(viii )Expenditure onservices (inaccordance with the
definitions ofESA ,P20),
(ix)Expenditure onrents (inaccordance with the
definitions ofESA ,P20).
*Published bytheOffici\l forOfficial Publications ofthe
European Communities inIS70

;
-3-
Even where deteiled figures arenotavailable Inindustry for
each ofthese cost categories ,they should nevertheless always
beestimated .
The above mentioned data should beexclusive ofvalue~added tax
forthose categories onwhich itispayable and should be
calculated asgross costs before subsidies ofanykind .Theyears
towhich categories (i)-(iii )refer should beidentified ,
whereas categories (iv)-(ix)should refer tocosts incurred
inthepreceding financial year . ,
5.Theabove cost data should beaccompanied bythefollowing
information :
(i)themarket value ofanymaterials recovered asaresult '
oftheoperation ofthepollution control plant in
question ,irrespective ofwhether such materials are
sold orused internally ,
(ii)theexact absolute levels ofeach pollutant -emitted by
therelevant production plant inaspecified time period
both before and after the installation ofthepollution
control plant towhich the costs refer ,
(iii )thear^ual production volume oftheproduction process
towh5.oh thepollution control costs refer .
6.Ifthedata arecollected bymeans ofaquestionnaire addressed
toarepresentative sample ofthe industrial sector ,the
following information should also beobtained :
-the amount ofanypollution charges paid byafirm in
addition to,orinstead of,pollution control measures ,
both before and after installation ofthepollution control
plant inquestion (inaccordance with thedefinitions of
ESA ,E72 ,R66);
-thenature and amount ofanyfinancial aid ,whether inthe
form ofsubsidies ,taxconcessions orpreferential loans
received byindustry inrespect ofthepollution control
installations concerned .
7.Anydata other than theabove which itisdeemed dec-arable to
collect should beexpressed asseparate figures ,without being
incorporated into any ofthe categories defined above .
8.Theprinciples ,definitions andmethods concerned inthis
Part ofthe Annexe should beused inthelight ofthe
comments contained inPart II.

Part IX
Comments on'the "irinciples *Definitior .candMethods contain cd
_ in.PartI ■
Généra t.
Lack ofcomparability can .arise f.rrnumerous reasor.c ,ofv?hxcu
thefollowing arethemost important :different types of
installation maybeincluded under th.3heading ofpollution
control sdifferent ;categories ofcosts caybeincluded inthe
cval\taiio:i aud tlieo© naybedefined h\dit'f erei >.-.-ways ,thetxae
period towhich thedata refer maydiffer from onestudy toanother ,
anddifferent sampling methodologies maybeemployed .Inaddition ,
ouch !cost data remain oflitaited value unless itisclear towhat
extort thopollution' control towhi'.ch they refer hasinfact reduced
pollution levels .
However ,pollution control cci.t studies cznbecarried rutvith
differing aims inview ,requiring thecollection ofmere orlees
detailed figures .Thus itispossible *coobtain va^.idxn:t:or;v,ation
ontheraaoroeconoaic coots toindustry ofexisting nollucion
control legislation without eit.her carrying otn:asurvey ofthe
pollution co.r.trol processes used orusing adetailed breakdown of »-
cost categories .Itwould therefore rotnecessarily beappropriate
forsuch astudy tounethesame methodology asonewhich is
cor.'iirned .with thecosts ofindividual processes inaparticrlar
branch ofindustry .Furthermore ,since ctadier airrirg atr.^araring
theoverall juacroeconcnic effects oxenvironments .!.policy tsy
evaluating pollution control costc ,ingeneral provide catavhxcxi are
oflimited Vcluo inthecontext ofadxffez *en*.iiati .'.>.^,l economy ,
ittherefore does notseem essential atpresent todevellop^a common
methodology forthem .Acommon methodology istherefore pr.-.marxly
retired for tho^e cost studies .vhion pexer topartxeuj-ar ^-ranci^es
ofirduatry .However ,theresults .cfsuch sectoral atuaies canalso
serve aspart ox*thebasis forcaicTlatins themacToecoxioxnic
effects of-pollution control nseeaurss inthesectors concerned .
repo\nt 1
This article defines those measures which aretobeccnx -idered as
pollutioxi control foi*thepurposes oftbi3 recouimexidation .However ,
itisforthetechnical auxvey todetermine 'uhoae cypos ?of
pollution which arc -relevant forthebranch ofindustry concerned
byo.particular st'^dj »

costs incurred "bya "branch ofindustry maydepend ^viUfially
entheparticular .technical processes used Init,which may
vary widely froia ouecountry toanother .Ifthecost drta obtained
ar9tobecomparable ,they siust therefore bebroken do;;n according
totheprocess concerned ,thenumber ofprocesses involved being
determined byatechnical survey ofthebranch ofindustry before
thecost evaluation itself iscarried out .Thepresentation of
separate cost data foreach technical process allows them tobe
u^ed inconjunction with -knowledge ofthefrequency ofoccurrence
ofthese processes intheMember States inana7-.ysJ.ng thereasons '.
underlying thetotal costs incurred inaparticular branch of
industry .
reTioint 3
Where process changes areconcerned ,itwill seldom beeasy to
agree onthemagnitude ofthe ^'pollution ccvi!:rol relevancy factor ".
However ,aslong asthefactor chosen isexplicit inthe cor-t
study itwill always bepossible ,bymeans ofasimple conversion ,
towake theresults comparable with those ofanother study inwhich
thefactor hasbeen given adifferent value .
repoint k
Itisnottobeexpected that cost studies onparticular branches •
ofindustry will always beconducted indifferent Member States
atthe csame time .Thecomparability o.ftheir results will depend
ontheability toadjust them forchanges inprices .,The _
presentation ofseparate data foreach cost category allows the .
uaeofrelevsL .itprice indices toadjust data from different years
toacommon base year .
repoint 5(i)
Since thecost data' collected tireintended torepresent theburden
carried byindustry ,itisnecessary that anyrevenue accruing
asaresult ofpollution control should also beassessed ,sothat
net costs are not overeat isiatod .
repoint 5i.ii)- ■
V/ithout thecareful ,assessment oftheperformance ofbnepollution
control process concerned ,itwould notbepossible toconstruct
acurve linking theaverage cost ofdifferent processes totne
amount ofpollution control they accomplish .

3
repeint 5(iii ) 1
The absolute size ofanindustrial installation isone ofthe most
important detenn3.na.it softheaverage cost ofitspollution control .
Knowledge ofit.istherefore ofgreat importance intheanalysis
ofthe cost fignrea obtained .
re -point 6
When cbvba iscollected byway ofaquestionnaire from a
representative sample ofindustry ,extra information should be
obtained ontransfer payments between industry and thepublic
sector which are specifically rel&ted topollution control .
Inthis way ,the act^io.1 net financial burden carried bythe
industry canbedistinguished from the gross macroeconomic
'burden carried bythe economy ,the two differing bythe amount
ofany net financial transfer .
repoint 7
Irsmany cases those tonductinG ;pollution control cost studies
maywish tocollect supplementary data ,e.g. concerning the
relative import ascaofpollution control costs compared toother
variables ouch astotal investments orturnover ,oronthe invest­
ment plans ofindustry .While such information mayoften ba
useful forcertain purposes *itisnotessential fortheproposes
ofthis recojmicndation ,soits collection should remain optional .