UT (Tax & Chancery) UT/2023/000101 - [2025] UKUT 00072 (TCC)

As for the application of the legislation, when construed as described above, in the light of the evidence, it was common ground that:

However, there was a disagreement between the parties in relation to the extent to which waste needed to be the product of a reaction between calcium compounds and the [ferrous chloride] in order to satisfy the statutory language.

… we have reached the conclusion that the FCC waste does not consist entirely of calcium based reaction waste from titanium dioxide production. Indeed, we think that that conclusion is self-evident, essentially for the reasons given by Mr Puzey and summarised in paragraphs 71 to 89 above.

The FCC Waste was as much, if not more, a product of neutralising the APCR with the ferrous chloride as it was the other way around. The FTT noted the presence of substantial non-reactive material in the APCR and the amount of APCR required to neutralise one tonne of ferrous chloride. Hence, the mere fact that the reactions creating the FCC Waste were primarily with calcium compounds in the APCR did not mean that the resulting waste was entirely a calcium based reaction waste from titanium dioxide production: see [74] and [86].

Between 70% and 90% of the APCR was non-reactive and not all of the reactive compounds in the APCR were calcium based. For example, 11.4% of one sample of APCR consisted of potassium compounds, which were potentially reactive: see [76].

Some 3.9 tonnes of APCR were required to neutralise 1 tonne of ferrous chloride: see [77].

Between 57% and 72% of the FCC Waste did not result from a reaction between alkaline compounds in the APCR and the acidic ferrous chloride. That was before taking into account that not all the alkaline compounds in the APCR were calcium compounds: see [80].

The APCR used to create the FCC Waste could not be compared to the slaked lime slurry used to create the Cristal Waste. 99.4% of the slaked lime which was used to create the slurry was pure calcium hydroxide. This was very different to the impurities and non-calcium compounds in the APCR. Further, the water used to make the slurry was an essential part of the process because the calcium hydroxide had to be diluted for the calcium based chemical reaction to occur: see [83].

The fact that a lower rate for the FCC Waste would be consistent with the principles and aims of the environmental legislation, the waste hierarchy, best available techniques, the consultation process and the Treasury criteria could not override the plain meaning of the statutory provisions. The FCC Waste did not consist entirely of calcium based reaction waste from titanium dioxide production: see [88] and [89].

However, none of the above matters can override the clear language which is used in Section 42(2) of the FA 1996 and the QMO. They can provide some context but they are not a substitute for examining the language actually used and, when one turns to considering whether the FCC waste can be said to “consist entirely of…calcium based reaction waste from titanium dioxide production”, we think that it is self-evident that it does not. As Mr Puzey succinctly pointed out, more than half of the FCC waste was neither reaction waste nor derived from titanium dioxide production. It is therefore clear that the FCC waste does not consist entirely of calcium-based reaction waste from titanium dioxide production.

We agree with Mr Puzey that:

mean that, although the process at FCC Knostrop undoubtedly included a reaction between the calcium hydroxide (and certain other calcium based reactive compounds) within the APCRs and the [ferrous chloride], somewhere between 57% and 72% of the FCC waste consisted of material which was not the result of a calcium based reaction at all. To a very significant extent, the FCC waste simply consisted of elements which were part of the APCRs and which did not react with the [ferrous chloride].

We also agree with Mr Puzey that the process which took place at FCC Knostrop is more accurately described as the neutralisation of the APCRs using [ferrous chloride] than the neutralisation of the [ferrous chloride] using APCRs. The Second Appellant recognised this in:

As Mr Martin readily admitted at the hearing, the “Ash” referred to in each of those contexts was the APCRs and not the [ferrous chloride]. Thus, those references all support the conclusion that the process which was going on at FCC Knostrop is more properly described as the treatment of the APCRs with [ferrous chloride] than as the treatment of the [ferrous chloride] with APCRs and that the majority of the FCC waste was simply the treated APCRs waste and not the treated [ferrous chloride] waste derived from the production of titanium dioxide.

We should make it clear that we do not base our conclusion on the mere fact that the process at FCC Knostrop happened to involve the neutralisation of the APCRs at the same time as the [ferrous chloride] was neutralised. We recognise that that is no different from the fact that the process at Stallingborough involves the neutralisation of the virgin calcium hydroxide slurry at the same time as the [ferrous chloride] is neutralised. Instead, our conclusion is based on:

For the reasons set out above, notwithstanding the principles of statutory construction which we were urged by Mr Nawbatt to apply, we cannot see how the FCC waste can properly be said to satisfy the statutory language. Quite simply, the FCC waste did not consist entirely of calcium based reaction waste from titanium dioxide production and the fact that the use of APCRs instead of slaked lime to neutralise the [ferrous chloride] may fit better with the UK environmental legislation, may be consistent with the process of consultation leading to the enactment of the QMO and may be consistent with the Treasury criteria is not sufficient to make it so.

In our view, the starting point in determining whether or not a particular waste product consists entirely of calcium based reaction waste from titanium dioxide production is not to ask whether all of that waste product is the result of a reaction between alkaline calcium compounds and the acid arising from titanium dioxide production. Instead, one should instead consider whether the essence of the process by which the relevant waste product has been produced involves a reaction between alkaline calcium compounds and the acid arising from titanium dioxide production. As long as the latter is the case, then the waste product resulting from the process in question consists entirely of calcium based reaction waste from titanium dioxide production. Moreover, that is the case regardless of whether:

Applying that test in the present case, it is plain that the essence of the process which takes place at Stallingborough is exactly as described in paragraph 129 above. In other words, the only purpose of the process is to neutralise the [ferrous chloride] that has arisen from titanium dioxide production. That remains the case despite the fact that:

The Cristal waste displays both of the features described in paragraphs 130(1) and 130(2) above because:

However, the crucial point is that those impurities are simply unavoidable features of the calcium based reaction which is the essence of the process giving rise to the Cristal waste or, to put it another way, unavoidable features of the alkaline which is required to be applied in order to achieve the end objective of neutralising the [ferrous chloride] with calcium hydroxide. They do not change that end objective and thus they do not change the essence of the process which is occurring at the site. Instead, that essence remains the neutralisation of the [ferrous chloride] arising from titanium dioxide production by way of a reaction between a reactive alkaline which is calcium-based and that [ferrous chloride].

We say that because:

The fact that those impurities are simply unavoidable features of the process leading to the end objective of neutralising the [ferrous chloride] arising from titanium dioxide production with a reactive alkaline solution that is largely calcium based and are not there for any other reason means they do not change the essence of the process, which is to do just that. Moreover, prior to its dilution in the water, at least 90%, and very likely a considerably greater percentage, of the slaked lime consists of pure calcium hydroxide. (We agree with Mr Puzey’s observation that the 90% figure is likely to be a very conservative estimate as the supplier of the slaked lime, the First Appellant, was effectively warranting that the calcium hydroxide content of the slaked lime would not be below the cited figure.)

So, when one asks whether the Cristal waste can accurately be described as consisting entirely of a calcium based reaction waste from titanium dioxide production, the answer is demonstrably that it is.

The same cannot be said of the FCC waste. On the contrary, as we have said in paragraph 123 above, the essence of the process giving rise to the FCC waste was the neutralisation of the APCRs using the FC. In addition:

Thus, whilst a calcium based reaction did occur in the course of the process which led to the FCC waste, it would be a misnomer to describe that calcium based reaction as amounting to the essence of the process. Consequently, the waste which arose as a result of the process did not consist entirely of a calcium based reaction waste from titanium dioxide production and the Cristal waste is readily distinguishable from the FCC waste.

It may be seen from the above that we emphatically reject the proposition that, because:

the Cristal waste and the FCC waste must inevitably stand or fall together when it comes to determining whether or not they come within the ambit of Note (9)(a). The percentage of calcium hydroxide which is in the virgin calcium hydroxide slurry at Stallingborough is simply the result of the need to dilute the slaked lime appropriately so that the calcium based reaction which occurs in the process at Stallingborough neutralises the [ferrous chloride] from the titanium dioxide production without giving rise to a waste which is itself hazardous by virtue of its alkalinity. In contrast, the percentage of calcium hydroxide which is in the APCRs at FCC Knostrop was a function of the substantial other material of which the APCRs consisted, whose presence in the APCRs had nothing whatsoever to do with the calcium based reaction which occurred at FCC Knostrop.