Impacts of the sale of house coal and the most polluting manufactured solid fuels: report

4. Conclusions / findings

The main findings of the air quality assessment were that:

• Modelled domestic combustion contributed a relatively small amount (an average of 0.07%) to total PM_2.5 concentrations in the Option 1 (baseline).
• Option 2 had a limited effect overall on the reduction of PM_2.5 concentrations. There was a higher reduction in urban areas than rural, as there is higher use of wet wood in urban areas. The maximum reduction of 0.0013 µg m^-3 for Option 2 was in Aberdeen; this reduction is 0.02% of total PM_2.5 concentrations and 0.3% of modelled domestic combustion concentrations in this location.
• Option 3 had a larger impact on reducing PM_2.5 concentrations than Option 2. The highest reductions were in rural areas, where there is a higher prevalence of house coal use. The maximum reduction of 0.020 µg m^-3 for Option 3 was in Fort William; this reduction is 0.5% of total PM_2.5 concentrations and 15% of modelled domestic combustion in this location.

LSOA-average PM_2.5 concentrations showed similar trends to the overall air quality results:

• Overall, PM_2.5 concentrations are lower in rural areas than in more populated areas in the central belt and east coast. Differences between total concentrations between the Option 1 (baseline) and Options 2 and 3 are small.
• There is a limited decrease in average concentrations in most LSOAs for Option 2. The largest decreases (0.001 μg.m^-3) are in urban areas, e.g., in central parts of Aberdeen and Edinburgh.
• There is a larger reduction in concentrations in Option 3 than in Option 2 for many LSOAs, particularly in rural areas. The largest reductions (0.02 μg.m^-3) are seen in LSOAs in remote towns, e.g., Fort William and Kirkwall.

We have assessed PM impacts using a more detailed dispersion modelling and impact pathway approach compared with the Defra 2019 impact assessment, and as such the specific situation in Scotland is reflected: namely, given the use of solid fuels is highest amongst households in rural areas, there is also therefore low background concentrations of PM and low population densities in areas with the biggest impacts (i.e. reductions in air pollution). As such the associated reduction in exposure, and health improvements, are potentially smaller.

The cost-benefit analysis found that Option 2 results in a positive NPV, with the benefits of the air quality improvements and greenhouse gas emissions brought by the small shift in usage (from wet wood to dry wood, and from coal to manufactured solid fuels) outweighing the increased fuel costs and implementation costs of the policy (Table 4‑1). For Option 3, the proposed ban of coal and limit on sulphur in smokeless fuels, the CBA findings depended on the fuel prices used for the analysis. When using price data from the 2019 Defra impact assessment, costs outweigh the benefits for the policy, driven largely by the increased fuel costs from coal being cheaper than manufactured solid fuels, which are not outweighed by the health and greenhouse gas emissions benefits (£293 per tonne of coal vs. £358-406 per tonne for smokeless fuels in 2019). Through the targeted interviews conducted as part of this study, stakeholders have indicated that the prices of these fuels have converged in recent years. As such, we also modelled the policy options with equivalent prices for coal and smokeless fuels, and this found a positive NPV of £7,123,600 for Option 3. This highlights the strong sensitivity of the overall NPV result to the fuel price assumptions used. Given this data was provided by the industry stakeholders as part of the study, this could be considered a more up-to-date assessment of the impacts. Certain additional benefits have also not been monetised under such as additional benefits from SO₂ brought by the 2% sulphur limit on manufactured solid fuels, and additional health benefits brought by reductions in indoor air pollution.

Based on data gathered from industry stakeholders, impacts on businesses are expected to be small. Suppliers already sell alternative fuels and there is no difference in profit margins between banned and alternative fuels. Impacts on consumers will depend on fuel prices as availability and number of suppliers will remain constant.

The analysis has therefore found that Option 2 is a policy that brings benefits in health and greenhouse gas emissions that exceed the costs. Policy Option 3 results in health benefits of £1.8m over the appraisal period and greenhouse gas emissions benefits of £1.3m. Using fuel price data from the 2019 Defra impact assessment, fuel costs are found to increase and exceed the benefits of the scenario as a whole. However, using more up to date price data from stakeholders, a large overall benefit is brought by the policy when considering the greenhouse gas emissions benefits, air quality health benefits, and the fuel efficiency savings brought by the higher efficiency alternative fuels.