Overview of costs and benefits associated with regulation in Scottish agriculture

Research providing an overview of the regulations in Scottish agriculture and exploring 12 case studies in further detail.

7. Statutory Instrument 1989 No. 1263 The Sludge (Use in Agriculture) Regulations 1989


The Sludge (Use in Agriculture) Regulations 1989 and The Sludge (Use in Agriculture) (Amendment) Regulations 1990 establish maximum annual applications for metals contained in sludge and set maximum permitted metal concentrations in agricultural soil treated with sludge. They implement the EU Sludge Directive (86/278/ EEC) ( OJ No. L181/6). The European Union regulates use of sewage sludge in agriculture to prevent harmful effects on soil, vegetation, animals and humans.

At present there are statutory regulations, non-statutory codes of practice and a voluntary agreement (i.e. the safe sludge matrix) governing the application of sewage sludge to agricultural land. The water industry, food industry and other major stakeholders are pressing for the standards to be made statutory in order to increase confidence and to allow them to be brought within the enforcement regime operated by SEPA. Making the standards statutory would also reduce the risk of having to use other, more expensive, and potentially less environmentally sustainable disposal systems (e.g. incineration and landfill). Importantly for farmers in the current environment of rising fertiliser prices, sewage sludge represents a cheap alternative source of phosphorus, potash and nitrogen. Sewage sludge also improves soil structure.


In 2006 nearly one billion litres of wastewater was treated daily, this would produce approximately 150,000 tonnes of sewage sludge annually. It is estimated that there will be a 17 per cent increase in the amount of sewage sludge produced in Scotland over the next 20 years due to tightening waste water treatment standards. Currently, significant outlets for sludge include recycling to agricultural and non-agricultural land, and the co-firing of sludge pellets with coal for electricity. 23 per cent (33,773t dry solids) of recycled treated sludge was used on agricultural land in 2005. Less than 1 percent (2002) of Scotland's land has sludge applied

Agricultural benefits

Sewage sludge can provide a significant proportion of the fertiliser requirements for industrial crops such as oilseed rape, the preferred crop source for biodiesel. The high nutrient and organic matter content of sludge, when applied to agricultural land in suitable concentrations, is known to improve soil structure, drainage and available water capacity.

However, application under unsuitable conditions or at inappropriate rates can give rise to pollution and contamination of soil, water or air. Although there are a number of science-based procedures and controls in place, concern remains around this practice. The main public concerns are odour, and the perceived risks to human health of raw sludge

All applications of imported wastes spread on farmland should be included in the calculations within the Manure Management Plan (Farm Waste Management Plan). This is mandatory for Fertiliser and Manure Plans in Nitrate Vulnerable Zones.

Regulation of sewage sludge

Use of sewage sludge on farmland is controlled by the Sludge (Use in Agriculture) Regulations 1989 (as amended), which control the build-up of potentially toxic elements in soil and restrict the planting, grazing and harvesting of certain crops following the application of sludge.

Sludge producers (in Scotland this generally means Scottish Water or their contractors) are required to analyse field soils and sludge prior to application, and to maintain detailed records of applications of all sludge to farmland. However, it is the farmer, rather than the sludge producer who is ultimately responsible for complying with the regulations in terms of crop planting and harvesting following sludge application.

Further guidance and requirements are given in the UK-wide Code of Practice for Agricultural Use of Sewage Sludge, the code of good practice for the prevention of environmental pollution from agricultural activity ( PEPFFA code), and also in the safe sludge matrix (an agreement between the UK water industry and the British Retail Consortium on sludge use).

Proposal to revise the regulations

In 1998 the UK Government announced its intention to revise the regulations to provide further safeguards against the transfer of pathogens from sewage sludge to the food chain. The Scottish Executive and DEFRA consulted on changes to the regulation of the use of sludge in agriculture in 2002.

The Scottish Government is considering revising the 1989 regulations, so that the higher standards currently set out by the safe sludge matrix are given statutory force. Amongst other things, the matrix does not allow raw or untreated sewage sludge to be used on agricultural land for food production.

The revised regulations are designed to address concerns about the potential risks from pathogens to human and animal health when recycling sewage sludge on agricultural land. This would be achieved by strengthening the treatment requirements for sewage sludge processes to ensure that potential pathogens cannot be transmitted into the food chain by using sewage sludge to fertilise land used for food crops. A qualitative assessment of the risks associated with land application of wastes, including sewage sludge was carried out in 1998 and the recommendations for revising the regulations were based on this assessment.

The revised regulations go beyond the requirements of the EU directive in that they define sludge treatment standards. These standards were agreed by major stakeholders and the extra costs were accounted for in Scottish Water's quality and standards strategic review 2002 - 2006.

Regulations have not been made as yet, partly because the consultation showed that the voluntary agreement was being respected. In the meantime, the matrix is being observed voluntarily. Scottish Water is in favour of strengthening the statutory requirements, however SEPA would accrue enforcement costs and Scottish Water is unable to pay under the current regulatory funding mechanism.

Members of the food industry and other major stakeholders are also pressing for the standards to be made statutory in order to increase confidence and to allow them to be brought within the enforcement regime operated by SEPA.

Other legislation

There are a number of other significant pieces of Scottish and European legislation with relevance to sludge management. Legislation often addresses organic wastes as a whole, in such a way as to include sewage sludge. The Waste Management Licensing Amendment (Scotland) Regulations 2003 tightened up the use of sludge on agricultural land and in land restoration. The Waste Management Licensing Amendment (Scotland) Regulations 2004 relate to the use of organic wastes, including sewage sludge, on non-agricultural crops such as forestry.

SEPA has used its powers under the 2003 and 2004 regulations to restrict the tonnage of sewage sludge allowed to be spread on non-agricultural crops (primarily forestry), or for land restoration to an ordinary maximum application rate of about 400 tonnes per hectare. This figure represents a considerable reduction on volumes which, in the past, may have been thousands of tonnes per hectare.


Effectiveness of the regulation

The regulation appears to be working effectively, however by making current industry standards statutory enforcement could be improved if necessary. It may also help improve the confidence of stakeholders that the sewage sludge, when used according to the regulations and standards, is safe for humans, plants, animals and the environment.

As there are a number of other significant pieces of Scottish and European legislation with relevance to sludge management, the effectiveness of this regulation can be complemented by changes in other pieces of legislation.

Financial Implications

The Scottish RIA completed in 2002 set out the costs and benefits of maintaining the current system, revising the code of practise, or revising the regulations.


The suggested revisions to the regulations would impose more stringent requirements on Scottish Water. However, Scottish Water is committed to the matrix and the additional costs have already been allowed for in the quality and standards period 2002-2006. The agreed recurring costs associated with revised regulations are estimated to be £2m per year. This is a least cost option when compared with the costs of alternative disposal methods. The initial capital investment in improved treatment for Scottish Water is estimated at £14m.

There would be an additional cost to owners of a septic tank, mostly in rural areas, as the spreading of untreated sludge would be banned. The cost of treatment is estimated to be fairly low at £10 on average. The total extra cost of disposal of septic tank sludge in Scotland was estimated in the RIA (2002) to be £0.2m per year.

Farmers would also have to comply with any changes to the regulation including grazing and cropping restrictions. As less than 1 percent (2002) of Scotland's land has sludge recycled in this way applied, the effects of any change are targeted.

The cost to enforce existing regulations was estimated at £14,000 per year. A tighter regulatory system will lead to increased enforcement costs. However, the suggested changes allow SEPA to recover these costs and they may be passed on to sludge producers.

Total costs for maintaining and revising the regulations (2002)


Estimated recurring costs

Estimated non-recurring costs

Current regulations maintained as is

Public confidence holds



Sludge to agriculture unacceptable

Incineration £16m

Landfill £7m

£0.6m per (for inorganic fertilisers)

Landfill £0

Incineration £46m

Revise the regulations

(most likely to maintain public confidence)

£2m Scottish water

£10 per farmer

£10 per septic tank de-sludging

Scottish water £14m

Figures are approximate

The recurring cost to Scottish water is approximately 0.2 per cent of 2002 income

Source: Revision of the sludge (use in agriculture) regulations 1989, Scotland, RIA


The RIA does not quantify the benefits of the current regulation. The benefits of revising the regulations however include increased security that costs of finding alternative disposal methods would be avoided. The benefit of avoiding incinerating sewage sludge in Scotland is was valued at £1.33m per year at 2006 prices in the Environmental Accounts for Agriculture report of April 2008.

Use of sewage sludge on agricultural land is preferred according to the criteria in the national waste strategy. Although difficult to quantify, there are economic and environmental benefits from recycling sewage sludge to agricultural land. The resulting improvement in fertility, structure, workability, water holding capacity and yield have been established. In the current climate of increasing input costs, alternatives to bagged fertiliser are becoming increasingly attractive. Recent reporting from England suggests that growers benefited from about £450/ha worth of nutrients in years one and two. Typical figures for nutrients required were given as 35kg nitrogen, 100kg phosphate, 7kg potash, 30kg SO3 and 12kg magnesium a hectare in year one 20.

The Environmental Accounts for Agriculture report (2008) introduced a valuation of agricultures waste sink services for sewage sludge as a positive flow estimated to be worth around £35m.

The proposals for revision would not result in significant change in farm working practices. While they would allow enforcement measures to be taken if necessary, the key benefit is intended to be the confidence of farmers, the food industry and the public in the recycling of sewage sludge to agricultural land.

Should this outlet become unsustainable, water treatment companies would face significantly increased costs in establishing alternative disposal systems (landfill, incineration) for the major proportion of their sludge.

The main costs of the Sludge (Use in Agriculture) Regulations 1989 21


Scale of cost


On farm records





Reduced waste disposal to agricultural land


The main benefits of the Sludge (Use in Agriculture) Regulations 1989


Scale of benefit


Low cost alternative nutrient source



Avoiding alternative disposal - cost


Avoiding alternative disposal - environmental impact


Industry views

The changes suggested in the 2002 RIA were discussed extensively with both the water and food industries, who were generally content with the proposals. Public consultation on the proposal to make the matrix compulsory was also carried out. As this work was undertaken around the time for the Foot and Mouth outbreak, farmers were not consulted directly.

As part of the consultation, NFU Scotland noted that it was conscious of the importance of commercial interests in determining the future of sludge spreading and did not take a definite view on the proposals.

There are reportedly ongoing problems with some grain merchants specifying that sewage sludge not be applied on malting crop paddocks. From a marketing perspective, the whiskey industry are concerned about problems with consumer perception if sludge is applied. NFUS are continuing to meet with members of the whiskey industry to talk through the issues and note that more research has been done since the whiskey industry's initial views were expressed. While some claim that the malting industry might reconsider its stance on using the product within the rotation, the NFU and NFUS is less convinced, believing that there is still a long way to go to settle the issue with certain supply chains. While legislating the matrix might allay some concerns and lead to a change in approach, a bigger driver might prove to be the changing economics of grain production. If distillers wish to source more grain in order to increase production, they may need to relax their current specifications to allow farmers to use sludge as a cheap alternative to bagged fertilisers.

The Scottish Landowners' Federation and Highland Council were pleased about the relatively small impact there would be on farmers.

The Tenant Farmers Association of Scotland ( STFA) noted that the regulation applies to the contractors used to spread such materials, who appear well-versed in the regulations.

Spreading sewage sludge on agricultural land is supported by the Scottish Executive, SEPA, European Commission, Royal Society for the Protection of Birds ( RSPB), the Soil Association, and Surfers Against Sewage. SEPA noted that most studies on this matter have concluded that gold-plating is not a feature of regulation in this area.

Ability of the Scottish Government to influence

The current regulations implement the EC directive, and go further in terms of industry best practice guidelines and standards. The European Commission had proposed to revise the Directive in 2007 with a view to tightening the quality standards under which sludge is allowed to be used in agriculture. Any changes that are proposed would need to be reflected in Scottish legislation as appropriate. Currently however, some members of the industry are pushing for greater regulation in terms of making current standards statutory.


1. Does the regulation originate from an EU Directive?

  1. Yes - EU Sludge Directive (86/278/ EEC)

2. Has a Scottish RIA been completed?

  1. Yes - an RIA was completed in 2002 looking at revising the amended 1989 regulations.

    1. Are the benefits adequately quantified?
    2. The benefits have not been quantified. Further work may be possible in this area if necessary. The benefits include economic, social and environmental aspects. For farmers, cost savings in using sewage sludge is the key benefit.

    3. Are the administrative costs adequately quantified?
    4. Yes, however, during consultation, some commented that the regulatory costs to SEPA would be higher than the £14,000 stated in the draft.

    5. Are the policy costs adequately quantified?

    Yes. There is a relatively small impact on farmers, and it was generally felt that Scottish Water should bear most of the costs.

3. What are the problems with the regulation?

  1. Currently industry is operating under best practice guidelines that, if made statutory, could improve the confidence of those along the supply chain that the practice of applying sewage sludge to agricultural land is safe, economical, environmentally sustainable and effectively enforced.

4. What is the overall balance - cost or benefit?

  1. Benefits of the regulation are significant in terms of allowing confidence that the application of sewage sludge is safe and environmentally sustainable. Giving more weight to current industry codes would enhance the level of confidence associated with this regulation and its enforcement. Although there would be significant costs for Scottish Water, costs associated with a shift to alternative disposal methods are much higher. The regulations also allow farmers to utilise a cheap alternative form of nutrients.

5. Suggestions for improvements

  1. As set out above, an RIA looking at revising the 1989 regulation was completed in 2002. However, at this point in time there are no urgent problems to be remedied and thus it is more a question of priority in the legislative timetable.

    The European Commission (2005b) had proposed to revise the Directive in 2007 with a view to tightening the quality standards under which sludge is allowed to be used in agriculture. Developments will need to be followed to ensure consistency with the Scottish regulations and current industry practice where possible.

6. Does it meet the Better Regulation guidelines?

Transparency: High. The information provided as to what is and isn't allowed is clear and easy to follow (eg, the concise version of the PEPFAA code - the dos and don'ts guide - set out easy to understand practical guidance). Should the regulations be revised, SEPA would need to issue guidelines to officers and arrange suitable training.

Accountability: High. The regulations, which implement the EU Sludge Directive (86/278/ EEC), are enforced by the Scottish SEPA. It is the farmer, rather than the sludge producer who is ultimately responsible for complying with the regulations in terms of crop planting and harvesting following sludge application. However responsibility rests with the producer for compliance with the sludge regulations in regard to the analytical testing of the sludge and soil. Farmers should not allow spreading without this having been done.

Proportionality: High. The measures adequately reflect the importance of ensuring that the practice is carried out in a way that is not detrimental to the environment or human, plant or animal health. The regulations and other relevant guidance appear to be well accepted by the farming community and the majority of other stakeholders. Industry is pushing for revised regulations even though they go beyond the requirements of the EU directive in that they, amongst other things, define sludge treatment standards.

Consistency: High. The regulation provides clear guidelines for the use of sewage sludge that are consistent for all users.

Targeted: High. As less than 1 percent (2002) of Scotland's land has sludge recycled in this way applied, the effects of any change are targeted towards those directly affected.


The Sludge (Use in Agriculture) Regulations 1989

EU Sludge Directive (86/278/ EEC) ( OJ No. L181/6)

Environmental Accounts for Agriculture report of April 2008 (Jacobs and SAC)

Sewage Sludge, EC

Sludge from wastewater works

Alasdair Reid, 2006

Safer Sludge - The Scottish Executive's consultation paper on proposals to amend the statutory controls & UK Code of Practice for the agricultural use of sewage sludge

Scottish Executive Environment Group, 2002

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