EPA Approved On Demand Bond

What is an EPA Approved On-Demand Bond?

The EPA’s guidance on financial provision for environmental liabilities, published in August 2015, identifies the prevention and remediation of environmental damage and pollution from incidents and the closure of agency-licensed facilities as one of its key strategic priorities.

In line with this, the EPA requires a financial provision for:

• The fulfilment of legal obligations and maintenance of relevant licenses, this often applies to waste treatment facilities, landfill sites and trans-shipments of waste.
• The cost of implementing a closure, restoration and aftercare management plan of a licensed facility
• The prevention or remediation of environment damage at a contaminated facility
• The potential decommissioning costs in the energy industries, including oil & gas and renewables.

Additionally, restoration bonds may be needed to secure the cost of returning land to its original state after completion of mining or quarrying activities.

The EPA are willing to accept this financial provision in a number of forms on the premise that it is secure, sufficient, available when required and it is at the sole discretion of the EPA as to the extent of the provision.

The following financial instruments are deemed acceptable by the EPA for all liabilities:

• Secured funds – Funds lodged in a bank account accessible to the EPA. This option has a costly impact on working capital and cash flow.
• Charge of property – A mortgage or charge over specific property in favour of the EPA. The conditions for this option however are stringent, particularly around valuations.
• On-demand performance bonds – A financial instruments or bonds issued by a financial institution acceptable to the EPA. As the contractor you can hold onto your cash – saving you money and providing cash flow benefits.

 For more information please see guidance on financial provision for environmental liabilities.

Who requires an EPA approved performance bond?

• Waste treatment and recycling plants
• Waste management companies (dumping at sea activities, waste water discharges)
• Trans-frontier shipment of waste stations
• Large scale industrial companies including; pharmaceutical companies, cement manufacturers, power plants, large petrol storage facilities
• Oil and gas production companies
• Renewable energy companies
• Mining companies
• Quarries
• Logistics companies

Who is the beneficiary of an EPA approved performance bond?

• Environmental protection agency (EPA)
• The state

Our team of surety specialists at Howden are experienced in the facilitation and management of EPA approved on-demand performance bonds. It is our experience and expertise in this field that will ensure the right surety solution for your required provision.