Note 12. Plant Closure Provisions

The principal site giving rise to environmental remediation liabilities is the manufacturing site at Ellesmere Port in the United Kingdom, which management believes is the last ongoing manufacturer of TEL. There are also environmental remediation liabilities on a much smaller scale in respect of our other manufacturing sites in the U.S. and Europe. The liability for estimated closure costs of Innospec’s manufacturing facilities includes costs for decontamination and environmental remediation activities (“remediation”) when demand for TEL diminishes.

Movements in the provisions are summarized as follows:


(in millions)	2017			2016			2015
Total at January 1	$	39.5		$	37.7		$	34.1
Charge for the period		5.9			4.7			6.8
Measurement period adjustment		2.8			0.0			0.0
Utilized in the period		(2.4	)		(2.7	)		(2.6	)
Disposal in the period		0.0			0.0			(0.3	)
Exchange effect		0.3			(0.2	)		(0.3	)

Total at December 31		46.1			39.5			37.7
Due within one year		(5.2	)		(6.7	)		(6.4	)

Due after one year	$	40.9		$	32.8		$	31.3

Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date. Remediation costs are recognized in cost of goods sold.

The provisions for remediation represent the Company’s liability for environmental liabilities and asset retirement obligations. The charge for the period in 2017 represents the accretion expense recognized of $3.5 million and a further $2.4 million primarily in respect of changes in the expected cost and scope of future remediation activities. A discount rate of 8.92% was used in valuing the remediation provision.

Following the Huntsman acquisition, we have recognized $2.8 million of asset retirement obligations as an increase in the value of the tangible assets acquired, which will be depreciated over the remaining useful economic life of those assets.

We recognize environmental liabilities when they are probable and costs can be reasonably estimated, and asset retirement obligations when there is a legal obligation and costs can be reasonably estimated. The Company has to anticipate the program of work required and the associated future expected costs, and comply with environmental legislation in the countries in which it operates or has operated in. The Company views the costs of vacating our Ellesmere Port site as contingent upon if and when it vacates the site because there is no present intention to do so.

Remediation expenditure utilized provisions of $2.4 million, $2.7 million and $2.6 million in 2017, 2016 and 2015, respectively.