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)	2018			2017			2016
Total at January 1	$	46.1		$	39.5		$	37.7
Charge for the period		6.8			5.9			4.7
Measurement period adjustment on acquisition		0.0			2.8			0.0
Utilized in the period		(3.1	)		(2.4	)		(2.7	)
Exchange effect		(0.3	)		0.3			(0.2	)

Total at December 31		49.5			46.1			39.5
Due within one year		(5.9	)		(5.2	)		(6.7	)

Due after one year	$	43.6		$	40.9		$	32.8

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 2018 represents the accretion expense recognized of $4.0 million and a further $2.8 million primarily in respect of changes in the expected cost and scope of future remediation activities.

In 2017, we recognized $2.8 million of asset retirement obligations, in relation to the acquisition of our European Performance Chemicals business, as an increase in the value of the tangible assets acquired. This is being 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.

Remediation expenditure utilized provisions of $3.1 million, $2.4 million and $2.7 million in 2018, 2017 and 2016, respectively.