Last month I reported the plight of Ross Donovan, the engineer who has developed a heating system fuelled by the used cardboard packaging that businesses generate in such quantities. More than £300,000 was put into proving its effectiveness, and at every step Mr Donovan consulted the Environment Agency to ensure that it complied fully with EC rules on waste and incineration.

Then at the last minute the agency took another look at the legislation and ruled that Mr Donovan's cardboard was not an "energy source" after all, but "waste", and he would have to fit his furnaces with costly monitoring equipment which would make them unviable. Yet the same fuel obtained directly from a packaging manufacturer would not be "waste", and the rules would not apply.

When Mr Donovan was taken by his MP, Alistair Burt, to see Elliott Morley, the environment minister, he was told that the officials would reconsider their disastrous ruling. He told the minister that he only had until the end of February, when his backers would pull out. Mr Morley did not respond by the deadline, and the investors last week pulled the plug on a project which would be warmly welcomed in almost any other EU country.
 

An extraordinary blunder by the environment minister Elliott Morley has come to light which, thanks to his misreading of EC law, could cost this country hundreds of millions of pounds a year. At a meeting last January, Mr Morley endorsed a ruling by his officials which consigned to the scrapheap an invention by a Bedfordshire engineer, Ross Donovan, which could have provided an ingenious solution to part of Britain's ever-growing waste problem -- by using surplus cardboard as fuel to provide cheap heating for tens of thousands of businesses.

As a result, Mr Donovan's backers pulled out, his company went into liquidation and he is unemployed. But it now emerges that Mr Morley and his advisers were wrong. They had overlooked a fundamental change in the interpretation of EC law which could have made Mr Donovan's "waste into energy" system perfectly viable, and potentially a huge commercial success.

In February I reported how Mr Donovan had spent seven years developing a way in which the vast quantities of cardboard thrown away each year to be placed in landfill sites could instead be baled and used to fuel a highly efficient, low-cost, environmentally-friendly heating system. At every stage he consulted the Environment Agency to ensure that his system complied with EC law, and he was so confident of its success that he sank all his savings into the project, remortgaged his house and raised £250,000 from commercial backers.

Only at the last moment, when two prototypes of his system were already proving that they could save businesses thousands of pounds a year in heating bills, did the agency suddenly change its tune. Its officials ruled that Mr Donovan's devices must comply with complex EC waste incineration regulations, making his heating system so costly that it would no longer be viable.

In January Mr Morley met Mr Donovan and his MP, Alistair Burt. But he has still failed to explain, despite repeated requests, why his officials maintained for so long that Mr Donovan's system was not covered by the incinerator directive, before they suddenly and disastrously changed their mind.

Last month, however, a senior agency official, Keith Brierley, told the magazine New Civil Engineer that the European Court of Justice had ruled that a material "which is a net contributor of energy and is largely consumed by the burning process" should no longer be considered as "waste" but as "fuel". This is precisely what Mr Donovan had argued in his meeting with Mr Morley last January.

In fact the relevant ECJ rulings, which make it quite clear that Mr Donovan's system should be excluded from the directive, were issued in 2003, months before Mr Morley and his officials were advising otherwise. There should never have been any obstacle to the system being manufactured, and there is scarcely an industrial estate in the country to which it would not be a godsend.

As it happens, Mr Donovan was married last Monday, to a woman who stood by him as his promising scheme turned into a horrendous personal nightmare. The finest wedding present Mr Morley could give the couple would be to admit that he was wrong, and to make every effort to ensure that Mr Donovan's invention goes into production -- to the benefit of countless businesses, and Britain as a whole.