Environment | UK Regulatory Outlook April 2025
Published on 29th April 2025
Environment Agency consultation on charging sewerage undertakers for enforcement | Joint consultation on reforms to the Environmental Permitting Regime | Government reports on consultation outcome on phasing out sale of diesel cars from 2030
Environment Agency consultation on charging sewerage undertakers for enforcement
The Environment Agency (EA) has published a consultation on 14 April 2025, proposing a new annual levy on certain water discharge activities carried out by water companies that are sewerage undertakers. This levy is designed to fully recover the EA's enforcement costs as authorised by the Water (Special Measures) Act 2025.
Key points of the consultation include:
Introducing an annual levy calculated based on the number, type and volume of environmental permits for operating sewage discharge activities. This levy is in addition to existing annual environmental permit charges.
The levy will support an enhanced regulatory approach based on the EA's existing functions and duties. The EA will review the levy when additional enforcement powers, such as automatic penalties, commence in April 2026.
The levy will be updated annually in line with the consumer price index (CPI).
The consultation closes on 26 May 2025, with the new charging scheme proposed to be implemented in summer 2025.
For further information, the consultation can be accessed here.
Joint consultation on reforms to the Environmental Permitting Regime
On 8 April 2025, the Department for Environment, Food and Rural Affairs (Defra), the Environment Agency, the Welsh government, and Natural Resources Wales (NRW) published a joint consultation on proposed reforms to the Environmental Permitting (EP) regime. These reforms are part of the UK government's March 2025 Regulatory Action Plan aimed at ensuring regulators and regulations support growth.
Key proposals include:
- Simplifying the creation, amendment and removal of EP exemptions for four classes of activities: flood risk activities, waste operations, water discharge activities and groundwater activities.
Granting the EA and NRW new powers and greater flexibility to designate regulated facilities as exempt, specify or modify their conditions, or remove exempt status.
Ensuring the new powers are used:
In accordance with the objectives and criteria for the particular class of activity.
To exempt facilities assessed as posing a lower risk to the environment and human health.
Subject to public consultation, except for minor administrative changes, and under the general oversight of government ministers.
The consultation will close on 3 June 2025. The government hopes that the proposals will simplify and speed up the process for the lead regulators to create, amend and remove types of exempt facilities and activities which are not required to hold an environmental permit.
For further information, the consultation can be accessed here.
Government reports on consultation outcome on phasing out sale of diesel cars from 2030
Between 24 December 2024 and 18 February 2025, the government consulted on its commitment to phase out pure petrol and diesel cars by 2030 and support the UK's transition to zero emission vehicles (ZEVs).
Individuals, vehicle manufacturers, local authorities, NGOs, political parties, trade associations and other bodies responded to a series of questions which focused on two main areas: the phasing out of internal combustion engine (ICE) cars and the ZEV mandate which will be delivered through the Vehicle Emissions Trading Scheme.
Following the consultation the government has confirmed:
- A commitment to end the sale of new purely ICE cars by 2030; all new cars and vans must be zero emission by 2035.
Permission to sell hybrid electric vehicles and plug-in hybrid vehicles post-2030.
Permission to sell new non-zero emission vans until 2035.
A non-ZEV fleet-wide average CO2 cap for vans post-2030.
Exemptions for micro vehicle manufacturers, small vehicle manufacturers, special purpose and kit vehicles from the 2030 ICE car sale ban.
Flexibilities to support manufacturers in transition while maintaining ZEV targets, such as an extension of the borrowing mechanism to 2029, with new caps for 2027-2029.
Further detailed information on outcomes of the consultation can be found here.
Government consultation on marine recovery fund for offshore wind development
On 31 March 2025, Defra published a consultation on the Marine Recovery Fund (MRF) for England, Wales, and Northern Ireland. This consultation outlines how the MRF will function to compensate for the adverse effects of offshore wind developments on Marine Protected Areas (MPAs).
Key points of the consultation include:
- The MRF aims to deliver industry-funded, strategic measures to mitigate the impacts of offshore wind developments on MPAs, thereby expediting the consenting process. It supports the government's Clean Power 2030 Action Plan using powers from the Energy Act 2023 and is part of the Offshore Wind Environmental Improvement Package.
Details on the proposed application process and how the MRF will deliver compensatory measures using a library of strategic compensatory measures. It also discusses the transfer of responsibility for compensation.
Exploration of potential interactions with a separate Scottish MRF, which is being developed independently.
The consultation closes on 12 May 2025 and can be found here.
Natural England's strategic direction for 2025 to 2030
On 2 April 2025, Natural England (NE) published its plan, Recovering Nature for Growth, Health and Security: Natural England's Strategic Direction 2025-2030. The plan highlights the importance of nature to the economy, valued at over £1.8 trillion, and emphasises that economic growth relies on a thriving natural environment.
Key points include:
- NE will focus on restoring natural systems to enable nature to thrive, rather than just preventing harm.
NE will provide evidence-based standards and advice, and deliver outcome-focused regulation and enforcement.
NE's strategic priorities:
supporting large-scale projects and streamlining permissions for "nature positive change."
collaborating on "high nature; low carbon" housing, energy, and transport infrastructure.
offering advice and finance to support sustainable farming, forestry, and fishing.
NE will identify necessary changes for itself and its partners, launching a detailed strategy in autumn 2025. Read NE's plan here.
New regulatory regime for heat networks introduced
On 3 March and 1 April 2025, some of the provisions of the new Heat Networks (Market Framework) (Great Britain) Regulations 2025 took effect, with many more coming into force in January 2026. The regulations aim to protect consumer interests by ensuring reliable and affordable services while promoting sustainability and adherence to net-zero targets.
An activity is regulated under the regulations if it involves broadly: the operation of a relevant heat network and control of the transfer of thermal energy on that network, or part of the network, for the purposes of supplying heating, cooling or hot water; or the supply of heating, cooling or hot water by a heat network.
Ofgem has been appointed as the regulator and is empowered to monitor operators and suppliers of heat networks, enforce compliance and issue authorisations with specific conditions. The energy regulator can also impose penalties for breaches, provide consumer redress and set performance standards.
The regulations establish criminal offences for unauthorised activities and non-compliance. They introduce requirements to provide detailed information and maintain records. Additionally, the regulations mandate membership in an Energy Ombudsman consumer redress scheme to handle complaints and ensure consumer protection.
The regulations seek to provide enhanced consumer protection (by way of fair pricing and clear complaints procedures, among other things) and set minimum performance standard for operators and suppliers of heat networks.
In the first instance, businesses that may be either an operator or supplier of a heat network should register with the Energy Ombudsman as soon as possible and be aware they will need to register with Ofgem via the heat networks digital service by 26 January 2027.
For further information, read our Insight.
Government's publication of the Corry Review to simplify UK's regulatory landscape
The government's Corry Review was published on 2 April 2025. The review was launched in light of criticism that the UK's regulatory regime is unnecessarily complicated and burdensome and has been reducing growth and investment within the UK.
The key measures identified within the Corry Review include;
- Appointing a single lead regulator for major infrastructure projects.
Appointing a new Defra infrastructure board to accelerate the delivery of major infrastructure projects.
Reviewing environmental guidance to remove duplication, ambiguity and inconsistency.
Streamlining permits and guidance.
Creating a single planning portal for all agencies (including environmental regulators).
Providing more autonomy for trusted nature groups to carry out conservation and restoration work without multiple permissions.
The government hopes that the recommendations set out in the Corry Review will help to improve consistency and fairness in enforcing regulatory compliance; unlock private sector green finance; and improve digital innovation amongst regulators.
Government consultation on extending regulations for burning vegetation on peat
The UK government has launched a consultation regarding the extension of regulations on burning vegetation on peatlands, which are crucial for carbon storage. The proposed changes aim to enhance the protection of peatlands and include the following key updates:
- Updating the definition to ensure more comprehensive coverage.
Extending the prohibition to burning vegetation where peat is over 30cm deep, thereby also protecting shallower peat areas.
Reducing the grounds on which one can apply for a licence to burn vegetation on peatlands.
Requiring individuals who intend to burn under a licence to complete prescribed fire and wildfire training.
Ensuring adherence to the Heather and Grass Management Code.
The consultation is open for feedback until 25 May 2025.
Independent review commissioned on greenhouse gas removals
The UK government has commissioned an independent review to explore both the capabilities and challenges of greenhouse gas removals (GGR) technologies. This review aims to support the UK's climate goals, including its nationally determined contribution, carbon budgets, and net zero target.
Key aspects of the review include:
- Assessing the scale of emissions reductions needed from various GGR technologies.
Investigating the opportunities for deploying GGR at scale, leveraging the UK's scientific and engineering expertise, and co-products like hydrogen production. It will also address challenges such as regulatory frameworks and resource availability.
Evaluating the economic costs of deploying GGR in the UK and strategies to attract private investment, including through carbon markets.
Examining the role of GGR in supporting the government's Growth and Clean Energy Superpower Missions and balancing residual emissions.
The review will culminate in a report and recommendations, which will be submitted to the secretary of state in October 2025.
Ofwat consultation on banning performance-related pay for water industry executives
Ofwat has launched a consultation on proposals to introduce a rule prohibiting performance-related pay (PRP) for chief executives and directors in the water industry. This measure targets companies that fail to meet specified standards under the Water (Special Measures) Act 2025.
The proposal requires water companies to prohibit the payment of PRP for the relevant year when a water company has failed to meet any of the following four key standards:
- Consumer matters: when Ofwat makes a decision that a breach of a principal statutory duty (as defined in the Water Industry Act 1991) warrants a financial penalty.
Environment: if the company has received a one-star “poor performing” rating in the Environmental Performance Assessment for the calendar year preceding the end of the PRP payment year.
Financial resilience: if the company breaches its licence requirement to hold a sufficient credit rating and/or subsequently fails to comply with a enforcement order or undertaking.
Criminal liability: if the company is convicted of any offences (with some exceptions allowed).
The consultation period began on 25 March 2025 and will close on 29 April 2025.
Consultation launched on implementation of principles for carbon and nature market integrity
A consultation has been published on the implementation of the UK government’s six key principles for voluntary carbon and nature market integrity, to ensure their effectiveness and reliability:
- Use credits in addition to ambitious actions: Organisations should use carbon credits alongside ambitious value chain emissions reductions. The government seeks views on endorsing the Voluntary Carbon Market Integrity Initiative (VCMI) Claims Code of Practice and recognising interim steps towards best practice.
Use high integrity credits: Buyers and investors should identify high integrity credits using the Integrity Council for the Voluntary Carbon Market (ICVCM) framework. The government invites views on endorsing ICVCM’s principles and the British Standards Institution’s Nature Investment Standards for UK nature crediting programmes.
Measure and disclose credit use: Organisations should disclose their use of credits as part of sustainability reporting to reduce risks and inform market functioning. The government seeks views on voluntary disclosure practices and incorporating VCMI elements into UK guidance.
Plan ahead: Financial institutions and major companies should develop transition plans aligning with the 1.5°C goal of the Paris Agreement. The government seeks views on the role of credits in these plans.
Make accurate green claims: Credit buyers should use appropriate terminology for green claims. The government seeks views on steps to clarify claims, including developing official definitions and standards.
Cooperate to support market growth: Organisations should collaborate to reduce market friction and support alignment. The government seeks views on steps to enhance clarity and confidence through regulatory regimes and legal definitions.
The consultation closes on 10 July 2025.
Consultation launched on draft UK CBAM legislation
View the full Regulatory Outlook
Interested in hearing more? Read all the articles in our Regulatory Outlook series
View the full Regulatory Outlook
Regulatory law affects all businesses.
Osborne Clarke’s updated Regulatory Outlook provides you with high level summaries of important forthcoming regulatory developments to help in-house lawyers, compliance professionals and directors navigate the fast-moving business compliance landscape in the UK.
-
Advertising and marketing
-
Artificial intelligence
-
Bribery, fraud and anti-money laundering
-
Competition
-
Consumer Law
-
Cyber security
-
Data law
-
Digital regulation
-
Employment, contingent workforce and immigration
-
Environment
-
Environmental, social and governance
-
Fintech, digital assets, payments and consumer credit
-
Food law
-
Health and safety
-
Modern slavery
-
Products
-
Regulated procurement
-
Sanctions and export control
-
Telecoms
