Environment | UK Regulatory Outlook July 2025

Planning and Infrastructure Bill progresses through House of Lords 

The Planning and Infrastructure Bill (PIB) is continuing its legislative journey to royal assent, having reached the committee stage in the House of Lords on 17 July 2025.  

From an environmental angle, the PIB looks to establish a Nature Restoration Fund (NRF) which will be managed by a body such as Natural England. This body will carry out large scale conservation projects, with developers contributing financially to the NRF to discharge their environmental mitigation responsibilities. Environmental groups have raised concerns about the NRF and have called on the government to reconsider this proposal, fearing that it could result in a reduction in legal protection for nature, with developers buying their way out of environmental mitigation requirements.  

The Lords have been alive to the environmental concerns regarding the NRF and during the committee stage, amendments to environmental obligations were tabled. The amendments proposed include: 

• A mandatory requirement that any environmental delivery plan (EDP) includes back-up measures for mitigation of adverse impacts.  
• A mandatory requirement on Natural England to monitor the effectiveness of EDPs.
• Tightening consultation requirements when amending an EDP.
• Network conservation measures can only be included in an EDP if Natural England considers that they will be more effective in contributing to the improvement of the conservation status of the affected feature than onsite measures. 

A full list of the amendments can be found here. Whether these go far enough to address concerns raised by environmental groups remains to be seen. 

New water regulations  

Changes have arrived in the water and sewerage industry in England. The Water (Special Measures) Act 2025 (Commencement No 1) Regulations 2025 brought new regulation into force on 23 June 2025, aimed at enhancing environmental protection and sustainability. 

Water and sewerage companies in England must now produce annual plans to reduce pollution incidents. These plans will outline specific measures to tackle pollution linked to their systems. Previously, these plans were voluntary but they will now be a legal requirement. 

Drainage and wastewater management plans will need to include strategies for using nature-based solutions. This change is designed to promote more sustainable and eco-friendly practices within the industry. 

NAO report on UK Emissions Trading Scheme 

On 30 June 2025, the National Audit Office (NAO) released a report on the UK Emissions Trading Scheme (UK ETS), a key element of the UK's net zero strategy which requires certain businesses to monitor, report, and offset their carbon emissions annually. 

The report noted that: 

• the government has successfully transitioned from the EU Emissions Trading System to the UK ETS, ensuring continued carbon pricing for carbon-intensive industries;
• carbon emissions dropped by 11 million tonnes between 2021 and 2023 in industry, aviation, and power generation; and
• the current low carbon price may not sufficiently encourage investments in low-carbon technologies. 

The government plans to expand the UK ETS to the maritime sector in 2026 and waste sectors in 2028, and to introduce a UK Carbon Border Adjustment Mechanism to combat carbon leakage. A commitment has also been made to link the UK ETS with the EU ETS, which is expected to steady carbon prices and accelerate emissions reductions in both jurisdictions. 

Consultation on UK Sustainability Reporting Standards 

On 25 June 2025, the Department for Business and Trade launched a consultation on the UK Sustainability Reporting Standards (UK SRS 1 and UK SRS 2), which are based on the International Sustainability Standards Board (ISSB) standards issued in June 2023. 

There are some key points arising out of the consultation: 

• Single Materiality - unlike the breadth of the EU's Corporate Sustainability Reporting Directive, the UK SRS will be limited to being based on IFRS S1 and IFRS S2. This means that only disclosures on how sustainability factors impact a company's profitability will be required.
• Carbon credits - the consultation considers whether the purchase and use of carbon credits should be included in the disclosure requirements.
• Climate-first approach – the UK taskforce is proposing a "climate-first" approach for companies to report on: (1) climate disclosures but not Scope 3 emissions in year 1; (2) all climate disclosures in year 2; and (3) all climate and wider sustainability disclosures in year 3. 

The consultation period will close on 17 September 2025. If supported, the final UK SRS 1 and UK SRS 2 are expected to be published in autumn 2025. 

Separate to the consultation, the IFRS Foundation published new guidance on 23 June 2025 to support disclosures by organisations on their transition to a low carbon economy.  

Welsh ban on wet wipes  

On 18 June 2025, the Environmental Protection (Single-use Plastic Products) (Wet Wipes) (Wales) Regulations 2025 (SI 2025/716) were made, coming into force on 18 December 2026. These measures will ban the supply (including free supply) of wet wipes in Wales. This regulation is part of a wider policy to help reduce single use plastics and their impact on the environment when discarded. This ban does not apply to wet wipes related to medical care or treatment.  

New standards for sustainable drainage systems 

On 19 June 2025, the Department for Environment, Food and Rural Affairs (Defra) published non-statutory standards for the design, maintenance and operation of surface water drainage systems in England. These standards aim to improve the management of surface water runoff, primarily consisting of rainwater, by utilising sustainable drainage systems (SuDs). 

The new standards encompass the following; 

• a new set of overarching principles which outline the objectives and approach for applying the standards. They introduce a "SuDs approach" and require relevant planning applications to demonstrate compliance with the standards in site design;
• a hierarchical standard which provides criteria for prioritising the choice of final runoff destinations, ensuring the most effective and sustainable options are considered first; and
• minimum design and maintenance requirements for surface water drainage systems. 

Climate Change Committee's 2025 report to Parliament 

On 25 June 2025, the Climate Change Committee (CCC) published its statutory report to Parliament, assessing the UK's progress in reducing greenhouse gas (GHG) emissions and meeting carbon budgets as mandated by the Climate Change Act 2008. 

The report notes that the UK has cut its GHG emissions by over 50% since 1990 and highlights improvements in government policies over the years.  

The CCC's key recommendations to the government include: 

• reducing electricity costs to boost consumer confidence in the net zero transition and expand the low-carbon electricity system;
• increasing heat pump installations in existing buildings, ensuring new homes are not connected to the gas grid and decarbonising public sector buildings;
• accelerating the electrification of industrial heat, developing aviation policies for net zero by 2050 and finalising business models for engineered GHG removals; and
• implementing policies for increased tree planting and peatland restoration. 

DESNZ consultation on climate-related transition plans 

On 25 June 2025, the Department for Energy Security and Net Zero (DESNZ) launched a consultation on climate-related transition plan requirements. 

The consultation seeks input on several key areas: 

• Views are invited on the elements of creating, disclosing and implementing transition plans aligned with the 1.5°C goal of the Paris Agreement (a legally binding international treaty on climate change to limit global warming to 1.5°C).
• Feedback is sought on the advantages of transition plans and the experiences of those who prepare and use them.
• The consultation explores potential regulatory approaches, including requiring entities to explain non-disclosure, develop and disclose plans or implement transition plans.
• Consideration is given to extending requirements beyond financial institutions and FTSE 100 companies, though small to medium-sized enterprises would be excluded.
• The consultation reviews ongoing initiatives for disclosing transition plans, including the use of the Transition Plan Taskforce (TPT) framework and draft UK Sustainability Reporting Standards (UK SRS).
• Input is requested on incorporating climate resilience and nature into transition planning, using guidance from the Taskforce on Nature-Related Financial Disclosures (TNFD). 

The consultation closes on 17 September 2025. 

Welsh government's 30by30 framework for biodiversity conservation 

On 18 June 2025, the Welsh government unveiled its 30by30 framework, outlining its strategy to protect 30% of Welsh land, freshwater and sea for both people and nature by 2030.  

The 30by30 framework aims to meet Target 3 of the Convention on Biological Diversity (CBD) Kunming-Montreal Global Biodiversity Framework, which is a global commitment to conserve 30% of Earth's land and ocean areas by 2030. 

The framework details how designated protected areas, such as Sites of Special Scientific Interest (SSSIs), will help achieve the 2030 target. It also highlights the importance of national parks, national landscapes, and other effective area-based conservation measures.  

Additionally, the framework explains how protected areas will be integrated to form resilient ecological networks across Wales. The framework also outlines the Welsh government's approach to monitoring progress towards the 30by30 target. 

Government proposes to halt UK green taxonomy 

On 15 July 2025, the government published its response to the consultation on the UK green taxonomy. The response concludes that work on a UK green taxonomy "is not the most effective tool to deliver the green transition and should not be part of our sustainable finance framework." The government has said that it will refocus its efforts to deliver an effective sustainable finance framework through UK Sustainability Reporting Standards and other sector plans and roadmaps. 

Deposit Return Scheme for Wales update 

A written ministerial statement from the Welsh government published on 10 July 2025 has confirmed that the introduction of the drinks container Deposit Return Scheme (DRS) in Wales will be accelerated to match the introduction of other DRS in the rest of the UK, which are currently anticipated to be in place from 1 October 2027. The update also confirms that glass will remain within the remit of the Welsh DRS in contrast to other schemes and that the Welsh scheme will be introduced in phases.  

Digital waste tracking update 

On 10 July 2025, the government clarified the timelines for the introduction of the mandatory digital waste tracking service: 

• From autumn 2025 - The IT service will be available to a select group of users, with the number of users gradually increasing (private beta phase).
• From spring 2026 - The IT service will be publicly accessible to all permitted and licensed receiving site operators (public beta phase).
• By April 2026 - All nations will have enacted secondary legislation mandating the use of the service by receiving site operators starting from October 2026.
• From October 2026 - The service will be mandatory for receiving site operators.
• From April 2027 - There is a planned expansion of the service to other operators, with details to be confirmed. 

In terms of next steps, the government will announce working groups for commercial industry operators and local authorities to help design the service. Sign up to the newsletter here for further updates.