Environment | UK Regulatory Outlook July 2026

EU Ban on destroying unsold clothes partially in force 

The ban on destroying unsold clothes and shoes under the EU's Ecodesign for Sustainable Products Regulation 2024 ((EU) 2024/1781) (ESPR) has now been introduced. From 19 July 2026, "large companies" are banned from destroying unsold textiles (unless measures cannot reasonably be expected to prevent the need to destroy them). There are also obligations around disclosure by large companies of unsold products which are discarded, how they are discarded, and the measures taken to avoid destruction. See here for further details on the restrictions. 

Transitional REACH registration deadline extended 

The REACH (Amendment) (No 2) Regulations 2026 (SI 2026/849) were made on 16 July 2026 and enter into force on 6 August 2026. 

The regulations extend the deadline for providing information to the Health and Safety Executive (HSE), under the transition from EU REACH to UK REACH. The submission deadlines will now be 27 October 2029, 2030 and 2031 (moved from 7 October 2026, 2028 and 2030).  

Consultation on judicial review reforms for planning 

The Ministry of Justice has published a consultation on whether the recent reforms to Nationally Significant Infrastructure Project (NSIP) judicial review should be extended to other planning regimes (that is, those under the Town and Country Planning Act 1990 and the Transport and Works Act 1992). 

The consultation focuses on "major infrastructure" and "strategically important developments", so changes will be unlikely to apply to all planning development consented under the regimes.  

If implemented as proposed in the consultation, the changes would see:  

• Removal of paper permission stages (in favour of case management conferences).  
• Designation of cases as Significant Planning Court Claims.  
• Application of new NSIP target timescales to applicable developments under the regimes.  
• Removal of the right of appeal for totally without merit cases. 

The consultation will run until 27 August 2026, and responses should be submitted to JRReform@justice.gov.uk.  

Littering and fly-tipping penalties increased 

The Environmental Offences (Fixed Penalties) (Amendment) (England) Regulations 2026 (SI 2026/816) were made on 14 July 2026 and will enter into force on 1 September 2026. 

The regulations increase the fixed penalty maximum from £500 to £750 per littering offence, and increase the fly-tipping fixed penalty from £1000 to £1500. The changes will apply in England only.  

New processes added to Climate Change Agreement regime 

The Climate Change Agreements (Administration, Energy-intensive Installations and Eligible Facilities) (Amendment and Revocation) Regulations 2026 (SI 2026/826) were made on 7 July 2026 and come into force on 1 January 2027. The key change from the amendments is to add three new processes to the Climate Change Agreement (CCA) scheme – the processes impacted are:  

• Mechanical plastic recycling.  
• Packaging of spirits.  
• Production of electric vehicle batteries.  

The CCA regime allows entry into voluntary agreements for improvements to energy efficiency and/or reductions in carbon emissions. In return, those entering CCAs will be eligible for a reduced rate of climate change levy.  

Biodiversity Net Gain for Small Developments 

The Biodiversity Gain (Town and Country Planning) (Amendments and Transitional Provisions) (England) Regulations 2026 (SI 2026/790) were laid before Parliament on 13 July 2026 and come into force on 6 August 2026. 

The regulations: 

• Amend BNG rules to place offsite BNG on the same preference as onsite BNG for the purposes of development which is not major development (small development).  
• Create a new exemption for developments of 0.2 hectares or for temporary developments lasting five years or less, in each case where no onsite priority habitats are impacted.  
• Remove the existing exemption for small scale self- and custom-build developments. 
• Contain transitional provisions for the changes to the hierarchy and revised exemptions.  

The regulations were accompanied by an explanatory memorandum.  

Government publishes delivery plan for '30by30' in England 

The Department for Environment Food and Rural Affairs (Defra) has published its delivery plan to outline how it will achieve the UK target to "protect and improve" 30% of land and inland waters in England by 2030 (30by30).  

The plan outlines:  

• a tiered approach for assessing areas of land to contribute to 30by30 (gold, silver and bronze);  
• how the criteria will be applied in assessing land;  
• other actions to make it easier for landowners to help deliver 30by30 on the ground; and  
• other actions the government is taking to strengthen efforts in delivering 30by30.  

Government publishes response to consultation on stronger sanctions for environmental offences by water companies 

Defra has published a response to its October 2025 consultation on strengthening civil sanctions for water companies that carry out water-related environmental offences in England. The response explains it has decided to: 

• allow the Environment Agency (EA) to impose variable monetary penalties for minor to moderate offences in relation to environmental permitting, water abstraction, water impounding and drought. This will be subject to the civil standard of proof (on the balance of probabilities) and penalties will be capped at £500,000; and 
• require the EA to impose automatic fixed monetary penalties (to the civil standard of proof) for specific environmental permitting or water abstraction breaches. The level of penalties will depend on the turnover of the company, going up to £10,000 for large organisations.  

The EA will be required to serve a notice of intent. The EA can choose not to impose a penalty if it deems there are exceptional circumstances, but there will be no right to appeal a decision by the EA.  

Regulations made to include international aviation and shipping in UK carbon budgets 

The Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026 (SI 2026/727) were made on 30 June, coming into force on 1 July. The regulations extend the scope of greenhouse gas emissions under the Climate Change Act 2008 to include international aviation and shipping emissions within the scope of UK emissions for the sixth carbon budget (2033-37), all subsequent periods and the UK's net zero target.  

The methodology for determining the UK's share of international emissions will be determined separately by the secretary of state and will be consistent with international carbon reporting practice.  

Energy Savings Opportunity Scheme amending regulations made  

The Energy Savings Opportunity Scheme (Amendment) Regulations 2026 (SI 2026/701) were made on 23 June, coming into force on 22 July. The Energy Savings Opportunity Scheme (ESOS) requires larger companies and non-public sector organisations in the UK to carry out mandatory energy saving assessments, including calculating total energy consumption and identifying where energy savings can be made.  

The regulations are intended to improve ESOS by: 

• requiring fuller reporting on energy saving measures participants have implemented to increase accountability for reducing energy consumption;  
• removing compliance routes (Display Energy Certificates and Green Deal Assessments) that are no longer considered best practice; and  
• removing certain obligations for participants who exclusively comply using the ISO 50001 certification compliance route.  

ESMA publishes statement on publication or distribution of ESG ratings by third parties pending authorisation 

The European Securities and Markets Authority (ESMA) published a statement on 1 July on the publication or distribution of ESG ratings by third parties and the authorisation, recognition or registration of ESG rating providers under the ESG Rating Regulation ((EU) 2024/3005). The regulation applies from 2 July and introduces a regulatory approach to enhance the transparency, comparability, reliability and independence of ESG rating activities.  

The statement clarifies whether third parties that are publishing or distributing ESG ratings of existing, but unauthorised, ESG rating providers will be able to continue to do so from 2 July. It explains that: 

• rating providers other than small rating providers wishing to continue to operate in the EU after 2 July must notify ESMA by 2 August of their intention to apply for authorisation or recognition, and submit their application by 2 November;  
• small rating providers wishing to continue operating in the EU must notify ESMA by 2 November of their intention to benefit from the temporary regime; and  
• from 2 July, third parties may continue publishing or distributing the ESG ratings of ESG rating providers until ESMA has adopted a decision to grant or refuse an application for authorisation or recognition, or to register the notifier as a small provider.  

ESMA intends to publish a list of entities that have notified it of their intention to continue operating in the EU after 2 July. After 2 November, third parties should consult the register to determine the ESG rating providers from which it will be possible to continue to publish or distribute ESG ratings.  

Environment Agency publishes first agriculture and the water environment report  

The EA has published the first of what will be an annual Agriculture and the Water Environment report addressing the regulatory approach, compliance outcomes, enforcement activity and collaborative efforts to address agriculture's impact on water quality.  

The 2026 report covered the agricultural sector in England between April 2021 and March 2026. Key messages included:  

• The expansion of the EA's inspection programme identifying non-compliance with environmental regulations.  
• The EA's adoption of remote sensing, drone imagery and the Agricultural Land Environmental Risk and Opportunity Tool to assist remote inspections.  
• Increased abstraction and impounding licence inspections to monitor compliance with licence conditions. Agricultural abstraction demand rivals public supply during summer months in some regions, highlighting the need for sustainable water management, especially during increasing climate pressures.  

The report aims to highlight the EA's principle of support before enforcement.  

European Supervisory Authorities consult on reforms to disclosure of key performance indicators under Taxonomy Regulation 

Following technical advice from the European Commission in March, the European Supervisory Authorities (ESAs) published the following papers on 1 July: 

• European Banking Authority: discussion paper on limiting the fees and commissions KPI to capital markets-related activities, connecting the trading book KPI to market liquidity, and simplifying the disclosure template; 
• European Insurance and Occupational Pensions Authority: consultation paper on its proposals about the current underwriting KPI for insurance and reinsurance undertakings, including the potential introduction of a "green-invested activities" KPI; and  
• European Securities and Markets Authority: consultation paper on proposals to simplify the Taxonomy disclosure framework for non-financial undertakings and asset managers to address stakeholder concerns about complexity and reporting burden.  

Comments can be made on the papers until 12 August. The ESAs' responses are due in October and the European Commission intends to adopt amendments in early 2027.  

Order for UK's seventh carbon budget made 

The UK's seventh carbon budget (2038-42), which sets the budget at 535 million tonnes of carbon dioxide equivalent, came into force on 25 June by way of the Carbon Budget Order 2026 (SI 2026/695). This will achieve an 87% greenhouse gas emissions reduction from 1990 levels and includes emissions from international aviation and shipping.  

As part of the UK government's requirement to set five-year carbon budgets under the Climate Change Act 2008, the budget was recommended by the Climate Change Committee and endorsed by the Environmental Audit Committee.  

The government is now required to set out a delivery plan for the budget period, which is likely to focus on electrification, low-carbon fuels, carbon capture and storage, and nature-based measures.  

Order to exclude international carbon units from UK carbon budgets made  

The Climate Change Act 2008 (Credit Limit) Order 2026 (SI 2026/694) came into force on 26 June. The order sets a limit of zero on the amount of international carbon units from overseas reductions or avoidances of greenhouse gases that can count towards meeting the fifth carbon budget. Any carbon units that arise from trading allowances between the EU Emissions Trading System (ETS) and the UK ETS are exempt from this limit if the two systems are linked during the fifth carbon budget period (2028-32) in order to avoid restricting any future link between the two.  

Government publishes Farming Roadmap 2050  

The government has published its Farming Roadmap 2050: Growing England's Future, setting out the long-term strategic vision and policy framework for farming in England.  

Split into three themes (profitable and productive, sustainable, and resilient), the roadmap integrates the government's commitments on food security, environmental recovery, climate resilience and rural economic growth. It recognises the major impact of agriculture on the environment and water pollution and the need to shift to sustainable farming systems, and sets out key long-term goals of maintaining food production, lowering emissions, integrating nature-friendly farming, and shifting to a market-led model where public funding supports public goods not delivered by the markets. 

The roadmap aligns with the statutory targets under the Environmental Improvement Plan and Environment Act 2021, including:  

• restoring or creating 250,000 hectares of wildlife-rich habitats and doubling the number of farms providing year-round resources for wildlife to support biodiversity recovery; 
• improving water quality;  
• prioritising soil health through sustainable management of agricultural soil;  
• increasing woodland cover by 43,000 hectares; and  
• investing £85 million in restoring and managing peatlands.  

The roadmap is not a fixed delivery plan and is not statutory, but it is likely to influence the design of future regulations, schemes and policy.  

Council of EU agrees position amending regulation on sustainability-related disclosures in the financial services sector 

The Council of the EU has announced it has agreed its position on the proposed regulation amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector and Regulation (EU) 1286/2014 on key information documents for packaged retail and insurance-based investment products. 

The Council set out the following amendments it is seeking to introduce:  

• to allow for better comparability between financial products, when companies identify and disclose the principal adverse impacts of their investments, they must make use of at least three indicators from a list to be provided by the European Commission to support their claims; 
• investments in companies that are active in the fossil fuel sector that allocate 20% of their capital expenditure to economic activities that are aligned with EU taxonomy rules, and which have a strategy to reduce emissions, may be included in the transition category;  
• inclusion of general-purpose issuances by public sector bodies in the transition category; and  
• the disapplication of categorisation provisions for alternative investment funds offered exclusively to professional investors.  

Now that the Council's position is established, the Presidency of the Council can begin negotiations with the European Parliament.  

Planning and Infrastructure Act 2025: regulations for environmental delivery plan prioritisation and nature restoration levy 

The Environmental Delivery Plans (Appropriate Prioritisation) Regulations 2026 (SI 2026/655) were made on 16 June, and will come into force on 9 July, and on 18 June, the draft Nature Restoration Levy Regulations 2026 were laid before Parliament. 

Under the Planning and Infrastructure Act 2025, the government is introducing an alternative approach for developers in England to meet environmental obligations relating to protected sites and species. Where an Environmental Delivery Plan (EDP) prepared by Natural England (NE) is in place and used by a developer, that developer is no longer required to undertake its own assessment for issues addressed by the EDP. To use the EDP, the developer must pay the nature restoration levy into the Nature Restoration Fund, which is then used by NE to pay for the conservation measures set out in the EDP. The levy regulations provide the framework for how it operates. 

The prioritisation regulations establish how NE should prioritise conservation measures when preparing an EDP: that is, NE must prioritise measures that avoid the negative effect of EDP development over those that simply mitigate, and those that mitigate over those that compensate. In most cases, avoidance measures will be conditions of development.  

Government publishes response to energy efficiency standards for non-domestic private rental properties 

The government has published an interim response to consultations on raising the minimum energy efficiency standards for non-domestic private rental properties in England and Wales.  

The response confirms an intention to introduce the following requirements:  

• All non-domestic private rental properties over 1,000 SqM to reach an energy efficiency rating of EPC B (where cost effective) from 2031.  
• Buildings below 1,000 SqM will retain the current minimum standard of EPC E.  
• There will no longer be an interim 2027 target.  

Commission updates EU Deforestation Regulation product scope and digital tools 

See ESG section. 

Commission adopts delegated regulations to simplify the CSRD 

See ESG section. 

Council formally adopts End-of-Life Vehicles Regulation 

See ESG section. 

HMRC consults on new VAT rules for Deposit Return Schemes 

See sustainable products section. 

Government responds to Environmental Audit Committee report on PFAS 

See sustainable products section.