Environment | UK Regulatory Outlook October 2026

UK

Defra publishes statutory guidance on environmental delivery plans and the overall improvement test 

The Department for Environment, Food and Rural Affairs (Defra) published statutory guidance on 17 September 2026 on how Natural England (NE) must deliver conservation measures under environmental delivery plans (EDPs). EDPs let developers pay a levy instead of carrying out their own environmental assessments or project-specific conservation work. 
 
The statutory guidance consists of two publications: 

• Guidance on the approach that NE should take to secure conservation measures: Sets out how NE should secure conservation measures under EDPs to pass the overall improvement test (OIT). It encourages broader supplier engagement, compliance with recognised environmental standards and fair and open procurement. If competitive procurement is forgone, clear justification is required. NE is advised to adopt a test-and-learn approach, refining its commercial strategies as experience accumulates. 
• Guidance, in a detailed annex, on the OIT to be applied by NE: The OIT is passed if the positive effects of conservation measures outweigh the negative effects of the EDP by its end date. A second limb requires that a favourable balance between conservation benefits and the negative impacts of development be kept up for as long as the negative effects persist. 

Alongside the guidance, Natural England opened a consultation on 17 September 2026 on the first draft EDP, addressing nutrient pollution affecting protected sites in Norfolk.

Developers considering using an EDP, or affected by one, should review both publications to understand how Natural England will select and fund conservation measures and the standard it must meet. 

Planning Inspectorate finds BNG condition cannot lawfully apply to retrospective development 

Recently, the Planning Inspectorate considered whether a biodiversity net gain (BNG) condition could be imposed on a retrospective permission for a dwellinghouse. 

Planning permission had been granted for the retention of a replacement dwelling and associated alterations, subject to conditions. A subsequent section 73 application to remove two conditions (including a BNG condition requiring a 10% BNG package with a Defra metric calculation, enhancement details, delivery timetable and long-term monitoring arrangements) was refused.

The transitional regulations bringing the mandatory BNG regime into force expressly excluded developments where permission was sought for works already carried out (regulation 2(2), Environment Act 2021 (Commencement No 8 and Transitional Provisions) Regulations 2024 (SI 2024/44)), a position confirmed by planning practice guidance (paragraph: 003 Reference ID: 74-003-20240214). Therefore, the inspector found the mandatory BNG legislation to be inapplicable to retrospective permissions granted under section 73A of the Town and Country Planning Act 1990.

The inspector also differentiated the BNG condition under Schedule 7A of the 1990 Act, which operates as a pre-commencement requirement designed to apply automatically to qualifying permissions. Since development had already taken place, it could not operate as intended. The council's condition was framed as a post-decision requirement, not being reflective of the statutory wording or mechanism in Schedule 7A. Although the National Planning Policy Framework supports biodiversity enhancement generally, the condition's justification relied solely on Schedule 7A rather than any adopted local plan policy or other basis. The inspector concluded that the BNG condition was unnecessary. 

EU updates

European Commission adopts energy efficiency and sustainability package for data centres 

On 21 September 2026, the European Commission published a package of measures to improve the energy efficiency and sustainability of EU data centres, building on the Energy Efficiency Directive ((EU) 2023/1791). The package comprises three elements: 

• A Commission Report on data centre energy efficiency (COM(2026)500). 
• A call for evidence and public consultation for a future proposal regarding a regulation on common EU minimum performance standards for data centres. 
• A Commission Delegated Regulation establishing a common Union rating scheme for data centres. 

The Commission notes that the growth in the data centre sector, driven partly by the EU Cloud and AI Development Act, creates challenges for energy availability, grid capacity, carbon emissions and water use. 

The call for evidence and public consultation will help the Commission prepare a proposal for a regulation on minimum performance standards, covering energy efficiency, water use, waste-heat reuse, grid services and other sustainability criteria. The consultation closes on 14 December 2026 with a proposal expected in Q2 2027. 

The delegated regulation establishing the rating scheme is now subject to a two-month scrutiny period by the European Parliament and Council before entering into force. The first sustainability labels for individual data centres are expected in 2027, with a first review of the scheme by end-2028. 

European Parliament formally adopts CO2 emission standards directive for heavy-duty vehicles with trailers 

On 7 October 2026, the European Parliament formally adopted at first reading a directive amending Directives 1999/62/EC, 1999/37/EC and (EU) 2019/520 regarding CO2 emission classes for heavy-duty vehicles with trailers (procedure 2023/0134(COD)). 

The directive aims to clarify how Eurovignette rules apply to different vehicle categories and emission classes, supporting a smoother transition to a road charging system that is more reflective of vehicle emissions and enabling more harmonised implementation across member states. 

The adopted text reflects the informal trialogue agreement of 30 June 2026. The Council is expected to formally adopt the directive without further amendments at an upcoming meeting, after which it will be published in the Official Journal and enter into force 20 days later. 

European Commission proposes postponing certain methane emissions obligations for energy sector importers 

The European Commission adopted a proposal on 14 October 2026 to amend the EU Methane Regulation, postponing certain obligations on importers of gas, oil and coal. The Commission says the delay responds to disruption and price volatility in energy markets caused by the closure of the Strait of Hormuz. It is intended to ease pressure on EU industry and national administrations while giving importers more time to achieve full compliance. 

The Methane Regulation sets rules on measuring, monitoring, reporting, verifying and reducing methane emissions across the EU's energy sector. Under the proposal, two sets of importer obligations would be postponed by one year.

Under Article 28, importers must show that their natural gas, oil and coal are subject to monitoring, reporting and verification measures equivalent to those applying to EU producers. That deadline, along with that of submitting related compliance reports, would move to 31 May 2029 and then recur annually. 

Article 29 obligations would also be postponed. Importers and EU producers must first report the methane intensity of their energy products, a deadline that would move to 5 August 2029. The requirement to demonstrate that methane intensity falls below set maximum limits would move to 5 August 2031, with annual reports due by 31 May each year thereafter. 

The proposal does not alter the regulation's other requirements or its underlying ambition. It will now proceed under the ordinary legislative procedure, requiring agreement from the European Parliament and the Council before it can take effect.