2025 Predictions: What’s on the horizon for the environment?

The change of government in the UK in 2024 hasn't (yet) resulted in any radical shifts in environmental regulation, but the new government is pursuing several existing environmental initiatives. Here are our top 10 things to watch out for this year.

1. Extended producer responsibility for packaging (finally)

After a consultation and the introduction of data reporting regulations in 2023, the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024 were finally made on 11 December 2024 and came into force on 1 January 2025.

The new Regulations are similar to the existing Producer Responsibility Obligations (Packaging Waste) Regulations 2007 (which will be revoked on 1 January 2026) and the various packaging data reporting regulations, in that they require UK packaging producers to register with the appropriate regulator, and to collect and report data in relation to packaging they supply. However, they also require producers to assess the recyclability of packaging they supply and require ‘large’ producers to pay (from October 2025) annual fees to a newly established ‘scheme administrator’ as a contribution to the net costs of local authorities providing a waste management service in relation to household packaging waste and the costs of providing public information about the disposal of packaging waste.

As with the existing producer responsibility regime for packaging, producers can instead join an accredited compliance scheme which will be responsible for discharging its members’ obligations. 

2. Environmental permits required for waste carriers, brokers and dealers

As we reported last year, the government was expected to introduce regulations in 2024 to implement changes proposed in a 2022 consultation (which it responded to in October 2023) to replace the existing ‘upper tier’ and ‘lower tier’ waste carrier registration system with a ‘standard rules’ environmental permit or a registered exemption. The government has still not announced an implementation date, but having not done so in 2024, we now anticipate it will do so in 2025.

Lower tier carriers, brokers and dealers will be required to have a registered exemption. Upper tier carriers, brokers and dealers will be required to obtain an environmental permit. Three permit types will be introduced - waste controller only, waste transporter only and a combined waste controller-transporter permit. Each will be differentiated according to the activity carried out under it. Permits will also be differentiated by the scale of the operations undertaken and type(s) of waste carried by the permit holder. 
Waste producers will also need a registered exemption or a ‘controller’ permit if they pass their waste to an operator who only holds a waste ‘transporter’ permit.

3. Changes to waste exemptions and charges for waste enforcement activities

Waste exemptions allow operators to carry out certain low-risk waste management activities without needing an environmental permit. There are currently 59 different exemptions in England, covering a range of waste use, treatment, disposal and storage activities. They are free to register.

In a consultation issued in November 2024 (closing 20 January 2025) the Environment Agency proposed introducing charges for registering waste exemptions from April 2025 – a registration or renewal charge and a compliance charge (also payable on registration/renewal). Exemptions would be grouped into four compliance charge bands according to the environmental risk they pose. The three exemptions in the highest compliance charge band would be removed, so an environmental permit would be needed for the activities they cover:

• T8 - mechanically treating end-of-life tyres
• T9 - recovering scrap metal
• U16 - using depolluted end-of-life vehicles for parts.

The November 2024 consultation also proposed a ‘waste fee for intervention’ of £100 per hour plus the cost of any materials, similar to the Health and Safety Executive’s ‘fee for intervention’ scheme for health and safety breaches. It appears that the fee would only apply to waste activities and not to other environmental permitting activities.

4. Simpler recycling

The Separation of Waste (England) Regulations 2025 were laid before Parliament on 3 December 2024 and will come into force on 31 March 2025. They will reform business and household waste collections in England.

From 31 March 2025, businesses with 10 or more full-time equivalent employees must segregate certain ‘core recyclable waste streams’ from general waste and arrange for their separate collection. The core recyclable waste streams comprise: (1) food waste and garden waste; (2) plastic, glass and metal; and (3) paper and card. Businesses with fewer than 10 full-time equivalent employees will be exempt from this requirement until 31 March 2027.

Looking forward, businesses will also have to arrange for the separate collection of plastic film by 31 March 2027.

5. Continued scrutiny of green claims

Last year saw the Financial Conduct Authority’s guidance on the anti-greenwashing rule come into effect on 31 May 2024. More generally, any green claim by a business is likely to face scrutiny by a range of stakeholders as to whether it complies with the CMA’s Green Claims Code and the ASA’s CAP Code.

The new Digital Markets, Competition and Consumers Act 2024 bans ‘unfair commercial practices’, which may include certain types of green claims. Engaging in unfair commercial practices is a criminal offence, so businesses making green claims should now take extra care to ensure they are not misleading.

6. The Water (Special Measures) Bill

The government introduced the Water (Special Measures) Bill into Parliament in September 2024 to deliver on Labour’s manifesto commitment to improve water quality and ensure water companies are better held to account if they fail to deliver for the environment and their customers. The stated aims of the Bill are to: (1) block bonuses for water company executives ‘who pollute our waterways’; (2) bring criminal charges against ‘persistent law breakers’; (3) impose automatic and ‘severe’ fines for wrongdoing; and (4) enable independent monitoring of every sewer overflow outlet.

We have summarised the key provisions and implications of the Bill here.

The Bill has completed its passage through the House of Lords and at the time of writing is at Committee stage in the House of Commons. We anticipate it receiving Royal Assent in the first quarter of this year.

7. UK Green Taxonomy

A taxonomy is a classification tool which provides its users with a common framework to define which economic activities support climate, environmental or wider sustainability objectives. In contrast to reporting frameworks, taxonomies are primarily designed to provide users with information about individual activities and processes. The EU Taxonomy Regulation was formerly assimilated EU law in the UK but was repealed by the Financial Services and Markets Act 2023. Since then, the UK has had no green taxonomy.

To try to facilitate an increase in sustainable investment and reduce greenwashing, the government issued a consultation in November 2024 (closing 6 February 2025) on the use cases for and design of a UK green taxonomy. Subject to positive responses to the consultation, we anticipate the taxonomy developing further during 2025.

8. Changes to EPCs and MEES

In a consultation launched in December 2024 (closing 26 February 2025) the government has proposed changes to the energy performance of buildings regime for England and Wales. The changes include some that, if implemented, would impact on landlords of both commercial and domestic property, in particular:

• reducing the validity period of new Energy Performance Certificates (EPCs) from 10 years to two years
• requiring a valid EPC throughout a tenancy.

Following the publication on 17 December 2024 of its response to the Climate Change Committee’s 2024 progress report on the UK’s reduction of emissions, the government is expected to consult early this year on proposals for homes in the private rented sector and all social housing to meet an improved minimum energy efficiency standard (MEES) by 2030, with the minimum EPC rating being increased to C. We are also expecting the government’s response to the 2021 consultation on MEES for non-domestic private rented sector property early this year. That consultation proposed a minimum EPC rating of B by 2030.

9. UK Carbon Border Adjustment Mechanism

In 2023 the government confirmed the introduction of a UK Carbon Border Adjustment Mechanism (CBAM) from 1 January 2027 on imports of certain carbon intensive imported goods in the following sectors: aluminium; cement; ceramics; fertiliser; glass; hydrogen; and iron and steel. These are goods the production of which would be within the scope of the UK Greenhouse Gas Emissions Trading Scheme if they were produced domestically. Following a further consultation in 2024, goods in the glass and ceramics sectors will not be within the scope of UK CBAM initially, but the sectoral scope will otherwise be kept under review beyond 2027.

The UK CBAM is intended to address the risk of ‘carbon leakage’ to support decarbonisation. Carbon leakage is the movement of production and associated emissions from one country to another due to different levels of decarbonisation effort through carbon pricing and climate regulation. Although the UK CBAM will not be implemented until 2027, the Finance Bill 2024-25 (which is currently going through Parliament) gives powers to HMRC to prepare for the introduction of the UK CBAM, so we anticipate more details of how the UK CBAM will be implemented to emerge this year.

10. GB forest risk commodities regime

The EU adopted its Deforestation Regulation in 2023 but has postponed the implementation date by 12 months to 30 December 2025 (and 30 June 2026 for small and micro undertakings). In the UK, the Environment Act 2021 contains enabling powers for a forest risk commodities (FRC) regime in Great Britain (the EU Deforestation Regulation applies in Northern Ireland), but the previous government did not make any regulations and the new government has yet to make any further announcements about the implementation of a FRC regime.

If and when implemented, the FRC regime will prohibit certain businesses from using specified forest risk commodities, including cocoa, soy, palm oil and non-dairy cattle products, and impose due diligence requirements to ensure full traceability of supply chains. Like the EU Deforestation Regulation, the purpose of the FRC regime will be to ensure that certain goods placed on the market in Great Britain will no longer contribute to deforestation and forest degradation, both inside and outside Great Britain. With the EU moving ahead with the implementation of the EU Deforestation Regulation (albeit with a 12-month delay), we anticipate the government making further announcements this year on the introduction of the FRC regime under the Environment Act 2021.