In England and Wales, 2025 saw meaningful regulatory steps that will shape compliance in 2026 and beyond. Key developments included:
- The Corry Review, published in April, assessed whether Defra’s regulatory framework supports economic growth and nature recovery. Backed by 29 recommendations across five strategic themes, the Government responded by announcing its Plan for Change, setting out a more dynamic, streamlined approach to environmental regulation aimed at driving economic growth while safeguarding nature. Nine key measures included a single, lead regulator for major infrastructure projects, the revamping of environmental guidance, streamlined permits and guidance, a green finance boost and rolling regulatory reform. This approach mirrors trends in the EU, where reforms such as the Environmental Omnibus and broader “Better Regulation” initiatives seek to simplify compliance, reduce administrative burdens, and accelerate permitting for strategic projects, while maintaining environmental standards. Both jurisdictions are converging on a model that prioritises clarity, speed, and predictability to support investment and innovation.
- The UK’s extended producer responsibility for packaging (pEPR) took effect on 1 January 2025 under the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, shifting cost and data duties onto qualifying producers and setting transitional provisions through 2026.
- The Simpler Recycling regime moved from policy to delivery: workplaces began having duty‑to‑separate requirements from 31 March 2025, with household collection changes due from 31 March 2026 and kerbside plastic film by 31 March 2027.
- Deposit Return Scheme (DRS) legislation took shape with the laying and approval of draft regulations for England and Northern Ireland in early 2025. A policy statement confirmed that the DRS will apply to single-use PET plastic, steel, and aluminium drink containers (150ml to 3L), and that the Deposit Management Organisation (DMO) was appointed in May 2025 to oversee the scheme’s implementation. The rollout is planned for 1 October 2027 across England, Northern Ireland, and Scotland, with Wales pursuing its own parallel scheme.
- Digital Waste Tracking Service (DWTS) shifted to a phased roll-out, with usability testing commencing in autumn 2025, ahead of mandatory use for permitted waste receiving sites from October 2026.
- Water sector reform gathered pace with the Water (Special Measures) Act 2025 (WSMA) and the Independent Water Commission (IWC), led by Sir Jon Cunliffe, publishing its final report in July 2025 (IWC Final Report). The WSMA significantly strengthens the power of the water industry regulators and delivering on the government’s commitment to put failing water companies under special measures. The WSMA provides for:
- blocking bonuses for executives who pollute our waterways;
- bringing criminal charges against persistent law breakers;
- enabling automatic and severe penalties for wrongdoing; and
- ensuring monitoring of every sewage outlet.
The IWC Final Report outlined a ‘total reset’ across regulation, company ownership, system planning, environmental obligations and investment frameworks. Following publication, the Government announced that it would abolish Ofwat (one of four IWC recommendations that the Government immediately accepted) and create a single, powerful regulator with responsibility for the entire water sector. This new body will consolidate functions currently spread across Ofwat, the Environment Agency, Natural England and the Drinking Water Inspectorate, aiming to replace what has been described as a “complex, tangled system of confusion” with a unified, accountable framework.
- The Government confirmed plans to expand the UK Emissions Trading Scheme (UK ETS), a key element of the UK's net zero strategy to include maritime emissions from 2026 and waste incineration from 2028, and announced the introduction of a UK Carbon Border Adjustment Mechanism (CBAM) to address carbon leakage. In parallel, exploratory talks under the Common Understanding with the European Commission signalled an ambition to link UK ETS with the EU ETS, paving the way for mutual CBAM exemptions for compliant goods. For details on implementation and practical steps, see Decarbonisation below.
- Effective from 18 December 2025, the Planning and Infrastructure Act 2025, streamlines approval processes for major infrastructure and housing projects, addresses inefficiencies and supports economic growth and clean energy. Key measures include a Nature Restoration Fund (NRF), changes to compulsory land purchase, new environmental outcomes reports, and modernising local planning authorities to speed up decision-making.
- Permitting for Medium Combustion Plants (MCPs) tightened. From 1 January 2025, Tranche A generators over 5 MW came into scope under the Environmental Permitting (England and Wales) (Amendment) Regulations 2018, requiring permits and compliance with emission limits, even for units operating fewer than 50 hours annually. This follows the earlier inclusion of existing MCPs above 5 MW in 2024, with smaller plants due to be captured from 2029.
- Finally, consumer law enforcement changed gear through the Digital Markets, Competition and Consumers Act 2024. From 6 April 2025 the Competition and Markets Authority (CMA) can directly impose penalties of up to 10% of global turnover for unfair practices, including for misleading “green” claims.
The UK Government is planning significant legislative changes in 2026 to enable closer alignment with the EU across a range of regulatory areas as part of a broader ‘reset’ in UK-EU relations post-Brexit in various sectors, including food standards, animal welfare, pesticide use, electricity markets and carbon emissions trading. This may allow new EU laws in agreed areas to be automatically incorporated into UK law, with the UK retaining a veto in specific cases. Implementation is expected to take effect in the first half of 2027.
Chemicals
The Government’s Environmental Improvement Plan 2025 (EIP 2025), published at the end of 2025, committed to a faster, more outward‑looking chemicals regime, drawing on decisions from “trusted jurisdictions” to avoid duplication and accelerate protections, signalling pragmatic alignment with the EU where appropriate. The Government has also flagged legislation in 2026 to extend UK REACH transitional registration deadlines, and the annual work programme continues to prioritise restrictions and authorisations.
Per- and polyfluoroalkyl substances (PFAS) remain a headline risk. EIP 2025 confirmed that Defra will publish a cross‑government PFAS Plan in 2026, with a 2027 decision anticipated on restricting PFAS in firefighting foams under UK REACH anticipated. Opportunities for PFAS substitution should therefore be carefully considered. We can also expect a response from the HSE’s consultation on a UK REACH restriction proposal on PFAS in firefighting foam once the consultation closes on 18 February 2026. This consultation reflects the coordinated action between Defra and the HSE under UK REACH. Defra, alongside the devolved administrations, sets the strategic direction for chemicals regulation, whilst the HSE acts as the implementing authority.
Water
Following the IWC Final Report, the Water Sector Reform White Paper is anticipated in early 2026 and will set out the Government’s formal response to the IWC’s 88 recommendations. This will be followed by a Water Reform Bill later in this Parliament. Key themes include stronger and more coherent regulation, streamlined permission pathways for infrastructure that protects water quality, and a sharper focus on delivering the best possible outcomes for consumers and the environment.
Alongside structural reform, enforcement in the water sector is set to tighten. A Defra consultation, which closed on 3 December 2025, sought views on introducing new penalty tools for water company offences, including variable monetary penalties (VMPs) and automatic fixed penalties imposed by the Environment Agency to the civil standard of proof for specified breaches. These measures would complement existing enforcement options such as prosecution and unlimited fines for serious offences, signalling a shift towards faster, more proportionate sanctions for persistent non-compliance. For further detail on the proposed framework, please refer to Addleshaw Goddard’s 6 November 2025 briefing.
Decarbonisation
Building on announcements made in 2025, the Government has confirmed primary legislation in the Finance Bill 2025-26 to introduce a Carbon Border Adjustment Mechanism (CBAM) from 1 January 2027, with secondary legislation and guidance expected throughout 2026. At launch, CBAM will apply to aluminium, cement, fertilisers, hydrogen, iron and steel, while indirect emissions will remain out of scope until at least 2029.
The CBAM rate will align with the UK Emissions Trading Scheme (UK ETS) free allowance adjustments, ensuring consistency between domestic carbon pricing and border measures. Importers will need to register and submit quarterly returns, with the first extended reporting period ending 31 December 2027 and payment due by 31 May 2028.
As announced in 2025, the Government has confirmed plans to expand UK ETS coverage, bringing maritime emissions into scope from 2026 and waste incineration from 2028. Progress will continue under the Common Understanding, which is an agreement reached at the UK-EU Summit in May 2025, in which both sides committed to strengthening bilateral cooperation and, amongst other areas, working towards linking their ETS systems. If achieved, this would enable mutual exemptions from CBAM for compliant goods, reducing the risk of double carbon pricing and easing administrative burdens for cross-border trade. Progress on these discussions in 2026 could significantly shape the future architecture of UK carbon pricing and its interaction with European markets.
In terms of practical steps, if your operations are likely to enter UK ETS (such as through waste incineration or maritime emissions), you should consider starting to build an emissions baseline and form governance processes to avoid a scramble when compliance dates land. For CBAM goods, map embedded emissions and customs codes, and review long-term supply contracts for CBAM clauses.
Environmental permitting
Defra’s consultation between August and October 2025 proposed a bold modernisation of industrial permitting, delivering on commitments made in the Corry Review and the Government’s Plan for Change to simplify regulation and accelerate infrastructure delivery. These reforms, also aligned with the Modern Industrial Strategy, aim to reduce regulatory barriers and support clean-tech growth. Key proposals include quicker, integrated standards, broader Environment Agency responsibility for setting Best Available Techniques (BAT), proportionate routes for low-risk activities, and regulatory sandboxes to enable innovation. The proposed inclusion of water and land emissions in integrated pollution control reflects the Plan for Change’s ambition to streamline permitting and guidance, while ensuring environmental protections remain robust. A follow-up consultation on detailed reforms is expected during 2026.
In the waste sector, the Government has confirmed its commitment to reforming the current waste carriers, brokers and dealers system with risk‑based standard rules permits for waste controllers, transporters and combined operations, bringing them into the Environmental Permitting Regulations 2016 (EPR). This transition is expected to roll out during 2026, further reducing administrative complexity in line with the Modern Industrial Strategy’s goal of reshaping regulation to support growth.
Defra also published a policy paper in July 2025 on waste exemption reforms, signalling a significant tightening of controls due to abuses across the system. Key proposals include prohibiting exemptions at permitted sites, limiting the number of exemptions per site, increasing record‑keeping requirements for operators, and updating waste codes and conditions for consistency. Conditions are changing for exemptions U1, T4, T6, T12, D7, S1 and S2, while exemptions U16, T8 and T9 are set to be removed entirely. These changes aim to close loopholes that have historically enabled waste crime and poor environmental outcomes, aligning with the Government’s broader push for a more transparent, accountable system.
Further additions flagged for integration into the EPR include water abstraction and impoundment licensing, intensive dairy and beef farms, and sludge spreading practices, with installations regulation also under review. These changes reflect a clear move toward integrated pollution control, bringing high-impact activities across land, water, and waste under consistent permitting standards. Businesses in agriculture and water‑dependent sectors should anticipate new compliance obligations and begin assessing operational impacts well ahead of formal consultations in 2026.
Circular economy
The Digital Waste Tracking Service (DWTS) is due to progress in spring 2026 and will become mandatory for permitted waste receiving sites in October 2026, with broader obligations to follow on other operators from April 2027. We expect this will result in higher enforcement efficiency and “automatic” data-driven penalties for non-reporting or misclassification.
In parallel, the long‑trailed Circular Economy Strategy has been rebadged as the Circular Economy Growth Plan, with consultation expected in early 2026. The Government emphasises growth and jobs, with taskforces set up to prepare roadmaps for chemicals/plastics, construction, textiles, transport and agri‑food to follow. Sector bodies are calling for clear metrics and investment signals in the meantime.
Biodiversity and nature
The Government has taken steps to “make BNG (biodiversity net gain) work better”, whilst also retaining the core policy. Proposals announced in December 2025 include exempting sites below 0.2 hectares and consulting on targeted brownfield exemptions, following feedback on disproportionate burdens for small schemes. This is a material change from the current micro-site thresholds and is already drawing varied sector responses.
BNG for national significant infrastructure projects (NSIPs) is scheduled to become mandatory from May 2026, with the core approach applying the statutory metric (10% gain, 30-year maintenance) across sectors via biodiversity gain statements. We expect biodiversity gain statements to be integrated into National Policy Statements over time.
Separately, the Planning and Infrastructure Act 2025 introduced Environmental Delivery Plans (EDPs) and the Nature Restoration Fund (NRF), whereby developers may discharge certain habitat/species obligations by paying a levy aligned to an EDP, avoiding project‑specific assessments for those impacts and funding strategic conservation. Initial EDPs are planned around nutrient pollution catchments. The NRF Implementation Plan sets the early focus and transition from local nutrient neutrality funds.
Final word
If 2025 laid the foundations for regulatory streamlining, 2026 is the year of implementation. The direction is consistent: data‑centred compliance, faster enforcement, and strategic delivery mechanisms replacing one‑off mitigation.
2026 will be a pivotal year for UK environmental law, with a clear shift from policy development to practical delivery and enforcement. The pace and scope of change across chemicals, water, decarbonisation, permitting, waste, and biodiversity mean that businesses should be proactive in reviewing their compliance strategies and operational processes. Early engagement with new requirements, whether through emissions tracking, supply chain mapping, or adapting to new permitting and reporting regimes, will be essential to manage risk as the regulatory landscape evolves. As the Government continues to prioritise data-driven enforcement, streamlined regulation, and closer alignment with international standards, those who prepare now will be best placed to navigate the transition and contribute to the UK’s environmental and economic objectives.
