Nearly five years after a bill was first introduced to regulate environmental matters following the UK’s exit from the EU, the long-awaited Environment Act was finally adopted into law in November 2021. Ministers described it as “accommodating” and said that it was “a lot of fun.”The most ambitious environment program any country has on earth“. This briefing looks beyond the rhetoric to see what business might expect from the Environment Act (“The Act“” in 2022.
- Environmental principles
- Environment targets
- Resource efficiency and waste
- Forest risk commodities
- Biodiversity
- Outlook
1. Environmental principles
The Act will make 5 environmental principles a part of future government policy. This will contribute to sustainable development and environmental protection. Mostly these principles are not new – polluter pays and the precautionary principle are both familiar concepts – but the need for ministers to have “due regard” to them when formulating non-environmental policy is new.
The Government consulted about a draft environmental principles statement in March 2021, several months before the Act was finalised. The interim Office of Environmental Protection (“OEP” Advice to the Government in July 2021, and we now await the Government’s final principles statement.
The draft policy statement clarifies the fact that environmental principles must be considered at policy level, not at individual decision level. This could be a way to protect the government from similar situations to those it has been in recently, such as the controversial new Cumbrian coalmine or North Sea oil-and-gas exploration licences.
OEP’s letter of advice recommends that the government shift the emphasis of the statement to the achievement of environmental benefits as well as the prevention of environmental damage. The OEP’s advice letter recommends that policy changes be seen as an opportunity for environmental improvement. This could make a significant impact on the businesses and individuals who are subject to them.
2. Environment targets
The Environment Act gives the Secretary the power to establish legally binding, longer-term environmental targets that last at least 15 years across a range of environmental areas. The Government must also set at least one target for each of the four priority areas, which are water, air quality and biodiversity, as well as species abundance and fine particulate matters (PM2.5). The Government has also consulted on two possible targets to reduce ambient PM2.5 levels and reduce exposure to PM2.5 before finalizing the Act. To assist the Government in the development of each target, independent expert groups were formed. All had met to discuss the setting of targets by 2021.
Businesses will find these details most interesting. Any target should be followed up with measures to ensure that it can be achieved. Although we don’t know what the requirements for air pollution could look like, based on the 2019 Clean Air Strategy. They may relate to engine performance and machinery, traffic movement restrictions, particularly in cities, or specifications regarding agricultural chemicals.
In February 2022, the Government will hold a consultation about legally binding targets.
3. Resource efficiency and waste
The Environment Act, a more familiar area in law, increases the Government’s power to manage the product’s impact throughout their lifecycle. The Act’s goal is to move from “producer accountability” to “extended producers responsibility” (“EPR”), which means that producers will bear the full financial cost of managing products until their end. This encourages durability, repairability, and recycling of materials.
The Government has already conducted consultations on EPR for packaging. Draft legislation should be presented later in the year with the goal of launching EPR schemes in 2023. Modulated fees will be included to reflect criteria such the ease of recycling the material as well as other costs associated managing the particular type of packaging. Producers under the revised scheme will include brand owners, importers, distributors, sellers, service providers for reusable packaging and online marketplaces – businesses could potentially be in more than one category. Online marketplaces are a new category of producer. It includes “businesses based within the UK that operate a website or other means by which information can be made available over the Internet, through which persons outside the UK are able offer filled packaging for purchase in the UK (whether the operator also does this). The “waste management costs obligation” would apply to any sales that they facilitate. It will be interesting for Amazon and eBay to decide if they make changes to their business models or pass the costs onto the overseas business selling through the platform. This could have the unintended consequence that it reduces consumer choice.
In a similar consultation, the Government also proposed a deposit scheme for return of drinks containers. While similar schemes have been successful in other European countries over many years, the UK has not had a broad-based deposit scheme. There are also concerns about the ability of small retailers to handle returned containers. Before putting covered products on the marketplace, all drink producers and importers will need to connect with the Deposit Management Organisation, a new administrator of the scheme. The Government will determine which materials are covered, what sizes are covered and which product containers will be included. While there are clear benefits for consumers of an inclusive deposit system, this does not take into account the complexity of the implementation.
The Act gives the Government the power to create additional EPR schemes for other product types. Future EPR schemes are possible for textiles, furniture, paints, and mattresses. However, no additional schemes have been proposed.
4. Forest risk commodities
The Government has sought to consult on the implementation of the Act’s provisions concerning forest risk commodities. These provisions aim to ensure that businesses within the UK do not contribute to illegal deforestation through their use of certain imported goods. The consultation document contains an outline of future requirements, even though no draft legislation has been published. Please visit our separate client alert.
5. Biodiversity
DEFRA is currently consulting on the implementation of the Act’s provisions.
A consultation was launched in August 2021 regarding Local Nature Recovery Strategies (“LNRS”), which was primarily targeted at local authorities, but also of interest for developers and anyone managing or owning land under a LNRS. It will eventually cover all of England. LNRS is another area that is making progress, but much of the impact on businesses will be determined after the delineations are made by the Secretary and the local authorities, or other bodies, have published their draft strategies.
DEFRA is currently consulting on regulations and implementation for the Biodiversity net gain. The Act stipulates that any Town and Country Planning Act 1990 planning permission will be subject to a condition regarding biodiversity net gain. This must be met before development can begin. The biodiversity gain plan must be submitted and approved by the developer. It must demonstrate how the development will contribute at least 10% to biodiversity value. Similarly, nationally significant infrastructure projects (“NSIP”) need to show a biodiversity gain where stated in a “biodiversity loss statement”. This acknowledges the many differences between NSIP types. The Government has stated that it will formulate a core statement, which will then need to be adjusted by each project, unless consultation uncovers that bespoke statements are required. Currently, biodiversity net gains will not apply to NSIPs until 2025. In the beginning, only projects onshore will be affected.
6. Outlook
2022 could be the year of biodiversity and protection. 2021 was the year climate change made all the headlines. For organisations looking to integrate biodiversity into their investment or diligence processes, the high-level biodiversity targets and land and specie strategies will be of great interest.
The Government has set a ambitious timetable to run multiple workstreams in order to implement the Act’s provisions more thoroughly. This is evident in the amount of work that was done before the Act was signed into force. There is still a lot of uncertainty for organizations trying to translate the framework requirements into actionable requirements. However, this will be clarified through a further stage and draft legislation. We will continue to monitor the development of this new body and provide updates.