Environment | UK Regulatory Outlook February 2024
Published on 28th Feb 2024
Understanding the biodiversity net gain regime | Enforcement against polluting water companies to ramp up | Consultation on increase charges for water discharges
Understanding the biodiversity net gain regime
On 12 February 2024, the biodiversity net gain (BNG) regime went live in England. BNG refers to the principle whereby a developer is required as part of its planning application to evidence a net gain in the biodiversity of a site it is developing.
As a concept it has been around for a few years already, with different local authorities adopting varying approaches: some local authorities did not require it at all, some only required evidence that there would be no net loss in biodiversity, while others required evidence that a specific minimum gain would be achieved in order to approve the application.
As of 12 February 2024, a minimum gain of 10% will be a statutory requirement which applies to the majority of planning applications. Our Insight sets out what businesses need to understand about the new regime.
The requirements are implemented through the Environment Act 2021 (Commencement No. 8 and Transitional Provisions) Regulations 2024. These confirm that the BNG planning condition does not apply retrospectively where the application for planning permission was made before the implementation date. The transitional provisions also confirm that where the planning application was made or permission was granted before this date, the BNG planning condition will not apply to any subsequent planning permission granted for that development.
The government has also recently published a raft of guidance documents on the new regime, including both developer and land manager specific guidance.
Enforcement against polluting water companies to ramp up
The UK government has announced plans to significantly increase inspections on water companies in order to hold them accountable for their performance. This includes recruiting up to 500 additional staff for inspections and enforcement, and introducing stronger regulation over the next three years.
Inspections will more than quadruple, with the Environment Agency (EA) aiming to conduct 4,000 inspections per year by March 2025 and 10,000 inspections per year from April 2026, and this will include unannounced inspections. The government will provide around £55 million annually to support these increased inspections. Defra also recently announced that water company bosses will be banned from receiving bonuses if the company has committed serious criminal breaches.
With the EA taking significant measures to ramp up enforcement action, it is crucial that water companies comply with regulations to avoid enforcement action, and should remember that the EA now has the power to impose unlimited civil sanctions for environmental pollution offences, see this earlier Regulatory Outlook for more.
Consultation on increase charges for water discharges
On 29 January, the EA launched a consultation on proposed charges for water discharges (including groundwater activities). The EA notes that the charges have not been updated since 2018 and that an increase in charges is required in order to address current cost pressures within the body and to allow it to "build capacity and capability, and regulate more effectively and efficiently".
The press release adds that "increased funding will allow for more boots on the ground working to regulate water companies, as well as the advancement of digital and data capabilities to target efforts in the right places. These changes will support the industry to implement good practice and allow the Environment Agency to act on pollution and non-compliance."
Water companies will be those most affected, followed by those in agriculture, recreation and hospitality. Affected businesses may wish to respond to the consultation. Additionally, given the aim of the increase in charges to help with resourcing and capabilities of the regulator, this change could potentially increase enforcement by the EA and is something for businesses to have on their radar.
The consultation closes on 11 March 2024, with changes due to come into force in spring 2024.
EU to introduce new rules on limiting F-gases and ozone depleting substances
The European Parliament recently approved new regulations, which the European Commission welcomes, aimed at reducing emissions from fluorinated gases (F-gases) and ozone-depleting substances.
Under the new F-gas regulation, measures include a complete phase-out of hydrofluorocarbons by 2050, with a gradual reduction in EU consumption quotas from 2024 to 2049. The legislation also imposes stringent requirements that prohibit the sale of products containing F-gases on the Union market and establishes specific deadlines for phasing out their use in sectors where there are alternatives that do not use F-gases, such as domestic refrigeration, air conditioning, and heat pumps.
In addition, the Parliament has adopted a regulation to address the emissions of ozone-depleting substances, with a focus on their recovery and recycling in building materials during renovation projects.
The Council adopted these two new regulations, which closed the adoption procedure.
The new regulation on F-gases was published in the EU Official Journal on 7 February and will enter into force on 11 March 2024.
The new regulation on ozone depleting substances was published in the EU Official Journal on 7 February and will enter into force on 11 March 2024.
European Parliament formally adopt position on Environmental Crime Directive
The European Parliament has formally adopted its position on the new directive on the protection of the environment through criminal law (27 February 2024). As noted in our November edition, the new law will replace the 2008 directive. It aims to improve the investigation and prosecution of environmental crime offences by increasing the number of offences from nine to eighteen. New offences include timber trafficking, the illegal recycling of polluting components of ships and serious breaches of legislation on chemicals. It is expected that the Council will formally adopt the directive on 19 March 2024.
It will enter into force on the twentieth day following its publication in the EU Official Journal and following this, Member States will have two years to transpose the rules into national law.
This new legislation will not only allow for companies committing environmental offences to receive fines, ranging from 5% of the total worldwide turnover or an amount corresponding to €40 million, but also introduces imprisonment against those companies' senior individuals who commit environmental offences. Businesses operating in the EU should therefore be aware that this legislation is on the horizon and understand the implications this will have, as high fines and imprisonment will become a possibility for eighteen environmental crimes.
Final vote on CSDD delayed
Please see ESG.
Two-year delay for certain sector specific standards under CSRD
Please see ESG.
