Environment | UK Regulatory Outlook March 2025

Planning and Infrastructure Bill 2024-25 receives first reading in the House of Commons

On 11 March 2025, the Planning and Infrastructure Bill 2024-25 received its first reading in the House of Commons.

The bill has introduced three areas which will be of particular relevance to developers and businesses within the environmental sector:

1. A Nature Restoration Fund and Environmental Delivery Plans;
2. Amendments to the Conservation of Habitats and Species Regulations 2017 (Habitat Regulations); and
3. Environmental Outcomes Reports.

Part 3 of the bill introduces a Nature Restoration Fund (NRF) which will enable a delivery body (such as Natural England) to create an Environmental Delivery Plan (EDP). An EDP will set-out a package of conservation measures to address the impact of a development. Once in place, the EDP will be monitored by a governmental delivery body who will ensure that the conservation measures are working as expected and will make any necessary amendments to the plan. If a developer makes use of an EDP, it will no longer need to undertake its own environmental assessments for issues covered by the EDP as the governmental delivery body will take charge.

Funding for the NRF and the associated EDPs will draw on contributions from developers via a nature restoration levy. The secretary of state must approve each EDP and they can only be challenged within a six week period. The regime is structured in a similar way to the Community Infrastructure Levy. (For more, see our Insight.)

The Habitat Regulations will be amended so that Ramsar Sites (wetlands of internation importance designated under the Ramsar Convention) will now be treated in the same manner as "European sites" (that is, Special Areas of Conservation or Special Protection Areas) for Habitat Regulations Assessments.

Finally, Environmental Outcomes Reports (EORs), originally introduced by the Levelling Up and Regeneration Act 2023, have been amended to require developers to consider whether their proposed plans will impact the environment of another state, thereby meeting the UK's international obligations under the Espoo Convention.

Government updates statutory guidance following consultation on hedgerow management regulations

On 19 February 2025, the government published the results of its consultation on the proposed use of civil sanctions in the Management of Hedgerows (England) Regulations 2024 (SI 2024/680) and accompanying statutory guidance.

While the majority of respondents agreed that civil sanctions were an appropriate approach, a recurring theme was a lack of detail on how the government plans to monitor and enforce compliance. Concerns were raised that enforcement processes were not robust enough and could be ignored. Among environmental NGOs there was a consensus that certain terms had been ill defined, for example the legislation was not clear on what would amount to "serious damage/harm."

Following the consultation, the government has updated its statutory guidance to address the concerns raised in the consultation. The Rural Payments Agency will enforce the regulations, including the use of civil sanctions where appropriate in line with the guidance.

Call for Evidence from the Independent Commission on the Water Sector Regulatory System

The Independent Water Commission (IWC) has published a call for evidence on 27 February 2025 which will form the basis of recommendations to the UK and Welsh governments to improve the water sector and its regulatory framework in England and Wales. The IWC was established in October 2024 to review and strengthen the regulatory framework of the water sector in England and Wales.

The IWC's Call for Evidence outlines six main areas that it wishes to explore, namely:

1. The need for strategic coordination across sectors impacting or interacting with water.
2. The need for clear long-term planning on water.
3. The complexity and volume of water industry regulation.
4. Concerns about the regulatory oversight of the water industry.
5. The need for fair and stable returns to investors.
6. The need for an improved infrastructure resilience framework.

The IWC will also examine the effectiveness of the river basin management plans; the new appointments and variations market, the business retail market and specified infrastructure project regulations among other items. Nationalisation of the water sector remains outside the remit of the review.

The deadline for responses is 23 April 2025 and the IWC intends to make its recommendations to the UK and Welsh governments by June 2025.

UK publishes National Biodiversity Strategy and Action Plan for 2030

On 26 February 2025 the UK and devolved nations published the "Blueprint for Halting and Reversing Biodiversity Loss: the UK's National Biodiversity Strategy and Action Plan for 2030."

The action plan sets out 23 national targets which align the UK to the international commitment to combat biodiversity loss as set out in the Kunming-Montreal Global Biodiversity Framework. Among the 23 national targets listed, the UK aims to ensure that by 2030:

• at least 30% of areas of degraded ecosystems are under effective restoration;
• at least 30% of terrestrial and inland water areas are effectively conserved;
• the use, harvesting and trade of wild species is sustainable, safe and legal;
• pollution risks from all sources are reduced to levels that are not harmful to biodiversity and ecosystem functions;
• there is full integration of biodiversity and its multiple values into policies, regulation, planning and development processes; and
• the UK will take legal, administrative or policy measure to encourage and enable business to (a) regularly monitor and assess risks/impacts on biodiversity (b) provide information needed to consumers to promote sustainable consumption patterns and (c) report on compliance with access and benefit-sharing regulations to reduce biodiversity-related risks to business and financial institutions.

The full action plan and details of the 23 national targets can be found here. These targets were submitted to the Convention on Biological Diversity (CBD) on 1 August 2024 and available on the CBD Online Reporting Tool.

Environment Agency consults on Decarbonisation Readiness Guidance 

With the introduction of "decarbonisation readiness" (DR) requirements through the Environmental Permitting (Electricity Generating Stations) (Amendment) Regulations 2025, made on 10 February 2025, the Environment Agency opened a consultation on 28 February 2025 on the draft guidance to be followed in preparing a DR report as part of a permit application.

Once the DR requirements come into force on 28 February 2026, operators of new and substantially refurbishing combustion plants must provide a DR report as part of their environmental permitting application in England. The Environment Agency has prepared technical guidance for operators to follow when submitting such a report and is seeking feedback on the draft guidance.

The consultation will be of primary interest to operators of in scope electricity generators but also seeks the engagement of others that have an interest in decarbonisation such as businesses, trade associations, NGOs, government organisations, universities and community groups.

The period for the consultation closes on 9 May 2025.

Government publish first report on Biodiversity Net Gain statutory credits

The government has published its first annual report on the income received from the Biodiversity Net Gain (BNG) statutory credit regime introduced by the Environment Act 2021.

BNG requires new developments to secure a net 10% gain in biodiversity between pre and post development. Developers are encouraged to mitigate habitat loss as a first port of call, followed by creating on-site gain, before resorting to purchasing biodiversity units from a third party, and finally resorting to sourcing statutory credits from Natural England.

Between their introduction in February 2024 and February 2025, the government has generated £247,416 in income, with the majority of this income being generated since September 2024.

The government reports that Natural England has not yet spent the income on habitat creation as the threshold for efficient large-scale investment has not been reached.

HM Treasury launches Action Plan to streamline regulatory landscape

On 17 March 2025 HM Treasury announced a new Action Plan to combat the current regulatory landscape which "too often holds back growth and inhibits private sector growth." The action plan contains three key objectives:

1. tackle complexity and burden or regulation;
2. reduce uncertainty across regulatory system; and
3. challenge and shift excessive risk aversion in the system.

Within objective (1), the plan proposes to ease environmental permit requirements for NSIPs for low-risk activities; launch a priority tracked service to allow developers to work with a dedicated team at the Environment Agency (EA) on their permits and appoint a single lead environmental regulator for major projects.

Two consultations have also been announced: the first, which will take place before Easter, will seek opinions on reforms to enable regulators to be more agile for low-risk decision activities. The second, scheduled for June, will consult on reforms to modernise permitting such as creating regulatory sandboxes for R&D trials to enable operators to innovate.

Within the annex of the plan, the EA has pledged to accelerate its response time to planning applications and will aim to meet a 21 day target by September 2025. Further pledges on improving efficiency of service have been given by both the EA and Natural England.