Environment | UK Regulatory Outlook September 2023

Developers, are you ready for biodiversity net gain obligations?

From November 2023, the requirements for mandatory biodiversity net gain (BNG) as part of development applications will apply to all new developments under the Town and Country Planning Act 1990.

The core BNG requirement is that the value of the natural habitat post-development provides at least a 10% net gain. The gain must be maintained for at least 30 years and can be delivered both onsite and offsite.

Developers need to start engaging with their new BNG compliance obligations and will need to consider their strategy for achieving BNG in the short and longer term.

For more on how to assess the impact of biodiversity net gain requirements on development projects in England, see our Insight.

Consultation launched on SFDR implementation and options to improve framework

The European Commission has published two consultations, a targeted consultation and a public consultation, on the Sustainable Finance Disclosure Regulation (SFDR) with the objective of these consultations to assess the potential shortcomings of the SFDR.

The targeted consultation, which is seeking views from public bodies and stakeholders who are more familiar with the SFDR, focuses on the disclosure requirements under the regulation and whether changes are needed, how appropriate the principle adverse impacts indicators are, and questions on whether changes to the product categorisation system are needed. It is also seeking views on how well the SFDR interacts with other sustainable finance legislation.

The public consultation is seeking views from a broader range of stakeholders on the general shortcomings of the regulation. 

Both consultations close on 15 December 2023.

Alongside the consultations, the Commission is also running a series of workshops to discuss the current challenges and how the SFDR can be improved. Register here.

Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2023

On 13 September, the Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2023 were laid and amend the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021, which provide for the auctioning of allowances used in the UK Emissions Trading Scheme (UK ETS).

The amendments will, from 2024, set the auction share and therefore the number of allowances that enter circulation in line with the proposed net zero consistent cap. It also provides that from 2024 to 2027, a number of allowances will be added to the auction share each year to smooth the transition.

Businesses that work within the sectors in scope of the UK ETS, namely energy intensive industries, the power generation sector and aviation, will need to be aware of these amendments and especially the reduction in allowances.

Nutrient neutrality requirements to stay

The government recently put forward amendments to the Levelling Up and Regeneration Bill which would remove the requirements for nutrient neutrality requirements for new housing developments. However, the House of Lords, on 13 September, rejected the amendments made by the government and so these have not been added to the Levelling Up and Regeneration Bill, over which the government is aiming to secure Royal Assent before the King’s Speech on 7 November 2023.

Call for evidence launched on updated UK Battery Strategy

The Department for Business and Trade have launched a call for evidence for a UK batteries strategy that will be published in the coming months.

The government propose that the new battery strategy will:

• Set out UK policies and government activity relevant to batteries, including in relation to their design, manufacturing, transportation, use, re-use and end-of-life, to reflect the international and national context.
• Help unlock investment by identifying where investment is needed, signposting battery demand and promoting the use of suitable financial instruments to bring it about.
• Set out the key properties and potential of current and future battery technologies, with a particular focus on technologies with applications in mobility, industrial and energy storage applications.
• Consider the whole life cycle of battery development and use, including access to supply chains, manufacturing, use, and second life, end of life and recycling.

The call for evidence closes on 28 September 2023.

Taskforce on Nature-related Financial Disclosures publish final disclosure framework

Please see ESG.

Sustainable batteries regulation published in Official Journal

Please see Products.