Preparing the economy for the impact of the upcoming UK Environment Bill

Environment Bill
As the UK Government develops a new governance system on environmental issues, businesses need to consider how their processes may need to change to ensure that they remain compliant and to avoid potential fines.

The Environment Bill will “enshrine principles in law” that cover clean air, waste management and plastics pollution, as well as water stewardship. The UK government has expressed the ambition to improve the environment within a generation.

The Bill is driven by Brexit and the need to establish new structures and controls as the UK is no longer subject to scrutiny by the European Commission. The Bill will drive environmental legislation through legally-binding targets, a new environmental enforcement body and by placing environmental principles in law for the first time. The UK Environment Bill creates an increased, tighter, and ultimately stricter liability framework. 

Changes include: 

  • The Bill establishes an Office for environmental Protection (OEP) which will have the power to take businesses, public bodies and the Government to court over any breaches of environmental law. 
  • Theo OEP adds a new layer of regulatory scrutiny with the sole objective of appropriate enforcement in all aspects of environmental protection, not least for the government’s net-zero carbon emissions target for 2050. 
  • The Bill empowers the Secretary of State to set measurable targets relating to the natural environment including air quality and particulate matter, water, biodiversity and resource efficiency and waste reduction.
  • Local powers become responsible for air pollution via legally binding targets to reduce fine particulate matter. 
  • The UK government gains the power to mandate manufacturers to recall vehicles that do not meet the relevant environmental standards. 
  • New houses will need to be delivered in a way that protects and enhances nature.
  • A new system will be introduced enabling developers to 'purchase' credits in biodiversity gain sites for land subject to a conservation covenant or planning obligation.
  • The Bill amends existing legislation to govern more strictly domestic solid fuel burning such as wood burning stoves. 
  • Producers will need to take responsibility for the waste they create through recycling and pay full net-costs of disposal of packaging they place on the market – up from just 10% now and minimise the use of single use plastics. 
  • The Bill introduces a bottle deposit return scheme and more effective litter enforcement and tackles waste crime. 
  • Provisions to reform abstraction licensing will include powers to vary or revoke licences without the payment of compensation. New requirements for water companies are set to bolster planning for future water supplies and wastewater/drainage networks.

Impact on the economy

All businesses should familiarise themselves with the new system. As a result of new regulation, factories may need to upgrade their air quality, water management and waste management systems. The government estimates a total cost of £196.6m from business and consumer impacts due to the Bill.
Sectors that will face the toughest challenges are those with the largest “activity footprint” in terms of permit to operate. Examples of this would be energy, utilities, waste management, secondary materials, mining, natural resources, construction, agriculture and chemicals / coatings. 

There are signs that the government will introduce new schemes for textiles, fishing gear, and construction waste as part of its ambitions to introduce a more circular economy where resources are reused rather than used once prior to disposal. 

Members of Parliament are likely to be particularly interested in the OEP's remit, independence, accountability and funding, as well as those areas which 'touch' the general public directly, such as plastics, tree-planting and air-quality. Once the Bill has passed the Commons, it still needs to be approved by the House of Lords.

Business assessment

Businesses need to insulate themselves from the increased liability with diligent consideration of past, and future, operations. 

There will be a range of targets for each of the priority areas (air quality, water, waste and biodiversity), including at least one long-term target for each. This means that businesses will have to focus on every area in order to comply and reach the goals that have been set. Emissions will have to be limited, pollutants will have to be reduced, waste management will need to be revised and improved. It is therefore important that businesses scrutinise the bill, establish where they will be affected and begin planning to meet these legally binding targets as it could lead to financial punishments where they are not achieved.

For further information, please contact: 

James Alexander, Environmental Practice Leader
E: james.alexander@uk.lockton.com  
T: +44 (0)207 933 2068

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