Environmental Law Update | August 2025

The Cunliffe Review – Final Report Published 

The final report from the Independent Water Commission, led by Sir Jon Cunliffe, was published on 21 July 2025. The report contains 88 recommendations across seven themes which the Commission considers are needed to create the ‘fundamental reform’ that it says the water system requires.  The recommendations include the abolishment of Ofwat and the creation of a new integrated regulator, combining the functions of Ofwat, the Drinking Water Inspectorate and water functions from the Environment Agency and Natural England.  It also recommends stronger environmental regulation, calling for reform to the Water Framework Directive and its implementation.

The Government has said it will publish a white paper with its full response to the report in the Autumn this year, but has already accepted five of the Commission’s recommendations, including moving to a new single regulator.

National Policy Statement for Water Resource Infrastructure

Defra has published a National Policy Statement for water resource infrastructure. This provides planning guidance for applicants of nationally significant infrastructure projects for water resources, as defined in the Planning Act 2008.  It will be used as the primary basis for examination by the Examining Authority, and used for making decisions by the Secretary of State when considering development consent applications for water infrastructure.  

The National Policy Statement is available here.

UK Infrastructure: A 10 Year Strategy

On 19 June 2025 the Government published its 10 Year Infrastructure Strategy (the “Strategy”) which seeks to outline a ‘transformative vision’ to drive national renewal through long-term, coordinated investment in economic and social infrastructure.

The Strategy is of significance for water undertakers as it places water at the heart of national growth, housing delivery, environmental resilience, and infrastructure modernisation. With a clear expectation for greater investment, long-term planning, and alignment with spatial development and decarbonisation goals, the Strategy appears to set a new framework for how water companies must operate and collaborate. Water undertakers are now seen not just as utilities, but as strategic partners in enabling economic development, climate adaptation, and the delivery of vital public services across the country.

Key takeaways for water undertakers include:

• Massive scale-up in water investment: £7.9 billion investment in water resources in the next 5 years – including the development of 9 new major reservoirs and 9 water transfer schemes;
• A call for spatial coordination between housing, water, energy, and transport infrastructure; and
• NISTA (the proposed new National Infrastructure and Service Transformation Authority) is developing a national spatial infrastructure tool to model regional capacity and needs (e.g. water headroom).

The 10 Year Infrastructure Strategy is available here.  

Natural Environment 

Amendments to Part 3 (Development and Nature Recovery) of the Planning and Infrastructure Bill

On 17 July 2025, the Government introduced several amendments to Part 3 of the Planning and Infrastructure Bill 2024-25. The amendments seek to address concerns raised by the Office for Environmental Protection ("OEP") and eNGOs about the regressive nature of Part 3 of the Bill.

Key amendments include:

• Clarification of the “overall improvement test”, which now requires that the Secretary of State can only approve an Environmental Delivery Plan (“EDP”) where the effect of the conservation measures will materially outweigh the negative effect of the EDP development on the conservation status of each identified environmental feature;
• A requirement for midpoint, endpoint and revocation reports confirming whether an EDP is still likely to, or has passed, the overall improvement test;
• A requirement for both Natural England and the Secretary of State to take account of the best available scientific evidence when preparing, amending or revoking an EDP; and 
• Requirements that Natural England may only deliver network measures where it considers that it would make a greater contribution to the improvement of the environmental feature in question than measures that address the impact of development locally.

The amendments can be found here and Government guidance explaining the amendments here.

Environmental Improvement Plan Annual Progress Report for April 2024 to March 2025 Published

On 14 July the UK government published its Environmental Improvement Plan Annual Progress Report (April 2024 to March 2025), the final report in a series of reports on action taken to deliver the Environmental Improvement Plan 2023.

The report outlines areas of progress, including the designation of four new National Nature Reserves and the expansion of an existing reserve to more than seven times its original size. At the same time, it highlights ongoing challenges, in particular meeting some of the legally binding targets set out in the Environment Act 2021.

The government reaffirmed its commitment to updating the Environmental Improvement Plan later in 2025 (the “EIP25”), stating the EIP25 will “set out the approach to improving the natural environment we need to take to grow our economy, build 1.5 million homes, boost food security and meet our environment and climate targets with nature as the enabler, driver and protector of growth”.

Delay of Biodiversity Net Gain requirements for nationally significant infrastructure projects (NSIPs) until May 2026

On 26 June 2025, Defra provided an update within its Biodiversity Net Gain guidance which announced the introduction of BNG for nationally significant infrastructure projects ("NSIPs") in May 2026. This marks a delay to the previously planned date of late November 2025.

Environmental Markets

On 7 July the EU Commission published a Roadmap towards Nature Credits which sets out a timeline of actions over the period  2025-2027.  Alongside the roadmap, the Commission published a Q&A doc and a Press Release. The roadmap sets out key steps aimed at scaling up nature credit markets including:

• This year, the Commission will set up an expert group on nature credits to mobilise expertise, share best practices and provide input; 
• Between 2025 to 2026, the Commission will carry out an EU-wide evaluation of supply and demand for nature credits; and
• Between 2025 to 2027, a pilot project on nature credits will be launched and supported by EU funds. 

Waste 

Waste Exemption Charges 

From 1 July 2025, businesses are now required to pay to register most waste exemptions. Companies will need to pay a registration charge of £56 every three years. There will also be a compliance charge for each exemption. The charges are categorised via four bands with varying charges.

The Environment Agency’s guidance can be found here.

Further Delays to the Introduction of Mandatory Digital Waste Tracking

The Environment Act 2021 empowers the Government to introduce regulations to establish mandatory digital waste tracking. This will replace existing requirements to complete waste transfer notes and hazardous waste consignment notes.

On 10 July 2025, Defra  published an updated policy paper on the introduction of the UK digital waste tracking service. This confirms the first element of the waste tracking service will focus on waste receiving sites. Those required to hold a permit or licence to receive waste will be mandated to record details of waste received on the digital waste tracking service from October 2026 (this is later than indicated in previous announcements which suggested digital waste tracking would be introduced in April 2026).  From April 2027, there is planned expansion of the service to other operators.

Marine

Call for Evidence on New UK-EU Fisheries Arrangements Launched by the UK Government

On 17 July, Defra launched two calls for evidence following discussions held in May between the UK and EU, aimed at progressing towards a Sanitary and Phytosanitary agreement. Such an agreement would reduce trade barriers for food and agricultural products between the UK and EU. The calls for evidence are available here.

One of the calls for evidence focuses on the Fishing and Coastal Growth Fund, inviting views on how the fund should be structured to deliver meaningful outcomes for the UK’s fishing industry and communities. The call for evidence also invites responses to provide input on the “impact of recent policy developments”, including the proposed ban on bottom trawling in Marine Protected Areas, as discussed in our June 2025 Environmental Law update (available here).

Defra Consultation on Environmental Compensatory Measures Reforms for the Offshore Wind Sector

On 22 July 2025, Defra launched a public consultation on the proposed Environmental Compensatory Measures Reforms (“ECMR”) for offshore wind development. These reforms are intended to be implemented through a statutory instrument and accompanying guidance, delivered using powers granted by the Energy Act 2023.

The consultation raises concerns that the current environmental compensation system, which requires developments to compensate for damage to any specific protected feature within a Marine Protected Area (“MPA”), may limit development due to a lack of satisfactory compensation measures available. The consultation highlights the importance of offshore wind development in order to enable the UK to meet our “Clean Power by 2030” mission.

Key proposals in the consultation include:

• Allowing environmental compensation to be delivered “through wider compensatory measures which provide benefits to the UK MPA network”, not just the specific protected feature impacted; 
• The creation of a public compensation register which collates information regarding environmental compensation delivered to date; and  
• The publication of additional guidance to ensure clarity within the industry in relation to: “additionality” (the idea that compensatory measures must be additional to normal practice), the timing of compensation delivery, and “small impacts”.

The consultation is open until 2 September 2025, with Defra intending to lay the statutory instrument and publish any additional guidance later in 2025.

ESG

UK Green Taxonomy Dropped

The Government's Response to the UK Green Taxonomy Consultation published on 5 July stated that a UK green taxonomy would not be pursued. This was later confirmed by Rachel Reeves in her Mansion House Speech on 15 July 2025.  

Like the EU taxonomy for sustainable activities, the UK green taxonomy was being developed to facilitate an increase in sustainable investment and / or reduce greenwashing, by helping define what activities could be considered environmentally sustainable.  In her speech, Rachel Reeves said that for sustainable finance, she is “determined to focus our efforts on policies that matter most to our world-leading sector and support investment in the transition…[and will] instead work with regulators through the Transition Finance Council to capitalise on the £200 billion opportunity of the global transition to net zero.”

A copy of her speech is available here.

Climate

Groundbreaking ICJ Opinion

On 25 July, the ICJ gave its long awaited Advisory Opinion on the obligations of States in respect of Climate Change.  It unanimously held that (a) under a variety of multilateral treaties and international customary law, States have obligations to ensure the protection of the climate system and other parts of the environment from anthropogenic greenhouse gas emissions, and (b) a breach by a State of those obligations constitutes an internationally wrongful act. It held the legal consequences of a breach may include full reparation to injured States in the form of restitution, compensation and satisfaction, provided that the general conditions of the law of State responsibility are met (including that a sufficient direct and certain causal nexus can be shown between the wrongful act and injury).

A copy of the Opinion and summary is available on the ICJ’s website here.