Environmental law is entering a decisive phase. From waste tracking to carbon border measures, 2026 will reshape compliance for UK businesses. Here’s what you need to know – and how to stay ahead.
Published 13 January 2026
In December 2025, the Department for Environment, Food & Rural Affairs (Defra) published a revised Environmental Improvement Plan (EIP), described as a ‘roadmap for restoring England’s environment over the coming years’. The EIP contains numerous goals, targets and commitments across Defra’s environmental priorities.
The EIP’s publication may signal the government’s intent to bring about marked changes in environmental regulation in 2026. In this article, we set out our top 10 issues for businesses to watch out for this year, in areas such as waste, environmental permitting, carbon and chemicals.
Waste
1. Reform of the waste carrier, broker and dealer system
In August 2025, Defra published a policy paper confirming the details of its proposed reform in England of the waste carrier, broker and dealer (CBD) system, which applies to all those who transport waste.
We outlined the main proposed changes in our 2025 predictions article - waste carriers, brokers and dealers will be replaced by ‘controllers’ and ‘transporters’, ‘upper tier’ waste carrier registrations will be replaced with a requirement for a ‘standard rules’ environmental permit, and ‘lower tier’ registrations will be replaced by a requirement for a registered exemption. There will also be some exemptions from needing a permit or registered exemption.
Once the new system is in force, those with upper tier registrations will be required to apply for a permit when their registration is due for renewal. Those with lower tier registrations will be required to register for an exemption or apply for a permit within 12 months of the system coming into force. A further consequence of CBD regulation coming under the environmental permitting system will be that penalties for non-compliance will be stricter.
Although we predicted the implementation of the CBD system reforms in 2024 and 2025 too, we anticipate that the new system will finally be implemented this year, after an Environment Agency consultation on the form of the new standard rules permits.
2. Introduction of mandatory digital waste tracking
This is another long-overdue change, first consulted on in 2022. In February 2025 Defra announced that a digital waste tracking service would be in place from April 2026.
The first element of the waste tracking service will focus on waste-receiving sites inputting data about all the waste they receive. It is envisaged that by April 2026 all nations will have laid secondary legislation to mandate the use of the mandatory tracking service by site operators required to hold a permit or licence to receive waste, from October 2026. A beta version of the IT service will be made available for all permitted and licensed waste receivers in spring 2026.
3. Get ready for the introduction of deposit return schemes across the UK
The Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2025 came into force in January 2025. They introduce a deposit return scheme (DRS) which will commence on 1 October 2027 (summarised in this article). From that date, customers in England or Northern Ireland will pay a refundable deposit for certain single-use drink containers. A DRS in Scotland will also come into operation on that date.
Wales is also developing its own DRS, the details of which the Welsh Government set out in a consultation published in August 2025. Unlike the English / Northern Irish and Scottish DRSs, the Welsh DRS will also include glass. While the Welsh Government has not set a date for the introduction of the Welsh DRS, it indicated in a written statement issued in November 2025 that implementing regulations will be placed before the Senedd in February 2026 and that applications for the appointment of a deposit management organisation to run the Welsh DRS will open from March 2026.
We expect further details of the Welsh DRS and the timeframe for its implementation to become clearer in 2026. Irrespective of the progress of the Welsh DRS, those caught by the English / Northern Irish and Scottish DRSs will need to undertake preparatory work throughout 2026 (e.g. following the publication of labelling specifications) to ensure they are properly prepared for the introduction of the schemes in October 2027.
4. Publication of circular economy growth plan
Defra was expected to publish its circular economy growth plan for England in 2025, but in December 2025, in its Residual waste reduction Environment Act target delivery plan, it announced that it would publish the growth plan (also known as the ‘circular economy strategy’) in ‘Early 2026’ instead.
The circular economy growth plan is expected to set out how the government will deliver a more circular economy and will inform the additional policies required (beyond those already announced) to meet the statutory waste reduction target in the Environment Act and the related interim targets. The EIP also makes it clear that the growth plan will set out options to promote greater circularity in sectors which will be key to reducing residual waste, including waste entering landfill.
5. More changes to the extended producer responsibility scheme for packaging waste (pEPR)
As reported in our 2025 predictions, the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024 (2024 Regulations) came into force in January 2025 and introduced pEPR in the UK.
On 1 January 2026, the Producer Responsibility Obligations (Packaging and Packaging Waste) (Amendment) Regulations 2025 (2025 Regulations) came into force. The 2025 Regulations amend the 2024 Regulations and allow the pEPR scheme administrator, PackUK, to appoint a producer responsibility organisation (PRO) to perform certain functions on its behalf, or to provide advice, recommendations or support to the scheme administrator. As set out in this guidance, PackUK intends to appoint the PRO in March 2026.
Additionally, and as explained here, the 2025 Regulations allow large producers to offset the weight of ‘closed loop’ packaging waste (household packaging that is made of food-grade plastic packaging, is collected from the end user by the producer, is recycled by a single processor and is recycled into food-grade plastic material) against the weight of the household packaging they supply.
In 2026, modulated fees are also set to be introduced, with different types of packaging being subject to higher or lower modulated fees based on recyclability assessments.
Environmental permitting
6. Exemptions reform
In April 2025, Defra and the Welsh Government launched a consultation on reforms to the process for creating exemptions under the Environmental Permitting (England and Wales) Regulations 2016 (EPR 2016).
In the consultation outcome (published in October 2025), Defra and the Welsh Government confirmed their intention to give new powers to the Environment Agency (EA) and Natural Resources Wales (NRW) to create, amend or remove environmental permitting exemptions. Defra and the Welsh Government intend to create a new process that will allow the EA and NRW to publish definitions for exemptions and the conditions that apply to them. The new powers are intended to initially apply to flood risk activities, groundwater activities, water discharge activities, and waste operations. In England, the new powers will also apply to exemptions under the reformed waste CBD system (see above).
Defra plans to make the required amendments to the EPR 2016 in 2026. The Welsh Government supports the need for change, but will not decide on amending the EPR 2016 until after May 2026.
In the EIP, Defra has also committed to remove three exemptions and tighten seven more, stop allowing multiple exemptions on a single site or on sites with an environmental permit, and to introduce record-keeping requirements. Further details of these proposed changes were set out in a policy paper in July 2025, in which Defra noted that further detail about when the relevant amendments will come into force will be shared in due course.
Carbon
7. Secondary legislation and guidance for the UK Carbon Border Adjustment Mechanism (CBAM)
The government has confirmed the introduction of a UK CBAM from 1 January 2027 to mitigate the risk of ‘carbon leakage’ (the movement of production and associated emissions from one country to another due to different levels of decarbonisation effort through carbon pricing and climate regulation), to support the decarbonisation of UK industry.
The UK CBAM is a levy that will be applied to certain carbon intensive imported goods whose production would be within scope of the UK Greenhouse Gas Emissions Trading Scheme if produced domestically. The UK CBAM will apply to imported goods from the aluminium, cement, fertilisers, hydrogen, and iron and steel sectors (products from the glass and ceramics sectors will not be in the scope of the UK CBAM from 2027, as originally proposed, but the scope will be kept under review beyond 2027).
The primary legislation for the UK CBAM is contained in the Finance Bill 2026, which received its first reading in the House of Commons in December 2025. The Finance Bill 2026 sets out the scope of the UK CBAM, how it will be administered, and how liability is calculated. It is expected that further detailed guidance on the UK CBAM will be published in 2026, ahead of the 2027 implementation date. A recent consultation outcome notes that draft secondary legislation and notices for technical consultation will be shared in ‘early 2026’ to allow interested stakeholders to review the legislation and ensure it meets the policy intent.
Chemicals
8. Increased regulation of PFAS
The regulation of PFAS (per- and polyfluoroalkyl substances – chemicals known as ‘forever chemicals’ because of their persistence in the environment) is likely to be a key environmental issue in 2026. Defra has committed in the EIP to publishing a PFAS plan in 2026 (Plan). The Plan will set out a range of regulatory and non-regulatory interventions, measures and initiatives. It is envisaged that the Plan will raise awareness of PFAS in the environment, identify and address releases of harmful PFAS, and protect people and the environment from harm relating to PFAS exposure.
Addressing the issue of PFAS in the environment will take time given their embedded and historic use. In addition to the publication of the Plan, which will no doubt increase public awareness, the Health and Safety Executive’s consultation on the proposed restriction of PFAS in fire-fighting foams closes on 18 February 2026. We expect the response to the consultation to be published later in the year.
In the EIP, the EA is made responsible for providing advice, guidance and tools to support the management of PFAS at contaminated sites on an ongoing basis. As the awareness of PFAS grows, so too will the prospect of litigation for PFAS pollution and mismanagement.
Greenwashing
9. Continued scrutiny of environmental claims
Environmental claims are likely to continue to face scrutiny from the Competition and Markets Authority (CMA) and Advertising Standards Authority (ASA) to ensure compliance with the CMA’s Green Claims Code and the Advertising Codes. This is particularly the case considering the CMA’s new increased enforcement powers under the Digital Markets, Competition and Consumers Act 2024, which are set out in this article.
Throughout 2025, the ASA published several rulings concerning advertisements which breached Section 11 of the CAP Code (which contains rules specifically relating to environmental claims). Given that the ASA’s recent strategy specifically states that it will continue to focus on misleading green claims, we expect more rulings banning advertisements for a breach of Section 11 of the CAP Code to be published in 2026. The ever-improving capabilities of the ASA’s Active Ad Monitoring system and the shift in its focus towards proactive regulation, rather than solely complaints-based enforcement, mean it is more important than ever that marketers making environmental claims continue to ensure those claims comply with the requirements of the Advertising Codes, the Green Claims Code, and the CMA’s general guidance on unfair commercial practices.
Deforestation and supply chain due diligence
10. Launch of due diligence requirements for forest risk commodities
As explained in our 2025 predictions, the implementation of a forest risk commodities regime in Great Britain would prohibit certain businesses from using specified commodities (cocoa, palm oil, soy and non-dairy cattle products), and impose due diligence requirements to ensure the full traceability of supply chains. The Environment Act 2021 contains enabling powers for the regime, but the regime has yet to be brought into force.
In a letter to the Chair of the House of Commons’ Environmental Audit Committee in June 2025, Defra stated that its approach to ensure that UK consumption of forest risk commodities was not driving deforestation would be set out in due course. This was repeated in the EIP.
It remains to be seen if, and when, the government will introduce secondary legislation to bring the regime into force. The application of the EU Deforestation-free Products Regulation (2023/1115), which applies in Northern Ireland, has been postponed to December 2026 for large and medium sized undertakings, and to June 2027 for micro and small undertakings.