On 26 August 2025, the Department for Environment, Food and Rural Affairs (DEFRA) launched a consultation to reform how industrial activities are regulated in England. DEFRA is also working alongside Scotland, Wales and Northern Ireland, so similar changes are likely to take place in those administrations. The consultation excludes waste operations, mining waste operations, radioactive substances activities, water discharge activities, groundwater activities and flood risk activities from reform.
It focuses on industrial emission regulation; including installations, medium combustion plants and specified generators, as well a small waste incineration plants, solvent emission activities, Part B mobile plants and mobile medium combustion plants. These reforms are motivated by the government’s push for a net zero transition and circular economy ambitions the industry is likely to move away from fossil fuel to low carbon alternatives, making the current permitting system less fit for purpose.
We set out below the main strategic goals of the proposed reforms.
Sparking Innovation
The main driver for change is modernising the environmental permitting regime in England, which is considered to being holding back industrial transformation and economic growth in innovative and low risk sectors.
For example, the proposals advocate for greater freedom for research and development (R&D) by creating regulatory sandboxes that trials could operate in and be monitored for environmental harm while waiving traditional permit conditions. Commercial confidentiality during these R&D trials could be protected from some of the legal requirements for public disclosures of information. Industry has lobbied to protect information on emissions during R&D that could allow them to derive compositions of proprietary products. DEFRA is considering whether information on emissions that are not harmful to the environment could be kept confidential during trials, or whether information on emissions could be disclosed in another format.
There will be a focus on publishing Guidance on Emerging Techniques (GET) – such as the recent GETs on post-combustion carbon capture and hydrogen production by electrolysis of waste to guide the permitting regulator to better understand and assess new technologies.
England is also wishing to align with the EU to provide 30 months temporary derogations related to meeting best available techniques (BAT) for emerging techniques rather than the current nine months.
Increasing the Agility of Standards
Pollution standards for industry sectors take a long time to be established and they need to be updated periodically as industry develops. However, any changes to BAT need to go through a long legislative process that slows down innovation and sectorial development. The consultation is seeking views on how the standard setting process could be sped up and suggests creating a duty on the regulator to update BAT.
DEFRA believes that standards should be set for industry categories, which would allow any regulatory gaps to be plugged. For example, currently for the category of Part B installations, only air emission standards are regulated, which leaves other environmental impacts unregulated.
There are also proposals to make sure that BAT focuses on energy efficiency and resource efficiency standards, which are becoming more relevant to the world of net zero and the circular economy rather than solely on impacts on water, land and the environment.
Proportionate and Coherent Regulation
DEFRA wishes to make permitting regulations appropriate for the risk profile of the industry and/or installation. Although this should have always been the case, some well understood new low risk technologies, such as green hydrogen or back up generators, are over regulated and there is a proposal to ensure that regulation is aligned with risk.
There is also a proposal to have a tiered permitting system giving the Environment Agency (EA) the power to decide whether instead of a low-risk activity being permitted, they should be either a registered exemption or a non-registered exemption.
The consultation gives various examples of activities that are not regulated, and which need to be considered as part of a coherent regulatory approach. For example, carbon capture for geological storage is regulated under the permitting regulations, but carbon capture for utilisation and carbon capture technologies such as direct air caron capture carry similar risk, but are not regulated. Battery energy storage is a key technology for the UK, but fire risk is not adequately regulated through the permitting systems. Smaller combustion plants could also see more regulation.
Creating a More Efficient Permitting Regulator
It has not gone without notice that the permitting regulator has been understaffed for several years now, causing delays to transactions and industrial activities due to long waits on permit applications, transfers and surrenders. Expediency may come at a higher cost and if permitting charges are increased, they will need to be proportionate, in particular with the government’s commitment to cut administrative costs for businesses by 25%, by the end of this Parliament.
The EA is rolling out a permitting transformation programme that is expected to improve digitalising permitting and speed up the process. Proposed reforms here include – giving outline planning approval to derisk earlier investment; flexible permits that do not set emission limits for each technology at a site, but permits that set out a cap of emissions for clusters; and greater alignment of permitting air regulation and local air quality management, as well as standards comparable to the British Standards Institute with BAT.
In order to fund some of these changes and the current backlogs the EA and local authorities will need more resources, and it is proposed that they charge for more of their activities.
Increasing Transparency
The UK Pollutant Release and Transfer Register (UK PRTR) sets out air emission permitted data, but it requires reform. It is proposed that thresholds will be lowered for reporting and new reporting requirements introduced for substances of high concern that are not currently captured on UK PRTR, such as per- and polyfluoroalkyl substances (PFAS).
Conclusion
We await the results of the consultation, but the proposed permitting reforms have the potential to propel innovation – for example by focusing less resources on less risky technologies and speeding up R&D by allowing sandboxes without requiring permit variations at site level.
Many datacentre developers will welcome the proposal to simplify permitting of backup generators at data centres, but others such as battery energy storage systems, battery manufacturing and non-waste anaerobic digestion are likely to see new regulation. There is currently an opportunity to influence the regulator in those areas, which should not be missed.
Industry in general will certainly welcome any increased expediency in dealing with permit applications, including transfers. The current delays have the potential to derail deals and cause investors to move away from the UK.
