Environmental Weekly News Round Up - 8th March 2024

Welcome to the latest edition of our weekly Environment Law news update. As ever, we bring you developments, insights, and analysis in the world of environmental law. Also, in this occasion our Environmental Insight section addresses the implications of BNG in the education sector.

NEWS ROUND UP

Spring Budget 2024 – Key Energy and Environment Announcements

On Wednesday 6 March 2024, Jeremy Hunt presented his Spring Budget to Parliament. Irwin Mitchell’s specialist have recently shared their overview of the implications of this budget on their publication “Budget 2024: Planning, Environment and Renewable Energy”. 

Below we provide a list of the most relevant announcements brought up during the speech.

In relation to funding, additional funding was announced for the following in respect of the energy and environment sector: 

1. An additional £120m will be awarded to the Green Industries Growth Accelerator, which is an initiative aimed to support low carbon manufacturing chains across the UK in order to accelerate the transition to net zero. 
2. Funding for round 6 of the Contracts for Difference has been set at a new high for a single round of funding at £1bn. The purpose of the scheme is to provide investment into developing new renewable technology seeking to produce low carbon electricity. 
3. The automotive industry has received a further £2bn investment to help reach the goals under the Auto2030 programme which aims to support zero emission vehicles manufacturing and their supply chains. 
4. The aerospace is also set to receive a £975m investment across 5 years from 2025. This funding will be allocated to the Aerospace Technology Institute programme. 
5. The government plans to deliver over £600bn of planned public sector infrastructure investment over the next 5 years to support energy security and as part of the necessary developments to reach net zero. 

Further measures were also announced by the government, including:

1. ESG ratings providers in the UK are now set to be regulated where assessments of ESG factors can be used for investment decisions and to influence capital allocation. Regulation will be governed by the Financial Conduct Authority following the results of a consultation back in 2023. 
2. In respect of nuclear energy, the government is committed to exploring a further large-scale reactor project, with Great British Nuclear running a competitive process for the selection of Small Modular Reactors and a £160m deal being reached with Hitachi to purchase two sites in Anglesey and Gloucestershire – although no decision has yet been taken on these projects. 
3. The Energy Profits Levy has been extended until the end of March 2029 which should raise an additional £1.5bn by collecting shares of profits from the largest oil and gas producers. However, this levy is set to terminate early if oil and gas prices do not remain at their current high and drop below those set in the Energy Security Investment Mechanism before then. 
4. Confirmation that from 1 January 2027, a Carbon Border Adjustment Mechanism (CBAM) scheme will be introduce, which will see a tariff applied to on imported carbon intensive products such as aluminium, cement, fertiliser, glass, iron and steel. The government estimates this could raise around £365m by 2029. 
5. A series of measures are to be introduced in an attempt to reform what it describes as the UK’s inefficient planning system and poor electricity grid connection times. Measures include; new stringent connections process from January 2025, taskforce into ADR mechanisms when disputes arise between landowners and electricity network operators, new consultations and measures to constrain the use of extension of time agreements. 

High Court rules on M&S case regarding embodied carbon

The High Court released its ruling on Marks and Spencer plc v Secretary of State for Levelling Up, Housing and Communities [2024] EWHC 452 (Admin) in which it quashed the decision of the Secretary of State (“SoS”) for Levelling Up, Housing and Communities to refuse plans for the demolition and rebuilding of Marks & Spencer's flagship Oxford Street store.

The case revolved around the redevelopment of the flagship store. In June 2021, M&S submitted a planning application for or the demolition of the three-existing buildings on site and the construction of a nine-storey mixed use development comprising retail, café/restaurant, office and gym space. The council’s officers recommended approval despite concerns of heritage impacts. However, in 2022 the SoS called-in the application and decided to refuse it on the grounds of heritage impacts and carbon impacts due to the release of embodied carbon by demolition.

M&S challenged the decision on six grounds. The fifth ground related to the considerations on embodied carbon.

The relevant policy in respect for embodied carbon for this matter was the London Plan’s policy SI 2 “Minimising greenhouse gas emissions”. The SoS had relied on this policy and concluded that the carbon offsetting requirements were applicable to embodied carbon. However, the High Court considered that the wording of this policy was directed strictly to “operational carbon” only, not to embodied carbon. The reasoning of the court was based on the policy’s express reference to building regulations. According to the court, his reference “necessarily includes a calculation based on the energy efficiency of the building in its operational phase, not the construction carbon impacts.” Therefore, this reference made it clear beyond any doubt that the policy was not concerned with any construction impacts.

The ruling will mainly affect to developments to which the London Plan’s policy SI 2 applies, but also serves as a reminder that while embodied carbon can be a material consideration, planning authorities must make sure that their application is backed up by wording of the relevant policies. In any case, this should be considered as a call to the government for greater policy and regulatory clarity on the issue of embodied carbon.

Environmental Promises vs. Policy Paralysis: The DRS Dilemma in the UK 

The UK government’s ambitious plan to combat plastic pollution through a Deposit Return Scheme (“DRS”) has encountered significant hurdles, leading to what now seems to be an indefinite postponement.

Originally set to launch in 2023, the scheme aimed at incentivising recycling among consumers by offering a cash return on bottles and cans has seen its start date pushed back repeatedly with the latest projections suggesting a delay ranging between 2026 to 2028.

It is alleged that the DRS which was a cornerstone of DEFRA’s environmental policy has been stalled due to a series of disagreements and logistical challenges. Key among these is the contention between the devolved governments over the inclusion of glass in the scheme, alongside plastic containers. This discord has significantly contributed to the postponement, leaving stakeholders and environmental groups frustrated.

Environmental groups have pointed out that there has been rapid implementation of similar schemes in other countries citing this as evidence of the UK’s lagging commitment to combating plastic pollution. For instance Ireland swiftly launched a comparable deposit return initiative within two years of its announcement to implement the scheme which underscored the feasible pace of adopting such policies.

Surfers against Sewage have highlighted the environmental impact of postponement noting the continued pollution from billions of containers annually leaching into the environment, choking our rivers and seas. It also has said that “It’s time the government stopped pandering to the industry lobbyists and took a stand for people and the planet”. Greenpeace UK has also criticised the delay as undermining the UK government’s claim to be a world leader in tackling plastic pollution, particularly ahead of crucial negotiations for a global treaty on plastic reduction.

However, despite these setbacks DEFRA remains insistent on its commitment to waste reduction and the DRS emphasising ongoing dialogue with the industry to refine the scheme. Industry sources have revealed that the feasibility of the initially revised start dates has been challenged with calls for a fundamental rethink of the scheme’s implementation strategy. Supermarket leaders and the Association of Convenience Stores have voiced concerns over the scheme’s financial implications and the need for adequate preparation time urging a reconsideration of the timeline.

As the UK government continues to grapple with the complexities of implementing DRS, the call for a balanced approach that accommodates environmental ambitions without imposing undue burdens on the industry appears to grow ever louder. The UK government faces the challenge of aligning its environmental policies with the practical realities of ensuring that when the DRS is finally launched it is both effective and sustainable and without compromising the interests of consumers, retailers and the broader industry.

Chris Packham’s judicial review against the Government gets permission to proceed to the High Court 

In December 2023, Chris Packham filed a legal challenge against the government’s decision to delay a series of green pledges, including their decision to remove the time limit on phasing out petrol and diesel cars and vans. We covered the submission of this challenge in a previous round-up. 

This week, Chris Packham’s claim has been given permission to proceed to a substantive hearing. The High Court is therefore expected to hear the case later this year. 

Chris Packham has described the government’s decision to abandon the relevant green pledges as “reckless and dangerous”. 

The claim has been given permission to proceed on the following three grounds:

1. The government have a continuing duty to have policies in place to ensure they can meet their commitments under the Climate Change Act and so it is unlawful for key policies to be removed from the Carbon Budget Delivery Plan without having replacement policies in place to ensure the targets can be met. 
2. The government failed to take relevant and mandatory considerations into account when deciding to withdraw the policies, including the impact of their decision on net zero targets and advice from the Climate Change Committee. 
3. The public and key stakeholders should have been consulted before the policies were withdrawn. It is also alleged the government failed to consider previous consultation responses when making their decision. 

A Department for Energy Security and Net Zero spokesperson said: “We are committed to meeting our legal net zero commitments and families will now have more time to make the transition, saving some people thousands of pounds at a time when cost of living is high.”

ENVIRONMENTAL INSIGHT

Implications of BNG in the education sector

The Biodiversity Net Gain (“BNG”) regulatory framework came into effect on 12 February 2024. This means there is a mandatory legal requirement for most planning applications to provide a 10% increase in biodiversity.

Elizabeth Mutter, solicitor of our Planning and Environmental Team, discusses this how the BNG framework will impact on the education sector, including schools and colleges. The full article is available here.

Read more about our Environment and Planning expertise.