Manufacturing and supply chain

Industry news

The UK government has announced a £50 million investment package to strengthen domestic supply chains for critical minerals used in products such as smartphones, electric vehicle batteries and household appliances. The funding makes up part of the UK’s Critical Minerals Strategy, which aims to support British companies in extracting, processing and recycling critical minerals, and to invest in manufacturing capability and attract private investment.

The UK government’s Office for Science has published a new Foresight report on supply chain risk and resilience. The report offers key findings which show how supply chain vulnerability and resilience come from complex system dynamics, and why an evidence‑based understanding of network structures, geopolitical realities, and climate and environmental pressures is essential for policy and strategy. It aims to support flexible policy making and plausible future pathways for long-term resilience.

In related news, the government has launched a new Supply Chain Centre – a central hub for supply chain intelligence and policy. The aim is to strengthen national resilience at a time of increasing global disruptions, geopolitical fragmentation, climate impacts and technological change. In the Supply Chain Centre mission statement and action plan, there are specific objectives for Industrial Strategy manufacturers.

The Manufacturer has reported (15 May 2026) that robotics and automation specialist, OAL, has secured a £5m Innovation Loan from Innovate UK to deploy over 1,000 robotic systems in the food manufacturing industry by 2030 to address labour shortages.

Make UK has published its latest Manufacturing Outlook 2026 Q2, highlighting continued pressure from labour, energy and material costs, whilst reporting that many manufacturers remain focused on productivity improvements, automation, investment and long-term growth.

The government’s long-awaited Defence Investment Plan, announced today by Keir Starmer, has now been published. See this link for the full document, a four-page summary and a funding explainer. Click here to find out about our expertise in the defence sector.

A major food manufacturing business, Kismet Kebabs Ltd, has been fined £500,000 following a prosecution relating to products marketed and sold as lamb doner kebabs. The case followed a Trading Standards investigation which found significant differences between labelled ingredients and actual product content. The prosecution serves as a reminder of the importance of robust supplier assurance, traceability, product specification management and quality control procedures across manufacturing supply chains, particularly where consumer trust and brand reputation are at stake.

The European Commission is consulting on the operation of the digital product passport registry under the Ecodesign Regulation 2024. Digital product passports are designed to give easy access to digital information relating to a product’s sustainability, circularity and legal compliance. The proposed draft implementing regulation would require economic operators and value-chain actors to digitally register product passports, with automatic checks on mandatory data and electronic signatures. The registry would apply across all products subject to the regulation, including batteries, toys, detergents and construction materials.

PFAs in the supply chain

We’ve reported previously on the growing focus on PFAS in the supply chain. As part of its updated Environmental Improvement Plan (EIP) 2025, the UK government published its first-ever comprehensive plan to manage and reduce the risks from PFAS. A House of Commons Environmental Audit Committee PFAS inquiry has now found that the government hasn’t applied the ‘polluter pays’ principle well enough to deter future PFAS emissions, nor has it allocated enough funding to tackle PFAS remediation.

Significant and wide-ranging recommendations non-exhaustively include: reform UK REACH by March 2027 to avoid further delay in restricting PFAS; adopt an essential‑use approach to regulating PFAS; bring forward restrictions on PFAS in non‑essential consumer products (e.g. food packaging, cookware and school uniforms) without delay and begin a phased restriction from 2027; set limits on the levels and types of PFAS allowed in food; consult on mandatory PFAS disclosures across supply chains within six months, requiring manufacturers and importers to report the presence and purpose of PFAS in products placed on the UK market to support safe handling and disposal; apply the polluter pays principle to stop ongoing and historic PFAS contamination; consult by March 2027 on establishing a PFAS Remediation Fund; consider an emissions levy for PFAS on the UK REACH candidate list; and consider extending the polluter pays principle to products manufactured overseas and imported into the UK.

This highly topical issue remains ‘one to watch’.

Sustainability reporting and strategy

The EU’s ban on destroying unsold clothing, clothing accessories and footwear is now in effect. Under the EU Ecodesign for Sustainable Products Regulation (ESPR), companies must publicly disclose what they discard. Manufacturers, importers and distributors operating in the EU must now comply with significant sustainability requirements. Click here for more information on the ESPR.

The European Parliament and Council of the EU have reached political agreement on a package to simplify business compliance rules for ‘small mid cap’ enterprises and to digitalise EU product compliance rules. The new SMC category will cover companies with under 1,000 employees and up to €200m turnover or €172m assets. SMCs will benefit from existing SME regulatory easements across areas such as GDPR record-keeping, prospectus rules, and certain sectoral regimes; and a ‘digital by default’ approach to product documentation, some instructions and mandatory electronic communication, and data sharing between businesses and authorities. The rules will now be formally put to vote.

We’ve reported previously on the Corporate Sustainability Due Diligence Directive (CSDDD). The European Commission has now launched a public consultation, open until 24 July 2026, to inform forthcoming guidelines on implementing the CSDD. Manufacturing businesses may want to engage to help standards affecting risk management, supply chains and contractual arrangements.

The Department for Environment, Food & Rural Affairs (Defra) has published a policy paper outlining plans to introduce mandatory due diligence requirements addressing illegal deforestation in supply chains for businesses in Great Britain (GB). The EU Regulation on Deforestation-Free Products (EUDR) will be brought in across Northern Ireland in phases from 30 December 2026. Defra plans to launch a consultation later in 2026 on a proposed GB regime that will cover the same core commodities products (such as soy, palm oil, cocoa and rubber). The stated goal is to ultimately transition to a deforestation-free standard.

The EU’s End‑of‑Life Vehicles Regulation has been approved and will soon become law. It represents a significant shift from waste management rules to a full ‘design‑to‑recycling’ regime. For UK manufacturers, the impact will be driven less by direct legal obligation, and more by market access and supply‑chain alignment with the EU.

New rules setting out the circumstances in which businesses may destroy unsold consumer products take effect from 19 July 2026 for large enterprises and from 19 July 2030 for medium-sized enterprises.

The European Commission has published guidance and accompanying FAQs to support the consistent rollout of the Packaging and Packaging Waste Regulation (PPWR) across the EU. The PPWR begins to apply from August 2026. It covers all packaging placed on the EU market, regardless of material or origin.

Ethical labour and governance

The Crown Prosecution Service has published its Serious and Economic Organised Crime Strategy 2030, which explicitly addresses modern slavery, criminal exploitation and human trafficking. The CPS has committed to delivering updated modern slavery training to show emerging issues, and to sharing best practice and encouraging closer engagement with policing. Businesses should ensure defensible supply chain due diligence to embed ethical labour.

The European Commission has published Guidelines on the EU Forced Labour Regulation, which applies from 14 December 2027. The Regulation bans economic operators from placing or making available on the EU market, or exporting from the EU, products made with forced labour, whether inside or outside the EU. The Regulation applies to all products across all sectors and geographies. It includes agricultural products and minerals and other raw materials. The Regulation doesn’t impose mandatory due diligence obligations but refers to the OECD six-step due diligence framework as an appropriate benchmark for businesses looking to understand and ensure compliance. The Commission’s Forced Labour Single Portal should also help businesses comply. Although the EU Forced Labour Regulation won’t apply until December 2027, businesses with EU-facing supply chains should think about using the implementation period to strengthen supplier due diligence, risk assessments, contractual controls and traceability systems.

The Crown Court has approved a deferred prosecution agreement (DPA) between the Serious Fraud Office (SFO) and Ultra Electronics Holdings Ltd (UEH), a British manufacturer of electronic systems for the international defence and aerospace market. The DPA relates to the company’s failure to prevent bribery and requires UEH to pay a £10 million financial penalty and £4.8 million in SFO investigation costs within 30 days. The company must also provide yearly reports for the next three years to show the effectiveness of its anti-bribery and compliance programme, and comply with strict conditions while showing genuine and sustained reform under court scrutiny.

Supply chain and renewables

The EU has blocked public funding for Chinese providers of a key technology used to install solar panels and other energy infrastructure, citing security concerns. Global Banking & Finance Review has reported industry concerns that the ban could slow or even stop the rollout of solar and wind projects in poorer European countries.

UK nuclear technology developer Rolls-Royce SMR has been selected to deliver three small modular reactors (SMRs) for a major new nuclear power project in Sweden. It’s a significant export success for British manufacturing and engineering expertise and should create opportunities across the UK supply chain.

Commercial

With new ‘prompt payment’ rules intended to protect small businesses, the government has announced that companies that fail to pay suppliers within 60 days will face fines or automatic interest payments. Boards will also be required to report on payment terms and measures to improve performance.

The UK government has set out proposals for reforms to the Energy Performance Certificate (EPC) scheme for non-residential property. Plans for raising the standard are limited to larger premises, but this may affect many manufacturing and supply chain businesses. The government proposes that from 2031, rented premises over 1,000 sq m will need to have a minimum EPC rating of B or higher. This change will require secondary legislation, so it’s one to keep an eye on.

New regulations, in force from 13 May 2026, introduce a new criminal offence of exporting sanctioned goods at risk of diversion and make several changes to sanctions licensing across 36 UK sanctions regimes. See here for UK government compliance guidance for businesses.

The Health and Safety Executive (HSE) is considering consultation responses on amending the Great Britain Classification, Labelling and Packaging of chemical substances (CLP) Regulation to align the GB and Northern Ireland regimes and protect the UK Internal Market. The consultation, which opened after our last Manufacturing Horizon Scanner and has closed since, sought views on the potential business impacts of incorporating certain recent EU CLP measures into the GB Regulation. The consultation will affect manufacturers, importers, downstream users and distributors in Great Britain and Northern Ireland. It focuses on potential impacts arising from new EU hazard classes, rules on refill stations, and changes to digital labelling requirements. We’ll monitor and report key developments.

Our Intellectual Property, Trade Marks & Design team has recently published its new Intellectual Property Matters ‘headlines’ publication, along with a suite of IP-related legal briefings, many of which will be of interest to manufacturing and supply chain businesses.

Logistics

Logistics news 

Amazon’s LTL (Less-Than-Truckload) service lets businesses ship smaller pallet loads by sharing truck space with other shippers. Businesses pay for the exact trailer space used, without needing to book an entire truck. There could be impacts on the wider logistics warehousing market and other LTL transportation providers.

Savills has published ‘People, power and politics – what’s currently shaping UK industrial & logistics?‘, a podcast looking at the outlook for the UK’s industrial and logistics market; the impact of geopolitical events on occupiers’, investors’, and developers’ strategies; and how automation, planning, labour and power are shaping the sector.

Montagu Evans has reported that the recent geopolitical climate may result in higher warehouse demand in the UK, as firms look to store larger inventories onshore.

Logistics UK has published its annual Logistics Report 2026, reviewing current trends across the sector. The report highlights continuing disruption linked to conflict in the Middle East, rising costs and policy shifts, alongside ongoing challenges around connectivity, efficiency, skills, decarbonisation and trade.

The Law Commission has published two consultation papers proposing far-reaching changes to commercial leasehold law in England and Wales. The papers cover modernising the 1954 Act, removing anti-avoidance barriers under the 1995 Act, and reform of first-refusal provisions in mixed use premises under the 1987 Act. The proposals aim to give a legal framework that better serves the needs of commercial occupiers. The consultations are open until 16 September 2026 and will be of interest for landlords and tenants operating on the high street and across the office, industrial and logistics sectors.

Financial pressure across transport and logistics remains one to watch. Trans.INFO has reported that 35 UK transport and logistics companies entered administration during 2026, with June the busiest month of the year so far. The figures cover the wider transport and logistics market, including road, rail, sea, air, warehousing, fulfilment and storage.

Road/rail strategy and freight infrastructure

The government has introduced digital ATA Carnets, replacing paper-based systems used for the temporary international movement of goods. Logistics UK said, “The measure will align the UK with international developments and support cross-border trade, updating the process and reducing burden.”

The government is consulting, until 9 September 2026, on the draft statement of safety principles for automated vehicles.

In related news, the government has laid new regulations that will limit the use of terms such as ‘self-driving’, ‘driverless’, ‘automated driving’ and ‘autonomous driving’ to vehicles that are officially authorised or listed as able to drive themselves safely and legally. The measures form part of the implementation of the Automated Vehicles Act 2024 and are there to prevent customers and vehicle users from being misled about a vehicle’s capabilities. The regulations are expected to come into force on 7 January 2027. Further details can be found here.

A report from the Institution of Mechanical Engineers has concluded that improving the accessibility of the UK’s transport network could give an annual £176.4bn boost to the economy, by enabling millions more people to access work, education and essential services.

The government has announced a reset of HS2. It includes revised costs of £87.7–£102.7 billion and significantly extended timelines, with full delivery expected in the early 2040s. The reset also includes changes aimed at reducing complexity and cost. HS2 won’t carry freight, but through release of capacity on the current rail network, it’s expected HS2 will add to extra freight paths and growth.

Decarbonisation

The Department for Transport is consulting, until 28 July 2026, on plans for a scheme to address high electricity network upgrade costs at motorway service areas in England. A suggested £190 million has been allocated for the scheme. It’s part of the £400 million to support EV charging infrastructure announced in the Spending Review covering 2026 to 2030.

As reported previously, the UK Carbon Border Adjustment Mechanism (CBAM) is due to come into force on 1 January 2027. It will apply to some imports from the iron and steel, aluminium, fertiliser, hydrogen and cement sectors. The government laid the first set of secondary legislation in July 2026, with further legislation on monitoring, reporting and verification of emissions, and more detailed guidance, expected later this year. Logistics providers and customers moving in-scope goods should expect greater focus on commodity codes, origin, emissions data and contractual allocation of compliance responsibility.

The EU has launched the Count Emissions EU framework: a voluntary, standardised system for calculating and reporting emissions from freight and wider transport. The framework aims to provide a more comparable emissions dataset across all transport modes, to tackle greenwashing or misleading claims around emissions. The regulation applies to transport operators who already fall into scope of emissions reporting in the EU (for example, companies who directly report, or whose customers report, to the Corporate Sustainability Reporting Directive (CSRD)), but otherwise can be used for reporting on a voluntary basis.

The UK government has set out plans for a new Low Carbon Fuels Fund (LCFF), building on the £198 million already allocated via the Advanced Fuels Fund. The LCFF will be aimed at supporting SAF production plants. In related news, the Department for Transport has begun a call for evidence, open until 28 July 2026, looking for evidence to help the government better understand global SAF supply projections, and how the decarbonisation benefits of the existing targets can be maximised.

The Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026  came into force on 1 July 2026. See this explanatory memorandum. They extend the scope of greenhouse gas emissions covered under the Climate Change Act 2008 to include international aviation emissions and international shipping emissions.

The Department for Transport has begun a consultation on plans to strengthen the regulation of In-use emissions of road vehicles, including requirements for vehicles to keep their original emissions standards throughout their operational life and restrictions on modifications that increase emissions. The proposals could have significant implications for vehicle operators, workshops and fleet maintenance practices.

Construction/development and real estate

Potentially a useful decision for landowners/developers, in Grossart v Ames [2026] UKUT 139 (LC), the Upper Tribunal (Lands Chamber) (UT) allowed discharge of a restrictive covenant preventing on the grounds it should be deemed obsolete (ground (a) of section 84(1) of the Law of Property Act 1925) because its original purpose had been met. The restriction was originally intended to preserve opportunities for future development by retaining control of the access road and services. Development of the retained land had been completed in the interim. (The UT was also satisfied that discharge/modification wouldn’t cause injury to the objector and didn’t secure practical benefits of substantial value or advantage to her).

The government has completed its guidance on how local authorities should prepare their next local plans under the new, revised procedure introduced by the Levelling up and Regeneration Act 2023. The government is pressing all local authorities to quickly prepare new local plans that accommodate the allocations needed to reach the government’s target of building 300,000 new houses a year.

The Environment Agency and Natural England have announced the launch of two analytical tools to help organisations identify where environmental, socio-economic and health pressures overlap in communities across England. The tools are meant to provide a consistent evidence base to support planning decisions, prioritise resources and inform more coordinated responses to environmental, social and health challenges.

The Considerate Constructors Scheme has announced changes to its assessment process. The new model adopts a percentage scoring system with equal weighting given to themes of community, environment and workforce. Changes include an increased focus on safety, social value, inclusivity and environmental preparedness.

The government is establishing a new register for documents that create contractual controls over land. It’s aimed at conditional contracts, option agreements and other similar arrangements under which someone who is not the registered proprietor controls what happens with the land. See our briefing for further information and advice.

Last year’s landmark Supreme Court ruling in Finch confirmed that applications for major developments should consider all significant direct and indirect greenhouse gas emissions. The Institute of Environmental and Sustainability Professionals has now launched updated guidance on how to assess the impact of greenhouse gas emissions from development projects, in light of Finch.

Defra has published the UK’s new Land Use Framework. The framework aims to support a more consistent spatial vision for England by aligning national and local plans. It looks to balance competing demands on land (housing, food production, energy infrastructure, and environmental goals) with safeguarding agricultural productivity. It commits to providing data and tools so planning decisions on housing and energy can be faster, clearer and more predictable.

Soil data is now freely accessible to all via the online National Soil Map. The resource should support free research and decision-making across agriculture, construction, conservation, climate science, hydrology, flood risk modelling and landscape management.

MHCLG has published a policy paper “Streamlining infrastructure planning: implementation plan”. It sets out key steps, based on the government’s September 2025 consultation, to streamline planning for Nationally Significant Infrastructure Projects (NSIPs). The plan is a delivery document for the Planning and Infrastructure Act 2025, confirming when revised guidance, secondary legislation and new Planning Inspectorate (PINS) services will be rolled out.

People in logistics

Logistics UK’s new Employment and Skills Report 2026 shows that workforce challenges in logistics have shifted from labour shortages to a deeper ‘capability gap’ – i.e. a growing mismatch between the skills employers need and those available in the workforce.

Several logistics and delivery operations across the UK have been affected by strike/industrial action during 2026. Check out our recent briefing for practical information and advice for employers.

Generation Logistics, in conjunction with Logistics UK member GXO, and the Department for Transport, has created a practical guide that explains how logistics employers should design and deliver work experience opportunities that support young people and strengthen future talent pipelines.

Implementation of the Employment Rights Act 2025 (ERA) will continue through 2026 and 2027. Several changes have already taken effect, including day one paternity and unpaid parental leave, changes to statutory sick pay and increased protections relating to industrial action. Logistics employers should keep workforce models, shift arrangements, absence processes and union engagement under review. To help, access our ERA tracker here, and see this Acas resource.