Welcome

Welcome to the latest edition of our quarterly horizon scanner. The purpose of this document is to keep you ahead of key legal and regulatory developments.

If you have any questions or require any more information, please contact us. If you would like to receive this and other similar updates direct to your inbox, please click the link here.

Jump to each section by clicking below:

1. Net Zero & industry news
2. Renewables, green energy & carbon capture, usage, and storage
3. Waste & resources
4. Construction & development
5. General & in-house legal

Net Zero & industry news

The King’s Speech (see Walker Morris’ briefing) made clear that the government is committed to a clean energy transition and securing energy independence. Key proposals include:

• Creation of a new Industrial Strategy Council and investment in cleaner, cheaper British energy.
• Creation of Great British Energy (GBE), a publicly owned clean energy company, to be headquartered in Scotland. GBE will help accelerate investment in renewable energies, such as offshore wind and will support the government’s aim to base the electricity system on clean energy by 2030.
• Launch of the National Wealth Fund, including £7.3bn investment in new industries and technologies to support growth and clean energy missions. See below for further information.
• Measures and infrastructure to double current onshore wind capacity, achieve a three- to four-fold increase in current offshore wind and solar capacity by 2030, and investment in carbon capture and storage.
• Introduction of rail reform legislation – in particular, to reform rail franchising and bring train operations into public ownership.

The government has already announced immediate reversal of the ‘de facto ban’ on onshore wind, to put it on the same footing as other energy development from a planning perspective.

The National Wealth Fund (NWF) will align public funding institutions and attract private investment, with the aim of boosting investment in national infrastructure projects such as ports, gigafactories and hydrogen and steel projects. The NWF will target three pounds of private investment for every one pound of public investment.

The government has announced a partnership between GBE and the Crown Estate. It claims up to £60 billion of private investment could be released to help secure riskier renewable investments, and ‘turbocharge’ energy independence.

In a joint interview with The Guardian (5 August 2024), the chief executive of Make UK and the general secretary of the TUC joined forces to warn the government that rapid action is required to launch a long-term industrial strategy.

The Climate Change Commission (CCC) has published its latest report on the UK’s progress towards cutting emissions. Key findings include: territorial emissions have fallen by more than half since 1990; the UK has overachieved its third Carbon Budget; the UK is not on track to hit its 2030 emissions reductions target; growth in market share of electric cars has stagnated for the first time; progress has slowed on offshore wind installations; heat pump installations need to increase substantially; tree planting and peatland restoration rates need to double; and the UK’s adaptation plans need to be strengthened. The CCC’s recommendations for the UK government for the coming year are set out at Annex 1.

A major initiative to help decarbonise the South West of England, the Midlands and West Wales has been launched. Energy advisory consultancy, Apollo, will conduct studies for the UK’s carbon capture and shipping hub 7CO2, focusing on rail, land, and power options. The studies will  contribute to the West of England LIDP report.

On 29 June 2024, the EU’s Net-Zero Industry Act entered into force, with the intention of establishing a framework for strengthening Europe’s net-zero technology manufacturing ecosystem.

The UK has formally notified its withdrawal from the Energy Charter Treaty (ECT), the multilateral treaty covering the energy sector. The treaty was designed to promote energy security through the operation of more open and competitive energy markets, but the UK’s withdrawal comes after a process to modernise the ECT has faltered. A number of EU Member States have also signalled their intention to withdraw. The UK’s withdrawal will take effect on 27 April 2025.

On 15 July 2024, the European Commission published guidance on the application of energy labelling requirements. The Energy Labelling Regulation 2017 require suppliers and retailers to refer to the energy efficiency of products on the label in visual advertisements or technical promotional material. The guidance applies to all products covered by the regulations. The requirements apply immediately, but the EC has suggested that it may avoid infringement action for 6 months (or 12 months in respect of pre-existing printed material).

The Department for Energy Security and Net Zero (DESNZ) has published an update to the full business case for the Green Heat Network Fund, which provides capital grant funding to support heat networks in adopting low and zero-carbon heat technologies as part of the Heat Networks Transformation Programme.

The BBC has reported (16 July 2024) that North Sea oil and gas operators have been warned by the North Sea Transition Authority to step up decommissioning, as it increases investigative and enforcement action in respect of delays and regulatory failures.

Conservation charity Oceana UK has sent a pre-action protocol letter to DESNZ, alleging that the decision to issue new licences for oil and gas exploration in the North Sea was unlawful. The letter signals the start of the judicial review process and alleges that the government ignored the advice of its statutory advisors when considering whether the new licences would harm marine protected areas.

The International Tribunal for the Law of the Sea has given an advisory opinion on climate change and international law. It offers clear conclusions on the obligations of states to prevent, reduce and control pollution of the marine environment, and to protect and preserve the marine environment.

The Environment Agency has launched a consultation, seeking views on the proposed updates to its enforcement and sanctions policy to include the UK Emissions Trading Scheme and Carbon Offsetting and Reduction Scheme for International Aviation. The consultation closed on 16 July 2024.

The Network for Greening the Financial System has published a report on emerging trends and lessons learned from climate-related litigation. It anticipates a growth in the number of nature-related cases.

Jump to each section by clicking below:

1. Net Zero & industry news
2. Renewables, green energy & carbon capture, usage, and storage
3. Waste & resources
4. Construction & development
5. General & in-house legal

Renewables, Green Energy & Carbon Capture, Usage, and Storage (CCUS)

As mentioned above, the new Labour government announced an immediate reversal of the de facto ban on onshore wind, to put it on the same footing as other energy development from a planning perspective. The changes effectively override much of the power afforded to local objectors with regards to new projects.

The new government also has wider proposals to support renewable energy development, together with consultation on bringing large onshore proposals within the Nationally Significant Infrastructure Project (NSIP) regime to support quick determination. These changes are proposed in the revised NPPF (now open for consultation until 24 September 2024).

BP is reportedly pausing new offshore wind projects and imposing a hiring freeze to placate investors unhappy with its low carbon strategy. The change in strategy marks a climb-down from former plans to become a net zero company by 2050 and mirrors a recent similar renewables retreat by Shell. Also in BP news, BP has raised its forecasts for oil and gas demand as its annual outlook shows renewable power sources such as wind and solar are failing to keep pace with global energy demand.

Within just a few days of office, new Energy Secretary Ed Miliband approved 3 huge solar farms on agricultural land, despite recommendations to the contrary from the planning inspectorate. Anecdotally, the energy generated by these 3 developments will equate to around two thirds of all solar energy generated in the UK in the last year. The existing policy framework and guidance for proposals for solar development on agricultural land has been criticised for being unwieldy and contradictory. A Written Ministerial Statement by the Secretary of State for Energy Security and Net Zero, dated 15 May 2024, is intended to provide guidance on balancing competing policies on energy and food security.

Shortly following Ed Miliband’s solar approvals, new planning minister Matthew Pennycock granted permission for a solar farm and battery storage scheme on green belt land after finding that the benefits, including a 136% biodiversity net gain, outweighed other harms.

North Herts Council is launching a pilot solar panel project as part of a commitment to be a net zero district by 2040. The pilot, which is partly funded by the government’s UK Shared Prosperity Fund, would see solar panels be installed on business premises for free.

The Welsh government has officially launched its new renewable energy company, Trydan Gwyrdd Cymru, for which plans were originally announced in 2022.  The company’s initial focuses are on delivering onshore wind projects and developing a minimum of 250MW of new renewable energy generation capacity by 2030 and an additional 750MW of new capacity by 2040 (subject to grid capacity)

Also in Wales, the Welsh government has published its Heat Strategy for Wales, which supports aspirations for a net zero public sector by 2030 and the decarbonisation of homes, industry and businesses in Wales 2050.

UK Power Network has announced launch of a new service to help new renewable energy providers with more data and support through the connections process, via an Advanced Curtailment Report, which will help inform decisions about how and where to locate new energy assets.

The European Court of Auditors has said that the EU’s targets for establishing hydrogen as a clean fuel by 2030 are unrealistic. The report notes that the European Commission didn’t set targets for low carbon hydrogen, opening the debate for allowing low carbon hydrogen to count. The definition of low carbon to be used by the EC is due to be published later in 2024.

On 8 May 2024, the UK government announced plans to award £196 million to Urenco to build a new uranium enrichment facility in the UK. The new high-tech nuclear fuel facility will be the first in Europe and forms part of the government’s plans to boost Europe’s energy security, decarbonise the economy, reduce energy bills and create new jobs.

Also in relation to nuclear, the government is exploring building a major nuclear power station (similar in scale to Hinkley in Somerset and Sizewell in Suffolk) at Wylfa in Anglesey, North Wales.

Despite lack of mention of nuclear ambitions in the July 2024 King’s Speech, new Energy Secretary Ed Miliband has confirmed his “absolute support” for and commitment to the previous government’s plans and timetabling for construction of a fleet of small modular reactors around the UK.

The Supreme Court has refused permission for Together Against Sizewell C (TASC) to further challenge the granting of the development consent order for the Sizewell C new nuclear power station.  The Supreme Court’s decision is the final determination of TASC’s claim and should now enable the project to proceed.

An environmental scientist has launched a legal challenge against the energy secretary’s decision to approve a carbon capture project in Teesside, claiming the scheme would see significantly more greenhouse gas emissions produced than originally predicted.

On 6 August 2024, the Subsidy Advice Unit published its report on a request from DESNZ concerning the proposed CCUS Transport and Storage Regulatory Investment Model Support scheme.

A Stanford University research group has discovered a way of storing electrical energy in liquid fuels. The development could be a major boost for transitioning to renewable energy sources.

Wales & West Utilities and Ofgen are conducting a study exploring how hydrogen refuelling stations can be integrated into the UK’s existing gas network. The research will consider infrastructure solutions which increase the viability of hydrogen Fuel Cell Electric Vehicles as a sustainable alternative to traditional petrol and diesel vehicles. The report’s insights into the economics of implementing the technology, and how it will impact consumers in a future transition, should point the way for gas distribution networks to work with hydrogen producers and refuelling infrastructure providers.

Reuters has reported (12 July 2024) that International Battery Metals has become the first company to commercially produce lithium with a novel type of filtration technology, which is expected to usher in cheaper and faster supplies of the electric-vehicle battery metal.

Acorn is joint venture project, involving Storegga, Shell UK, Harbour Energy, North Sea Midstream Partners and National Gas Transmission’s SCO₂T Connect Project that aims to capture, transport and safely store CO2 emissions. £2 million from the Scottish government will be used to explore how a pipeline could transport carbon dioxide from Scotland’s central belt to its North East.

Jump to each section by clicking below:

1. Net Zero & industry news
2. Renewables, green energy & carbon capture, usage, and storage
3. Waste & resources
4. Construction & development
5. General & in-house legal

Waste & resources

The government has mooted the inclusion of landfill emissions within the UK Emissions Trading Scheme, as part of a consultation on expanding the scheme to include waste incineration.

Campaigners have launched a statutory nuisance complaint over sewage discharges into lake Windermere, in what they say is the first complaint of its kind in the UK against a water company.

On 16 July 2024, Ofwat announced that all wastewater companies in England and Wales are now under investigation.

The Information Commissioner has called on water companies to proactively disclose sewage discharge information to customers on a monthly basis. The call follows a recent case which emphasised the public interest in disclosure, and found that a legal exception covering the release of information which may prejudice an investigation didn’t apply to prevent disclosure of requested information concerning sewage collection and treatment infrastructure.

The Supreme Court’s decision in Manchester Ship Canal v United Utilities Water is the latest example of the courts finding flexibility within the law to facilitate environmental protection. The decision is set against a backdrop of increased focus on the state of the UK’s waterways. In finding that the canal owner can pursue a private nuisance claim against the statutory undertaker, the Supreme Court’s decision could prompt claims against water companies and investment in improved water infrastructure. The case could potentially have implications for nuisance claims against other statutory undertakers. See Walker Morris’ briefing.

Jump to each section by clicking below:

1. Net Zero & industry news
2. Renewables, green energy & carbon capture, usage, and storage
3. Waste & resources
4. Construction & development
5. General & in-house legal

Construction & development

Walker Morris has published Planning for the future, a look at the key planning related sections of the Labour manifesto and what we can expect in the next few years under the Labour Party.

The Times (22 July 2024) has reported that the new Labour government will change nutrient neutrality rules via the forthcoming Planning and Infrastructure Bill. It said the government will propose that developers will be allowed to begin work and agree to environmental mitigation measures during construction, rather than beforehand, and that new homes will only be occupied once the mitigations were in place. The plans should speed up development without compromising the environment.

The Department for Levelling Up, Housing & Communities has been renamed as the Ministry of Housing, Communities & Local Government (MHCLG), removing what the new government described as a “slogan” from the previous administration.

The Investment Property Forum has published a report on costing energy efficiency improvements in commercial buildings.

A new RICS Rights of Light Protocol provides a process to help developers resolve potential rights to light issues quickly and cost effectively.

In R (on the application of Finch on behalf of the Weald Action Group) (Appellant) v Surrey County Council and others (Respondents) [2024] UKSC 20, the Supreme Court has held that, in the context of a planning application to retain and expand an existing onshore oil well site enabling the production of hydrocarbons (i.e. a project of crude oil extraction for commercial purposes), it was unlawful for the Council not to require the environmental impact assessment to include assessment of the impacts of downstream greenhouse gas emissions resulting from the eventual use of the refined products of the extracted oil.

The Court of Appeal has confirmed the landmark High Court judgment in C G Fry v Secretary of State for Levelling Up, stating that government rules aiming to mitigate the impact of nutrient pollution on protected waterways do apply to the final discharge of planning conditions as well as earlier consenting stages.

The Department for the Environment, Food and Rural Affairs (DEFRA) has published a list of a substantial number of waste water treatment works which it is requiring the relevant local water company to upgrade to meet nutrient pollution standards by April 2030. DEFRA has also stated that local planning authorities, in considering current and future planning applications, will be required to assume that these works will be completed on time and in full. This should avoid planning applications being refused due to questions regarding the local capacity for dealing with nutrient migration from new developments.

The Planning Inspectorate has published a 2024 Pre-application Prospectus, which sets out the details of the proposed new NSIP operational reform pre-application service. The Prospectus provides greater detail on: introduction of three pre-application tier options reflecting different levels of service that applicants may receive ahead of submitting an application; introduction of pre-application fees; and introduction of a ‘Fast Track’ procedure which will allow some applications to potentially receive a decision within 12 months. The Prospectus was published alongside an FAQ paper, guidance on the Fast Track process, and updated guidance on the pre-application stage.

On 24 May 2024, the National Networks national policy statement was designated. It sets out the need for development of nationally significant road, rail and strategic rail freight interchange projects and how applications for national network projects will be assessed.

The Supreme Court has revisited the law of nuisance in the latest Japanese Knotweed case. In this briefing, Walker Morris offers practical advice for landowners, occupiers and investors.

The British Property Federation (BPF) has called for action on Minimum Energy Efficiency Standards. Members of the Green Property Alliance, including the BPF, are calling for the government to provide details on energy performance certificate targets, timelines and clarify the rules around exemptions and enforcement that investors need to commit their capital to making the improvements that are necessary to reach net zero.

3D printing technology has been around for some time, but it could be the next big thing in construction and manufacturing. New research shows that the 3D printing in construction market is expected to grow at a compound annual growth rate of 90.1% during the forecast period of 2024 to 2032, propelled by technological advancements, cost efficiency, and sustainability. Precedence Research predicts that the 3D printing in construction market will grow to $519.49 billion by 2032. In manufacturing, 3D printing can be used (non-exhaustively) for everything from multi-material, full-colour prototypes to production line tooling and final end-use parts. In real estate development, it’s being used for everything from pre-planning design and modelling to robotic arms and even ground-up concrete foundation and layer construction.

Jump to each section by clicking below:

1. Net Zero & industry news
2. Renewables, green energy & carbon capture, usage, and storage
3. Waste & resources
4. Construction & development
5. General & in-house legal

General & in-house legal

Corporate and corporate reporting

The Task Force on Nature-related Financial Disclosures (TNFD) announced a 30% increase in adopters of their corporate reporting recommendations since January and released a suite of sector-specific guidance to support reporting. New sector guidance covers aquaculture, biotechnology and pharmaceuticals, chemicals, electric utilities and power generators, food and agriculture, forestry and paper, metals and mining, as well as oil and gas. The TNFD has also published guidance to help banks, re/insurance companies, asset managers and owners, and development finance institutions apply its recommended disclosures.

The International Sustainability Standards Board (ISSB) has published its feedback statement for 2024 on the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards. The plans aim to support the application of disclosure requirements under IFRS S2, Climate-related disclosures, and decrease fragmentation of information in the market. During the next 2 years, the ISBB will deliver further harmonisation of the sustainability disclosure landscape as it embarks on a new work plan. See this press release.

The Financial Conduct Authority’s (FCA) anti-greenwashing rule came into force in the UK on 31 May 2024. This is the first part of the FCA’s Sustainability Disclosure Requirements. For more information on greenwashing, see here.

The FCA has updated its webpage on the sustainability disclosure and labelling regime, with information for firms on how to notify the regulator about their use of an investment label for a fund.

The government has published a policy paper on the framework and terms of reference for the development of UK Sustainability Reporting Standards, and an update on the government’s wider work programme to develop a Sustainability Disclosure Requirements regime in the UK.

The deadline for the EU Commission to publish certain reporting standards under the EU Corporate Sustainability Reporting Directive (CSRD) has been delayed from 30 June 2024 to 30 June 2026. The CSRD, which came into force in January 2023, sets out disclosures for companies to include in their annual report in relation to sustainability matters. Even though the UK is not part of the EU, the CSRD will impact some UK incorporated companies.

The Department for Business and Trade (DBT) is consulting on exempting medium-sized companies from preparing a strategic report as part of their annual report and accounts. The consultation also seeks views on increasing the maximum number of employees that a company can have in order to be ‘medium-sized’ from not more than 250 to not more than 500 employees. It also gives details of other steps planned to streamline non-financial reporting.

GC100 has launched a survey seeking feedback on how listed and large private companies approach minute-taking. The idea is to learn more about current market practices, identified risks and other considerations in the wake of AI and legal technology being introduced to support the minute-taking process. The deadline for responses is 6 September 2024.

Commercial/general

The Terrorism Protection of Premises Bill (AKA Martyn’s Law) is expected to become law in 2024. Proposed in the wake of the Manchester Arena bombing and included in the King’s Speech, it aims to strengthen security measures in public venues across the UK. As well as concert halls, stadiums, and other crowded spaces, the implications of Martyn’s Law will extend to other publicly accessible venues and events, including hospitals, large care homes, shops, leisure, education and transport facilities, and more.

The European Commission has published an FAQ document on the EU Corporate Sustainability Due Diligence Directive which entered into force on 25 July 2024. The Directive sets out a corporate due diligence duty for large companies to identify and address adverse human rights impacts, environmental impacts in their own operations, their subsidiaries and in their activity chains, and an obligation for large companies to adopt a transition plan for climate change mitigation.

The DBT is consulting on de-regulating the Commercial Agents Regulations, with a view to simplifying the legislative framework, reducing court time spent interpreting the regulations, and enabling businesses to contract more freely.

Billed as the world’s first comprehensive legal framework on AI, the landmark European Union AI Act has now been finalised. See Walker Morris’ briefing.

The new Labour government plans to create a new ‘Regulatory Innovation Office’, bringing together existing functions across government, and to introduce binding regulation on companies developing the most powerful AI models.

A Senior Associate in Walker Morris’ Regulatory & Compliance team recently shared their insights on the growing trend of AI claims in advertising in this recent BBC article on ‘AI washing’.

The DBT has published the Assimilated EU Law Parliamentary Report for January 2024 to June 2024. It highlights progress to date and future plans on revoking and reforming assimilated law.

People

Research (Digital Noise Impact Report) from employee experience platform, Unily, shows that nearly half of all employees are distracted at least once every 30 minutes, and almost a third report being distracted at least once every 15 minutes, by a workplace notification. That means employees working 8-hour days could be experiencing over 160 distractions from their workplace digital tools each week. It’s impacting both employee wellbeing and productivity.

The International Chamber of Commerce published the first part of a report series looking at the role of emotion, culture and behavioural tendencies and their impact on B2B relationships.

In Orwin v East Riding of Yorkshire Council, an employee had been dismissed for refusing to remove an email signature using preferred pronouns that was intentionally provocative. The claimant’s views, including that sex is biologically immutable and binary, were protected under the Equality Act 2010. However, the email signature (“XYchromosomeGuy/AdultHumanMale”) was found to be a deliberately provocative act to mock the idea of gender self-identification, rather than an expression of the claimant’s gender identity. The dismissal was in response to an inappropriate manifestation of the claimant’s beliefs, rather than because he held gender critical beliefs. It was therefore not discriminatory.

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