At the end of January 2023, the Government published the UK's Environmental Improvement Plan 2023 (the EIP) - the first revision to the 25-Year Environment Plan, published originally in 2018. The EIP is a critical pillar in the Government's climate change strategy and sets ten goals intended to stop the decline of nature, and to reverse it.

While the EIP contains much to interest the most passionate of environmentalists, it also presents many opportunities for the commercial world to play its part. In setting out the 10 goals, it openly states that "businesses and investors are a key part of a nature-positive future", and sets the policy framework to enable that to happen.

In a series of five briefings, we will review the EIP and highlight some of the key messages. In this first briefing, we examine Goal 1: Thriving Plants and Wildlife; and Goal 2: Clean Air and, in doing so, touch on some of the key factors that will influence the EIP.

We explore the other eight goals within the EIP across this five-part series of briefings:

The regulatory backdrop to EIP – Key factors

There are a number of cross-cutting themes and policies that are noted throughout the EIP, the delivery of which will be critical to achieving all 10 goals. They include:

  • Green jobs – the Government has, for a number of years, expressed a strong commitment to create hundreds of thousands of green jobs across the UK as part of the transitioning economy. The EIP notes that new green jobs will be created by its new policies: for example, in the next 12 months waste collection and packaging reforms will create 21,000 jobs, 10,000 in flood defences, and 3,400 jobs in tree planting and peatland restoration;
  • Green finance – the Government aims to raise at least £500 million annually by 2027 in private finance to support nature's recovery in England, but hopes that will increase to £1 billion by 2030. The EIP notes that a Green Finance Strategy will be published in 2023 to update its 2019 strategy;
  • New farming schemes – following Brexit, and the transition out of the EU's Common Agricultural Policy, the Government hopes that 70% of agricultural land and 70% of farm holdings will be covered by its new farming schemes - highlighted in the EIP - by 2028;
  • Greening Government commitments – the Government has taken (and will continue to take) steps to improve its own estate, reducing greenhouse gas emissions, waste, and water usage; and
  • Making green choices – the EIP is at pains to stress that achieving its goals will be a shared endeavour, from central government to individual citizens. It explains that society will become greener by design, reducing the 'ask' on citizens to do the green thing, and how taking green actions will become more affordable.

Goal 1: Thriving plants and wildlife

Generally

The EIP notes that "the air we breathe, the water we drink, and the food we eat, all of which are essential to human survival, all depend on thriving, diverse and species-rich ecosystems". Pressure on nature in the UK and overseas has come from a variety of places: agricultural management, climate change, urbanisation, pollution, hydrological change, invasive non-native species and woodland management. Together, these elements all come into the crosshairs of the EIP.

Halting the decline

A number of targets and commitments are set out in the EIP, key among which is the aim to halt the decline in species abundance by 2030, and to then increase abundance by at least 10%, so as to exceed 2022 levels by 2042. In the same way that we have not yet hit peak carbon emissions (globally), neither have we reached the biodiversity low.

Habitat creation

The EIP describes the Government's aim to restore or create more than 500,000 hectares of wildlife-rich habitat by the end of 2042; with a new target of 140,000 hectares of habitat outside of protected areas by 2028. It is likely the policy will encourage the creation of habitat corridors, linking habitats and ecosystems together to enable even greater nature impact.

Increase in tree canopy and woodland cover

The EIP sets a target to increase tree canopy and woodland cover to span 16.5% of England's total land area by 2050. For the first time, the target includes non-woodland trees, which is likely to encourage an increase in urban tree planting and bring cooling, shading and biodiversity benefits in built-up areas.

Improve the condition of marine protected areas

Approximately 35,000 square miles of our English waters are within marine protected areas (MPAs), protecting species and habitats like coral reefs, blue mussel beds and deep-water mud habitats. The EIP set a target of ensuring that 70 of the designated features of MPAs are in a favourable condition by 2042, with the remainder in a recovering condition. As an interim target, the Government is aiming for 48% of designated features in MPAs to be in a favourable condition by 31 January 2028.

What does this mean for businesses?

As set out in our overview, the UK Government is eager to involve businesses in the delivery of the EIP in order to ultimately achieve its nature goals. It will be looking closely at how to incentivise the commercial world to develop models whereby the private sector can be involved with nature solutions to the climate crisis.

It is likely that new nature markets will be developed in the coming years, for example in relation to saltmarsh and seagrass habitats. Improving and preserving these habitats would have significant natural benefits for flood management and water quality issues. In essence, they would play a large part in sequestering carbon and, as a result, markets could be established to create new revenue streams.

Similarly, business will play an essential part in increasing tree canopy and woodland cover. Tree planting will bring critical biodiversity benefits, and the capture and storage of carbon could be brought into the UK Emissions Trading Scheme. This could potentially be achieved through the creation of Woodland Carbon Units which, again, would attract private sector investment and new business models.

The updated Green Finance Strategy, to be published in Spring 2023, is hoped will support new nature markets by bringing certainty and confidence to landowners, managers and funders, and in turn reduce risk and encourage the funds to flow.

One of the most immediately obvious ways in which business and the private sector will play a role in enhancing nature is through the biodiversity net gain scheme. Biodiversity proved a key theme at COP27 last November and with plans for the new biodiversity net gain scheme forging ahead in the UK, we have looked further at some of the mechanisms for securing biodiversity – see our earlier article on the conservation covenant regime.

The EIP confirms that the biodiversity net gain scheme will commence in November 2023 (as expected) and notes that a marine gain policy is in development to apply to infrastructure developments at sea – and in all likelihood with a focus on "blue carbon" habitats – marine habitats capable of sequestering carbon.

Goal 2: Clean air

Generally

In recent years, air quality in the UK has seen reductions in nitrogen oxides; sulphur dioxide; PM2.5 (fine particulates); ammonia; and non-methane volatile organic compounds. Notwithstanding the reductions, the EIP still notes that "air pollution continues to be the biggest risk to human health, with particular hotspots in some urban areas". Indeed, those who are most vulnerable are disproportionately impacted by poor air quality. Target reductions have been set in relation to the most damaging pollutants, but the EIP now sets interim target reductions as well.

The clean air targets in the EIP will be achieved by a number of different policies, the core of which are set out below. These will hit the four most polluting sectors: our homes; agriculture; industry; and transportation, which in total contribute to more than 85% of PM2.5; 87% of nitrogen oxide; and 90% of ammonia emissions.

Domestic air emissions

The principal policy focus for reducing emissions in the home will relate to improved regulation for burning high emission materials, such as wood and manufactured solid fuels (MSF). The EIP notes that a ban of domestic burning in England is not on the cards, but regulations will be tightened; for example, restricting the sale of wet woods, limiting the sulphur content of MSF, and reviewing the enforcement of local smoke control areas.

What is likely to be more relevant to developers is that air quality will have greater prominence in the planning process, with greater attention given to environmental outcomes reports (the new form of environmental impact assessment) and the identification of impacts on air quality that the underlying developments will have.

Industrial air emissions

Best Available Techniques (BAT) have been successful in reducing air emissions from large industry over a number of years. Given that success, the Government is keen to further roll-out BAT to new technologies and put methods for businesses in place; and to also rollover that knowledge to smaller industries, which are often located in urban areas and close to residential areas, where improvements in emissions standards could have very positive outcomes. The EIP refers to small industries such as petrol stations, metals processing and quarrying as being the types of businesses whose environmental permitting will be subject to the new system for updated standards in the future, although many others will be in scope.

Agricultural air emissions

The EIP notes that the agricultural sector is responsible for 87% of the UK's ammonia emissions, which adversely impacts biodiversity, and combines with other pollutants to create PM2.5 (known as secondary PM2.5).

A key policy to improve emissions from agriculture is to bring dairy and intensive beef farms into the scope of environmental permitting, as pig and poultry farms currently are. In addition to bringing some of agriculture's sub-sectors into the permitting regime, the EIP notes that Government will identify best-practices for emissions reductions, which may be more onerous depending on their particular locations, for example next to a sensitive nature site.

Anaerobic digestion (AD), used to create biogas, produces a by-product used in place of chemical fertilisers, but which leads to ammonia emissions, which is toxic to aquatic life. Given the rise in popularity of AD, and its likely further increased deployment towards 2030, the EIP announced that the Government will explore technologies to treat digestate and thereby reduce ammonia emissions.

Transportation air emissions

Transport emissions are decreasing, yet remain very significant sources of nitrogen dioxide and PM2.5 emissions. A number of high-profile policies have been introduced to tackle these emissions, for example the creation of clean air zones in cities across the UK, and the restriction on the sale of new petrol/diesel-fuelled cars from 2030.

Much of Government policy has been set out in its Transport Decarbonisation Plan published in 2021, and the scale of the policy solutions within this are significant, presenting many opportunities for commercial innovation and delivery. The Government is looking to achieve a world-class charging infrastructure network; proposes to deliver thousands of miles of cycling paths; and will be investing in research into technologies that will reduce brake dust and tyre emissions, which apply equally to electric vehicles, as they do petrol and diesel-fuelled cars (if not more so).

Although 1.5% of our greenhouse gas emissions come from the rail sector, the EIP notes that Government will commission a further review of air quality on the railway, which will likely result in focussed work to improve air quality at problem locations, such as enclosed railway stations.

Finally, in relation to shipping emissions, the EIP set out the Government's plan to consult on extending the North Sea Emission Control Area, in which shipping must adhere to strict emissions limits; establish a 'course to zero' strategy for domestic shipping; and refresh its Clean Maritime Plan, which is expected to include indicative decarbonisation plans for the domestic shipping sector.

What does this mean for businesses?

Air quality is one of the Government's top priorities – it's the second goal in the EIP after all; and the link between poor air quality and human health has been clearly established. Given the relationship that the commercial world has had, historically, with air emissions, it is no surprise that business and agriculture will be at the forefront of improvements.

Developers, in the living, commercial, and infrastructure sectors will face closer scrutiny of their schemes and the impact that they have on local and regional air quality. More applications will be refused for air quality reasons, although 'air positive' developments may find their route to consent easier. This might result from, for example, the way they are designed to increase air flow, disperse pollution, integrate segregated cycle networks, prioritise sustainable transport, include public green spaces, incorporate zero-emission energy systems, and so on.

Bringing agriculture and small industry into the scope of permitting and tighter regulation may well present some operational challenges, which will require adaptation and system upgrades. However, tighter regulation will almost certainly drive research and development to find the necessary solutions, again providing opportunities for innovation.

Greater opportunities to assist in reducing air impacts, come from the transportation sector, where a complete shift in the way we move goods, as well as ourselves, is underway. In the road transport sector alone, the pace of change is hard to comprehend, and we can expect further policies, and subsequent refinements of policy, in the coming years in order to encourage innovation and investment from business. Innovation and change will come in many ways, including the technologies deployed to provide 'transport-as-usual' solutions. However, the type of transport we use will need to adapt, for example as more cities adopt low-emissions zones, we can expect electric cargo cycles to take over 'last-mile' and local deliveries.

To discuss any of the points raised here about the EIP or any related issues it raises for your business, please contact sustainability partner Ben Stansfield.