My Lords, these draft regulations were laid before the House on 23 April 2026.
The introduction of mandatory digital waste tracking is a cornerstone of this Government’s Waste Crime Action Plan, which is the toughest ever crackdown on illegal waste activity and aims both to transform the waste management system and to target the problem at its core. Requiring near real-time information about waste movements to be recorded on a centralised system will enable the Environment Agency to identify unusual patterns, pinpoint high-risk operators, intervene earlier and shape targeted initiatives, supporting a shift from reactive investigation to proactive prevention. The current system already requires that accurate documentation accompanies transfers of waste between those handling it, but problems with this system leave it open to abuse by criminals and make it easy for them to undercut responsible operators and harm our environment.
The first problem is that regulatory officers do not routinely see the individual documents. The current legal requirements mean that information is collated and sent to the Environment Agency only every quarter. This delay makes it impossible for officers to identify problems proactively. If regulators need to see individual waste records for an investigation, they usually need to request them through the serving of legal notices. This is time-consuming and provides an opportunity for documents to be altered prior to submission, frustrating any investigation.
My Lords, I welcome the Minister to her place and thank her for introducing the regulations before us. I say at the outset that they are extremely welcome; obviously, I welcome them. I declare that I recently joined the Environment and Climate Change Committee of this House, so ably and excellently chaired by the noble Baroness, Lady Sheehan, who I think may refer to some of our report’s conclusions, so I do not want to duplicate that.
Having read the reference to which the Minister referred in the Secondary Legislation Scrutiny Committee’s report, I would like to touch on the relationship between these regulations and the extended producer responsibility for packaging scheme. The Minister said that these regulations underpin that responsibility; I wonder if she could elaborate. Is she saying that there will be no sort of double whammy for operators that are under these regulations, as well as the new extended producer responsibility for packaging scheme? That is not entirely clear.
I would like to focus my main question to the Minister in this way, if I may. This instrument is all very well and good; it is inviting those who we know are legal operators to comply with a new set of rules on what will, I think, be excellent digital waste tracking. How is her department going to tackle those illegal operators that we identified clearly in the excellent and recently published report—having joined the committee lately, I cannot take much credit for it—from the Lords Committee on Environment and Climate Change on illegal waste?
It is a pleasure to follow my noble friend, if I can refer to my erstwhile colleague on the Environment and Climate Change Committee as that, so I thank the noble Baroness, Lady McIntosh, for her contribution. I would be very interested to hear the Minister’s response to those points, and I thank her for introducing these regulations.
The move towards a digital waste-tracking system represents a significant milestone, which the waste industry has been calling for, for over a decade. It has taken a very long time. However, it is here now, and this instrument is a vital first step—it is only a first step—towards modernising our infrastructure and replacing the outdated paper-based systems that, in effect, left the door open for criminal activity. The move towards a mandatory digital record for the 200 million tonnes of waste produced in the UK annually must be effectively delivered.
By establishing a real-time audit trail, this system has the potential to disrupt the organised criminal networks responsible for the 38 million tonnes of waste that are illegally dumped or misdirected every year: a scourge that costs our economy, as the Minister recognised, at least £1 billion a year, and that is a very conservative estimate. The introduction of a unique ID number will finally allow businesses and householders to verify that their waste has reached where it should be going—its legitimate destination—supporting our transition to a truly circular economy. That has to be the final aim of anything that we do with waste regulation.
My Lords, I thank the Minister for bringing forward these regulations. I refer the Grand Committee to my interest as a landowner. To confirm my noble friend Lady McIntosh’s comments, I am a victim of illegal waste disposal on a daily basis. I have also experienced a licenced waste haulier illegally processing waste and disposing of it on my land, and I received a very weak response from the Environment Agency.
These regulations were enabled by the Environment Act 2021, passed under the previous Government, in which we announced the introduction of digital waste tracking to help local authorities crack down on waste crime. We on these Benches remain committed to tackling waste crime. Some 57% of landowners and farmers have been impacted, and we know there have been serious failings in the Environment Agency’s performance. We need effective deterrents and police powers, which we fought for in our amendments to the then Crime and Policing Bill, which were often missed opportunities for this Government.
This digitalised tracking scheme will create a singular way for the Environment Agency to track waste, replacing the fragmented way in which is it regulated now. This will make it easier to monitor waste at both the national and local levels, to ensure it is handled in compliance with the law, rather than allowing waste crime to go under the radar. What assurance can the Minister offer the Grand Committee, after numerous large-scale examples of the EA apparently ignoring enforcement on illegal waste sites, that the EA will be more aggressive in using this information to prevent and prosecute offences?
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We must recognise that the context in which this system was announced has since changed significantly. Businesses are facing huge pressures, higher costs and uncertainties. Therefore, we must ensure that these measures are sensitive to this reality. For businesses subject to these regulations, the transition costs are expected to be £1.53 million over four years, with service fees amounting to £16.7 million and software costs totalling £39 million over 15 years. Can the Minister clarify how well this has been communicated to businesses and what their response has been? Are any cost savings or efficiencies available to business through these processes that might reduce the overall impact? Adding cost to lawful waste disposal increases the incentives to deal with waste illegally. Can the Minister help us understand what scale of cost increase is likely for lawful waste disposal?
I appreciate that the benefits are predicted to outweigh the costs in the long term, and we are all eager to see the perpetrators of waste crime expelled from the market with the severest penalties imposed. This will see justice served and reduce unfair competition for law-abiding businesses, but we must help businesses prepare for the transition to this new system and build trust. I am grateful to the Minister for her comments on EPR, but I agree with my noble friend Lady McIntosh and the noble Baroness, Lady Sheehan, that a bit more clarification on how this will work in practice would be welcome. We welcome these regulations, but we need assurances that they will not result in damaging costs for law-abiding businesses and that there are no opportunities for criminals to undermine the new system. I look forward to the Minister’s response.
I thank noble Lords for their contributions and comments. I shall go through and try to pick up the questions asked. As usual, we will go through Hansard and write if there is anything I miss or on which I cannot provide information.
The noble Baroness, Lady McIntosh, asked about EPR and how the regulations underpin other regs. The SI underpins the system, in that it is not intended to put any further burdens on operators. The idea is to use the data, such as on waste tonnages, to help with calculations on local authority payments. It is designed to work with it, rather than create the kind of difficulties that the noble Baroness talked about.
All noble Lords mentioned waste crime, so I will go through some of the issues around that. The noble Lord, Lord Roborough, talked about farmers having to deal with excessive fly-tipping, which we have seen increase in recent years. Obviously, it is mainly local authorities that deal with fly-tipping, but we recently secured powers in the Crime and Policing Act to provide statutory fly-tipping enforcement guidance to support councils so that they consistently, appropriately and effectively exercise their powers. We have also obtained powers for courts to award between three and nine penalty points on the driving licences of those found guilty of fly-tipping. It will make it harder for offenders to keep dumping illegally if they end up being disqualified from driving, but it also sends out a clear signal that we are just not tolerating this kind of behaviour.
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The costs to business were raised. That obviously depends on a business’s size and activity, the current information and what method it is using. Operators that do not already use software to record their waste information might choose to purchase software if they need to comply with the new requirements, so there is a cost to that. For all operators, there will be costs relating to familiarisation with the new requirements, any training that needs to take place, and potential changes to business processes, for example. They are the kinds of costs that we think will come in, but, clearly, once they have happened, the business will be set up ready for the new requirements.
Finally, I say to the noble Baroness, Lady Sheehan, that I have seen her Private Member’s Bill. It looks really interesting and I would be very happy to arrange a meeting to discuss it further. I hope I have covered most of the questions, but have I missed something?
I may have missed it, but I want to be reassured that the discussions now taking place within the department will ensure that all producers of waste are included. We will never be able to turn the tap off unless we can do it at source, with the producers included.
I will have to look into that in some detail and get back to the noble Baroness. I have just been told that it is extremely complicated. It is probably best if we put it down in writing so that she has a proper, clear answer, rather than what I can say now.
Having said that, I thank all noble Lords for their support for this important legislation. We know that it is supported and highly anticipated by stakeholders—and noble Lords, too—and I am very pleased to be able to present it here today. I commend it to the Committee.
Motion agreed.
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The second issue is the confusion created by requiring different records depending on whether the waste is hazardous or non-hazardous. The non-hazardous waste system in particular, where records are required between each of two parties, rather than one record for the end-to-end journey, makes it impractical for waste producers to check where their waste has ended up and who has handled it. It also makes it extremely difficult for regulators to conduct cradle-to-grave audits or hold waste producers to account, because there are no legal requirements to connect the documents to each other.
Finally, although many operators do their best to complete these documents, they are undercut by those who do not—those who think that “muck” is an accurate waste description or that a partial postcode for the source of waste is acceptable. These issues have provided the opportunities for organised waste criminals to thrive and cost our economy £1 billion a year through fly-tipping, illegal waste sites, illegal exports or misdescribing waste in order to avoid paying landfill tax.
That is why we are introducing these regulations, which are the crucial first step in transforming the waste industry so that regulators have timely data on the movements of waste from production to disposal. This first set of regulations mandates waste receivers operating under an environmental permit to make a digital record of waste that comes into their facilities and to submit that information on the digital waste tracking system within two working days of the waste being received. A second instrument will be laid next year to extend the requirements to capture the full end-to-end waste journey information. This is one of the most transformative changes to the waste sector in decades, and will bring its practices into the digital age.
Before I turn to the detail of the legislation, I would like to acknowledge the work of the Secondary Legislation Scrutiny Committee. The committee’s report highlighted a point of interest regarding how digital waste tracking would interact with the new extended producer responsibility for packaging scheme. Once fully implemented, the data submitted to the digital waste-tracking system about waste movements will provide elements of the data required to underpin that new scheme and will help reduce opportunities for fraud.
I turn to the details of the legislation. The regulations designate the Secretary of State for Environment, Food and Rural Affairs to establish, maintain and operate the digital system. They also require permitted waste receivers to make digital records of specified information, as set out in Schedule 1, before submitting it on to the system. There is a requirement for operators to pay an annual fee of £26, which will be used to recoup the costs of establishing, operating and maintaining the system.
There are alternative provisions for those who are digitally excluded. Digitally excluded persons are those for whom it is not reasonably practical to use electronic communications or to keep electronic records for any reason; this could be due to age, disability or religious beliefs. The alternative requirements include obtaining a digitally excluded number from the Environment Agency and keeping written records, as well as a requirement to supply these records to the Environment Agency if requested.
The regulations introduce a new offence of failing to comply with the legislation. They also make provision for both criminal penalties and civil sanctions. Criminal sanctions are necessary to enable the Environment Agency to effectively punish repeat offenders and ensure that the new system is not undermined by unscrupulous operators.
These regulations are truly transformative. The introduction of a digital system where information about waste movements can be shared and viewed by those who need to see it in a timely way will undoubtedly benefit us all. I beg to move.
The problem is that it is quite cheap to apply for an initial licence. Here, again, there is going to be only a £26 fee. What we found was that the operator was then going along to collect and gather what was, in many instances, building material that reappears as fly-tipping, probably often on land such as that owned by my noble friend Lord Roborough and others. I am sure he will be in good company in this regard. What is unacceptable regarding toxic waste, such as building waste, is that people pay for a licence, gather that material up and then dispose of it illegally.
My real concern, while this system may work well for those who are in the system legally, is how the department intends to operate on those illegal operators who are currently not operating within the remit of the law. How will the Minister’s regulations tend to address that from the digital tracking point of view?
I welcome the new system’s potential to generate better data, because that will inform better policy-making. I welcome the intention to align this approach across the UK; that is very important and it is good to read that we will be working in partnership with the DAs. However, as the Minister said, this instrument represents only the first phase and its success will depend on what follows. Full end-to-end traceability, from production to the final resting place, remains contingent on future legislation. I would be very grateful if the Minister could confirm that phase 2 will be delivered in full and on time, and that we will not be waiting another decade.
There are other critical concerns regarding the implementation framework. First, we must not underestimate the sheer magnitude of the task on which final success depends. Phase 1 targets 12,000 permitted sites. Phase 2 will bring over 100,000 operators, carriers, brokers and dealers into scope across the UK. We are talking about potentially billions of data transactions—and I thank the Environmental Services Association for its briefing. Will the Government allocate the resources necessary to deliver the back-up needed, such as in communicating effectively with legitimate operators, whatever their size? Quite a lot of SMEs will be involved at this stage, as will sole traders.
Secondly—and this is the most pertinent flaw in this SI—I am concerned about the producer loophole that it is proposing or that I understand is coming down the line. While producers are the start of the duty-of-care chain, I understand that the current proposal will make their registration optional. I want to understand whether this is actually the case. I find it hard to believe that the Government are trying to tackle waste crime without mandating that producers take part in the scheme but, if they are, can the Minister explain the Government’s thinking there? I deeply share the industry’s concern that this would create a very dangerous loophole. If waste producer registration is not mandatory, it is difficult to see how a complete audit trail could be achieved or how those fly-tipping and illegal operators will be effectively identified.
While on the subject of producer responsibility, I will mention my Private Member’s Bill—the Corporate Waste Responsibility Bill—as it is an opportune moment to do so. In that context, it becomes even more pertinent if the producers are not included in the digital waste-tracking system. If I may be so bold as to say so, this makes my Bill even more pertinent and even more deserving of government support. I welcome the opportunity to speak to the Minister about that. Nevertheless, I hope that she will address the concerns raised on this SI on the potential non-inclusion of producers.
As the recent inquiry by the Lords Environment and Climate Change Committee, which I have the fortune to chair, highlighted, the Environment Agency’s current record on enforcement is woeful. It is clear that technology alone is not a panacea: without sufficient resources to monitor and to act on intelligence generated, this risks becoming a mere data-collection exercise. Our inquiry was clear in its findings that the tools to tackle waste crime are in place, but what has been lacking is the effective use, enforcement and compliance of the actions that follow on from the powers that the Environment Agency already has. The Government must provide assurance that this system will be sufficiently resourced and operationally ready from day one. I remain of the opinion that we need more than just digital tracking; we need to foster a genuine enforcement culture. How does the Minister propose that this instrument will do that? Can she assure us that regulators will have full visibility of waste movement from the point of production through to the final treatment and disposal? If not, how do the Government expect digital waste tracking to deliver the intended improvements in compliance and enforcement?
I will finish with a couple of questions for the Minister. First, we must ensure that criminals cannot simply submit inaccurate information into the system to mask their tracks. How will the Government ensure that criminals do not do that? Secondly, it would be helpful to understand how the Government will measure whether the implementation of this SI has been successful. What other key performance indicators will be published? How will Parliament be kept up to date on the scheme’s effectiveness?
Finally, we have a strong duty to ensure that this system provides end-to-end traceability from the point of production to final disposal. Anything less is just digitising the problem rather than fixing it.
We also understand that these regulations make provisions for those who are digitally excluded, including those who choose not to use electronic equipment due to their personal beliefs. I would appreciate some clarity from the Minister about how these exemptions are determined and approved and how many waste operators the Government estimate will fall into this category. Is it really possible to be a licensed waste operator in this century if you are unable to achieve a minimum level of digital proficiency? We cannot allow this well-intentioned provision inadvertently to undermine the digital tracking system.
On illegal waste sites, we are working in collaboration with other departments to develop the criteria to objectively identify the sites with the most compelling cases for clearance, because we have to look at operational, community and environmental factors in order to target the sites that are currently the most damaging. The EA steps in when there is an untenable risk to the environment or the public. Site-specific assessments are conducted to determine feasibility and whether clearance is the right course of action at the time. We also need to secure access and look at contamination, safety risks and the engineering design for clearing the site. We do not have a duty to clear all illegal waste sites, as noble Lords are aware, but we are absolutely determined that this is the turning point to try to sort out a lot of the problems we have been facing in recent years.
One of the questions that the noble Baroness, Lady McIntosh of Pickering, initially asked was: how will this actually stop illegal waste activity? As I said before, we will lay a second statutory instrument next year, which will require information about the full end-to-end journey of waste to be recorded. Information about that waste movement will be required to be entered into the digital system before the waste is moved, followed by confirmation that a waste carrier has collected the waste and that it has actually been received at a waste-receiving site. If those confirmations are not provided, that will tell the regulators that the waste has potentially been lost and that they can act accordingly to investigate that. Each entry will generate a unique ID number, and it will be required to be given to the waste producer, so that it can check that the waste has gone to a legitimate site. This transparency and near real-time data will reduce the opportunities for organised waste criminals to operate, and it will make it much harder to commit waste crime through deliberate misdescription, illegal exports and fly-tipping. This will make it as hard as possible for people to want to do this in the first place.
In March, we published our Waste Crime Action Plan to crack down on illegal dumping. It sets out a zero-tolerance approach, which is built around three objectives: prevent, enforce and remediate. We are also looking to strengthen the regulatory regime in order to pursue the criminals responsible, with more people actually doing the work and looking for them, using our advanced technologies and stronger punishments and trying to accelerate the clean-up effort, so that we can get to grips with this.
Up until March 2025, over a three-year period, the Environment Agency secured 211 prosecutions against waste criminals. Recent individual successes since July of last year include a serial waste criminal paying over £1.4 million for widespread illegal waste dumping, and four individuals were arrested over the Kidlington illegal tipping incident. We are determined to ramp this up.
The Waste Crime Action Plan also includes new police-style powers for Environment Agency officers, including exploring powers under the Police and Criminal Evidence Act and Proceeds of Crime Act. The Environment Agency is also expanding its use of restriction notices, fixed penalty notices and permit suspensions, so that high-risk sites can be stopped earlier. We will go after the tax evaders and expand HMRC tax check rules to the waste sector.
The noble Baroness, Lady McIntosh, asked me about the Environment Agency’s funding, and a number of noble Lords asked about enforcement. The noble Baroness, Lady Sheehan, was particularly interested in enforcement. Just looking at the Environment Agency’s resources, the EA’s total budget for 2025-26 was increased, and that includes £15.6 million for waste crime enforcement—a more than 50% increase. It has gone up by £5.6 million. That has enabled the Environment Agency to nearly double the size of the Joint Unit for Waste Crime.
It will also receive £45 million to spend on waste crime enforcement over the next three financial years; that is on top of the increase to the waste crime enforcement budget I just mentioned. This will enable the expansion of the Joint Unit for Waste Crime, with an increase to 20 specialists. It will also enable additional investment in front-line activity, intelligence and operational capacity in the EA’s core waste crime teams. To show what that looks like, it will include 31 operational field-based staff, the equivalent of 10 and a half operational analytical staff, and further managerial staff. This should enable earlier and more proactive interventions. Also, the EA is receiving 37.5% of the Proceeds of Crime Act income back into it, which will then be invested specifically in fighting waste crime. For example, since 2024, we have recouped more than £1.5 million through that route.
The noble Baroness, Lady Sheehan, asked about communications and engagement with businesses, particularly small businesses. To inform the design and development of the service, we have carried out extensive user research with software vendors and industry operators across the full range of sectors in the waste industry. I assure the noble Baroness that we are not talking about just the largest operators: we have talked to people right down to the micro level and tried to reach those who are harder to talk to. We have been very thorough in covering that, and we are continuing that user research as we move towards the expansion of the service next year, so those ongoing communications will continue.
Service fees and the charge were mentioned. The fee covers the costs of establishing, operating and maintaining the service. It includes things such as the building of the digital system, the ongoing housing costs and the operation of the help desk. The service charge was determined as follows: it was estimated over a 10-year period and averaged over the total number of operators expected to use the service once it has been fully delivered, ensuring that those in the first phase will not pay more. HM Treasury has agreed that approach. However, to answer the noble Baroness’s question on review, we intend to review the service charge once this system is operational and we have more accurate data on the number of users of the system. If needed, we can amend the service charge.
Resources were mentioned by all noble Lords, I think. We have increased the Environment Agency’s funding, as I have just detailed. The Environment Agency will also adopt a risk-based approach to regulation by assessing the waste data entered on to the service. We need to make this much more efficient, effective and targeted, which is what we are looking to do. Also, through the implementation of digital waste tracking, officers will save time because they will no longer be looking at manual document checks, which will help; they will not have to carry out time-consuming audits or constantly issue repeated information notices. Overall, we should be able to use Environment Agency resources much more efficiently and effectively than previously. As I mentioned before, the fact that we will have earlier visibility of waste movements will mean that we can identify and investigate potential problems much more quickly, in order to reduce the time and resources spent dealing with huge pollution incidents.
The noble Baroness, Lady Sheehan, asked about mandatory requirements. All remaining sectors of the waste industry, including those that transport, broker and deal in waste, will be included when we get to the second phase. Waste producers who arrange their own waste movements directly will also be captured in those requirements, but we will give out the full details of that nearer the time.
Phasing was also mentioned. Because this is one of the biggest transformations of the waste sector, involves such a large number of operators and is such a complex area to turn around and change, we decided that it was best to introduce things incrementally—starting with the creation of the firm foundation, which we are looking at now. There are approximately 12,000 operators of permitted waste receiving sites, which will all be impacted by the requirements. There are approximately a further 100,000 waste operators who are going to be impacted by the planned expansion of the system and the requirements that they will have to meet. By doing this in a phased way, we can learn from the first phase as we move into the next phase, so that we can better identify all the active waste carriers whom we will need to ensure we have on board when we go into that second phase.
That brings me on to the question from the noble Baroness, Lady Sheehan, about when phase two will happen. From this autumn, the expanded service will be available for initial testing with an invited group of users. Then, from spring next year, it will be made available publicly for voluntary use. We plan to lay the next set of regulations at the same time, with requirements coming into force from October 2027. I hope that is helpful for the noble Baroness. I can also confirm that regulators will have visibility of waste movement data and be able to share data among themselves.