Environmental Taxes and Regulations

What is it?

• A tax on the commercial exploitation of aggregate.

Affected clients?

• Mining and quarrying businesses. Businesses within the construction industry.

Scope

• Tax on commercially exploited taxable aggregate at a rate of £2 per tonne.

Key considerations

• Scope of exemption changed on 1 October 2023.
• Businesses may be unaware they are within scope of tax.
• Upcoming devolution of the regime to Scotland.

How we can help

• Advice on compliance.
• Dispute resolution with HMRC.

What is it?

• A tax on the non-domestic use of energy.

Affected clients?

• Businesses generating electricity or other types of energy.

Scope

• Levy on the supply of taxable commodities to non-domestic consumers.

Key considerations

• Complex to navigate - exemptions and reliefs may apply.
• Businesses may be unaware they fall within scope.

How we can help

• Assistance on complex compliance and application of reduced rates.
• Dispute resolution with HMRC.

What is it?

• Identification and assessment of developing international exposures and opportunities within the environmental tax and regulatory landscape.

Affected clients?

• Businesses with complex international supply chains.

Key considerations

• Applicable to all types of new and existing taxes and regulations across multiple jurisdictions.

How we can help

• Leveraging our global network and existing resources for optimal reach and efficiency.
• Tech enabled to provide analysis and forecasting to assess impact across the value chain.

What is it?

• A new regulation designed to reduce the EU market’s impact on global deforestation and biodiversity loss.

Affected clients?

• Both Operators and Traders of in-scope products and commodities:
  • Operator - any natural or legal person, who in the course of a commercial activity, places relevant products on the EU market, or exports them from the EU.
  • Trader - any person in the supply chain, other than the operator, who, in the course of a commercial activity, makes the relevant products available on the EU market.

All businesses are caught, irrespective of size, although SMEs and micro-enterprises will be subject to simplified obligations.

Scope

• Businesses importing, exporting or trading on the EU market in products derived from seven specified commodities - cattle, coffee, cocoa, palm oil, soy, wood and rubber.

Key considerations

• The regulation is already in force with obligations starting after 30 December 2024.
• The preparation required is significant, including mapping supply chains and identifying in-scope goods.
• Non-compliance could result in the seizure of goods and fines up to 4% of EU turnover.

How we can help

• Scope assessment, supply chain analysis and compliance support.

What is it?

• A new sustainability reporting Directive introduced by the EU, expanding upon existing non-financial reporting rules.

Affected clients?

• Large EU and non-EU companies who operate inside of the EU; and
• Small and medium companies listed in an EU-regulated market.

Scope

• The CSRD strengthens sustainability reporting requirements for large businesses and mandates companies operating in the EU to publicly disclose information on material sustainability topics - including the impact of their activities on climate change, their use of natural resources, the pollution they emit, their carbon footprint and also their commitments to respect human rights and labour laws.

Key considerations

• Complex reporting framework being implemented in all EU Member States.
• Also affects non-EU companies.
• Non-compliance poses significant reputational risks as well as the risk of fines and potential liability for directors.

How we can help

• Entity mapping, double-materiality assessments, and compliance advice.

What is it?

• A new legislative framework introduced by the EU that requires companies to conduct due diligence and demonstrate what action they are taking to address risks to the environment and human rights.

Affected clients?

• Very large companies (turnover >EUR 450m (and >1000 employees if an EU company));
• Ultimate parents of large groups who meet the thresholds above; and
• Large franchising/licensing companies (turnover and royalty thresholds apply).

Scope

• The CSDDD introduces requirements for companies to identify, prevent and mitigate the actual and potential impacts of their activities on the environment and on human rights abuses. It requires companies to conduct due diligence on their own operations as well as on the activities of their subsidiaries and other entities in their value chains.

Key considerations

• Interlinked with CSRD but introduces entirely new obligations.
• Requires significant preparation ahead of implementation of new due diligence policies.
• Also affects non-EU companies.

How we can help

• Legal entity analysis and compliance advice.

What is it?

• A framework that ensures products placed on the EU market are produced more sustainably, labelled appropriately and easier to repair and recycle.

Affected clients?

• Those placing or putting into service “any physical good” on the EU market, irrespective of its origin – therefore includes goods placed by those outside the EU.

Scope

• Ecodesign requirements will apply to consumer and industrial goods, but excludes food, vehicles, medicinal and veterinary products, living plants and a few other specific exemptions.

Key considerations

• The ESPR is due to enter into force by July 2024. The first delegated acts spelling out specific Ecodesign requirements are expected in the second half of 2025.
• The ESPR will introduce a requirement for a ‘digital passport’ which will make a product’s sustainability-related information accessible for everyone, including customers, authorities, and public interest entities.

How we can help

• Advice on applicability and compliance.