Policy paper

Reforming the waste exemptions system

Published 15 July 2025

Applies to England and Wales

Introduction

Waste exemptions allow waste operators to carry out certain low risk waste activities under a registration scheme, without needing an environmental permit.

We know that the current system is abused by criminals, which damages the environment, blights communities and undermines legitimate businesses.
This policy paper explains the approach that Defra and the Welsh Government are taking to tackle those issues.

We will reform the system by amending the Environmental Permitting Regulations, referred to as ‘the regulations’ throughout this policy paper.

1. Summary of changes

The general changes to waste exemptions include:

• prohibiting exemptions at permitted sites
• limited how many exemptions can be used at a site
• increased requirements for waste operators to record information about exemptions
• technical changes to waste codes and conditions to increase consistency

Exemptions where conditions are changing:

• U1 – Use of waste in construction
• T4 – Preparatory treatments
• T6 – Treatment of waste wood
• T12 – Manual treatment
• D7 – Burning of vegetation at the place of production only
• S1 – Storage in containers
• S2 – Storage in a secure place

Exemptions that will be removed:

• U16 – Use of depolluted end-of-life for parts
• T8 – Mechanically treating end-of-life tyres
• T9 – Recovery of scrap metal

2. Prohibiting the use of waste exemptions in specified circumstances

Waste operators commonly register multiple exemptions at a single site, often to use alongside already permitted activity. This:

• intensifies waste operations and increases the risk profile of a site
• makes it difficult to establish which activities are covered by the permit or by multiple exemptions, and so determine regulatory compliance
• complicates monitoring and increases costs for the regulators
• is common at sites of concern where illegal activity is discovered

Action will be taken to address these challenges.

2.1 Prohibiting the use of exemptions at, or adjacent to, permitted sites

We will prohibit the use of waste exemptions at permitted sites.

Waste exemptions are for activities where the risk has been assessed as low on the basis of that activity alone. Similarly, environmental permits are granted subject to conditions, on the basis that the permitted activity is the only waste operation being carried out on the site.

Where a permitted activity and exempt activity are carried out together, the cumulative risk profile will not have been assessed and may pose an unacceptable risk to people and the environment. Examples of this include registering waste exemptions to allow increased quantities of waste, additional waste types, or different and additional treatment processes to those authorised by the environmental permit.

When operators have registered exemptions that extend their waste activities beyond the limits and conditions of their environmental permit, they will need to apply for a permit variation.

Direct links

We will introduce the concept of a ‘direct link’, which will be defined in the regulations and explained further in guidance.

A ‘direct link’ is where an exempted waste activity is carried out adjacent to a permitted waste operation and either:

• is carried out under the control of the same operator or
• uses the same staff, equipment or infrastructure (without which the exempt waste activity could not take place)

This term helps identify where an exemption is prohibited adjacent to a site permitted for waste management activities.

Similar to stopping exemptions being registered at permitted sites, we are prohibiting exemption registration on adjacent sites where there is a direct link. The regulators have processes in place to allow trials involving wastes to take place. These should be agreed in advance of commencement with the regulator on a case-by-case basis.

We will amend the regulations to remove the regulation so that any exemption registered at a permitted site, or where there is a direct link, will be invalid.

The onus will be on the permit holder to make sure that they are not using an exemption to extend their permitted activities in this way. Guidance for waste exemptions will be amended to clarify the type of situations this will apply to.

It is already the case that exempt waste operations cannot be carried out at installations, under Regulation 5 of the regulations. These reforms will ensure consistency with that approach, by making it clear that waste exemptions cannot be registered where there is a direct link to an installation or permitted waste site.

2.2 Limiting the number of exemptions registered at a site

The regulations currently allow the registration of multiple exemptions at a single site. This can result in a number of small-scale, low risk activities having a cumulatively large-scale and complex risk profile.

Combined activities often pose a greater environmental risk and should be regulated through a permit.

Storage limits

We will make it clear in the regulations that when more than one exemption is registered at a site, the storage limit for each waste type is limited to the lowest limit set out in the exemptions registered.

For example, an exemption allowing 50 cubic metres (m3) of wood to be stored, together with another exemption allowing 60m3 of wood to be stored, would not allow 110m3 to be stored. Instead, an overall storage limit of 50m3 would be allowed (the lowest limit of the 2 exemptions).

It does not matter in what order these exemptions are registered.

The S1 and S2 exemptions are for the secure storage of waste pending recovery elsewhere. These exemptions therefore cannot be registered at a site where there is a direct link to any other waste exemption.

Where an operator registers more than one exemption at a site, they must:

• comply with all conditions and limitations of the registered exemptions
• make sure that the total amount of waste at that site at any one time and in any period of time does not exceed the lowest limit in the exemptions registered

A ‘site’ is an area of land or a continuous linear strip of land on which a waste activity takes place. We will provide guidance to further clarify the meaning of ‘site’, including in relation to farms and linear networks.

3. Requiring additional information to support effective regulation

Very little information is currently gathered about exempt waste activities. This makes it difficult for the regulators to prioritise compliance activity and inspections.             

3.1 Compulsory requirement for operators to keep and make records available on request for all exemptions.

We will amend the regulations to include a general record-keeping and production duty in relation to all exempt waste operations.

Some record keeping requirements already exist for a subset of exemptions currently listed in paragraph 17 of Schedule 2 to the regulations. This requirement will take effect immediately once the amended regulations come into force.

Operators will be expected to complete a form (provided by the regulators) for the specific exemptions they are registering. This form will include information such as the specific waste types handled under their exempt activity and details of waste throughputs. This record must be made available on request at the registered site, or by a specified date if the operator receives a written request from the regulator.

Operators of an exempt waste activity will be expected to retain records for the duration of their exempt activity and for one year following the cessation of their activity. Further detail will be provided through guidance.

3.2 The requirement for operators to keep records in an electronic format and/or in a system identified by the regulator

We will amend the regulations to stipulate that records must be made available to the exemption registration authority in an electronic format and/or in an IT system identified by the regulator where required.

As with the requirement to keep records, this requirement will take effect immediately once the amended regulations come into force. The regulator will determine when and how often they will require records to be made available (for example, as part of a targeted compliance check, or on a regular basis).

3.3 The ability for regulators to impose additional information requirements for individual exemptions on a case-by-case basis at registration, on an ongoing basis, or at the end of an operation

The regulations already require that an operator, seeking to be registered in relation to a waste operation, must notify the exemption registration authority with a description of the waste operation.

We will extend the ‘relevant particulars’ in Schedule 2 Paragraph 10 to allow regulators to request additional information at registration, on an ongoing basis, or at the end of an operation (if required). This additional information could include for example:

• how long the operator expects the operation to last
• records of waste managed during the last registration period (for renewals)

4. Changes to individual exemptions

 We will change the conditions of 7 of the 10 waste exemptions of most concern and remove 3 exemptions.

The details and rationale for each exemption is set out in this section.

4.1 Exemption U1 - Use of waste in construction

We will change the conditions of the U1 exemption to minimise the risk to the environment and human health from abuse of the exemption.

We will do this by restricting waste types, quantities and activities in relation to specific construction activities, rather than specifying an overall limit for the exemption.

We will also change the name of the U1 exemption from ‘Use of waste in construction’ to ‘Use of wastes to construct and maintain surfaces and barriers’. This makes the purpose and intention of the  exemption clearer.

The proposed changes mean that the exemption will be more restrictive than it is currently. However, there are alternative options available that avoid the need for an environmental permit. Waste-derived materials can be used without a permit if they have been fully recovered and meet end of waste criteria. This could be by using material that is compliant with a quality protocol or resource framework.

Further details can be found in Annex 1.

There will be a transition period of 12 months from the date the amendments come into force.

4.2 Exemption U16: Using depolluted end-of-life vehicles (ELVs) for parts

High levels of illegal activity associated with the U16 exemption have been identified by the regulators.                                                                           

Due to the negative impact that this abuse has on the environment, and concerns raised by the waste management industry, we will remove the U16 exemption.

This will mean operators currently using the U16 exemption will need to apply for an environmental permit to operate, or cease their related activities.

We do not foresee any negative impacts from removing this exemption. The change will provide more robust regulatory control.

There will be a short transition period of 3 months from the date the amendments come into force.

4.3 Exemption T4: Preparatory treatments, such as, baling, sorting, shredding

Defra and the Welsh Government consider that the T4 exemption does have a role to play in supporting the waste collection and recovery market, providing the waste activities involved are limited to make sure they are low risk

For this reason, we will change the conditions of the T4 exemption.

We will reduce the storage limits and amend the conditions for specified waste types, to ensure more frequent turnover and reduce stockpiling. We will also amend the general conditions to minimise fire risk. We will amend the title of the exemption from: ‘Preparatory treatments (baling, sorting, shredding etc.)’ to ‘T4 Preparatory treatment of waste’.

Further details of the changes can be found in Annex 2.

There will be a transition period of 6 months from the date the amendments come into force.

4.4 Exemption T6: Treating waste wood and waste plant matter by chipping, shredding, cutting or pulverising

Despite the lower level of illegal activity associated with this exemption compared with others, the risks of fire from the incorrect description of waste wood justify the need for change.                                               

We will change the conditions of the T6 exemption, to minimise the risk to people and the environment.

We will reduce the storage limits and amend conditions for specified waste types to ensure better turnover and reduce stockpiling. We will amend the title of the exemption from: ‘Treatment of waste wood and waste plant matter by chipping, shredding, cutting or pulverising’ to ‘Treatment of waste wood and plant matter’.

Further details of the changes can be found in Annex 3.

There will be a transition period of 6 months from the date the amendments come into force.

4.5 Exemption T8: Mechanically treating end-of-life tyres

Given the fire risk from the storage of tyres, and evidence that exemption limits are being exceeded by significant amounts, we have decided to remove the T8 exemption.

Operators currently using this exemption will need to operate under permits or cease related activities.

We do not foresee the costs of removing the use of this exemption outweighing the benefits to environmental protection and public safety and expect to see increased compliance for those that move into the permitting regime. We also expect to see a reduction in the types of criminal activity associated with the misuse of the T8 exemption. We anticipate this will benefit legitimate operators who are currently undercut by rogue operators.

Removal of the T8 exemption will not affect those that produce and only store waste tyres as part of their business (including tyre fitters, garages, roadside recovery operators). Storing tyres prior to collection at their own premises is covered by Non-Waste Framework Directive (NWFD) exemptions.

Due to the negative impacts of illegal activity on legitimate businesses and associated risk to the environment and human health, there will be a short transition period of 3 months from the date the amendments come into force.

4.6 Exemption T9: Recovering scrap metal

Given the level of risk in relation to fire, and the need for proper site drainage and compliance monitoring, we will remove the T9 exemption.

This will mean operators currently using this exemption will need to operate under permits, or cease activities allowed under the T9 exemption. The removal of this exemption will help level up the metal recycling sector and apply equally to all operators within the sector.

Due to the high amount of illegal activity associated with this exemption and the negative impacts on legitimate businesses, there will be a short transition period of 3 months from the date that the amendments come into force.

4.7 Exemption T12: Manually treating waste

Some wastes allowed under the T12 exemption are low value and difficult and costly to treat, so the abandonment risk is high.

We will therefore change the conditions of the T12 exemption. We will introduce stricter conditions in order to minimise the risk (including of fire) of waste being stockpiled and then abandoned under a T12 exemption. Mattresses are difficult to separate into their constituent parts for processing, are highly combustible, and so will be removed from this exemption. Further details of the changes can be found in Annex 4.

There will be a transition period of 6 months from the date the amendments come into force.

4.8 Exemption D7: Burning waste in the open

We will change the conditions of the D7 exemption. We will adjust storage time limits and conditions and remove the use of certain types of waste to minimise risk to the environment and human health.

We will amend the title of the D7 exemption from: ‘Burning waste in the open’ to ‘Burning vegetation at the site of production’. This name change will provide greater clarity on the scope of activities the D7 exemption covers. Operators that wish to carry on activities that will not be allowed under the revised D7 exemption will need to be authorised to do so under an environmental permit or cease their D7 exemption related activity.

Further details on the changes can be found in Annex 5.

There will be a transition period of 6 months from the date that the amendments come into force.

4.9 Exemption S1 (Store waste in secure containers) exemption S2 (Storing waste at a secure site and exemption S3 (Storing sludge)

We have reformed and renamed the S1 and S2 exemptions to better reflect material that should be stored in either a secure container or a secure site, pending recovery elsewhere.

Our wider reforms to the waste exemptions regime and prohibition on registering multiple exemptions at a site, or at or adjacent to a permitted site, will secure the necessary protections.

We will also increase the storage limits in Non-Waste Framework Directive (NWFD) exemption 3 (temporary storage of waste at a site controlled by the producer) and NWFD exemption 4 (temporary storage at a collection point) from 50 cubic metres to 100 cubic metres. These NWFD exemptions are often overlooked but allow waste to be stored without the need for an environmental permit or exemption registration.

Further details of these changes can be found in Annex 6.

There will be a transition period of 12 months from the date that the amendments come into force for the S1 and S2 exemptions.

5. Technical changes to exemptions

5.1 Waste codes

We will change waste codes in certain exemptions to make the waste types clearer. Details of our changes to the waste codes can be found in Annex 7.

5.2 Other amendments to the Environmental Permitting Regulations

A necessary minor amendment to an amendment to the Environmental Permitting Regulations made by the Waste (Circular Economy) (Amendment) Regulations has been identified. This will correct a typographical error and does not alter the purpose of the exemption regime or the regulations.

6. Standard rules permits

We recognise that there may be a need for new and amended standard rules permits as a result of the change to, or removal of exemptions covered by these reforms.

Standard rules permit applications are an alternative to more complex bespoke permit applications. The regulators conduct separate consultations where necessary on new standard rules permits. Consultations will be held in instances where the regulator considers common waste operations that need a permit as a result of the revisions to the waste exemptions regime and are not covered by existing standard rules permits (as set out on GOV.UK and Natural Resources Wales’s website).

7. Transitional arrangements

The amendments mean that a number of activities that currently operate under a registered exemption will require an environmental permit.

The general principles of our approach to transitional arrangements are:

• to prioritise changes during the transition based on environmental risk and any need to enhance the regulators’ ability to exercise appropriate controls
• to allow reasonable time periods for operators to make informed judgements about the options open to their business and to take the necessary steps to comply with new regulatory requirements
• to allow reasonable time periods for operators to make an application for an environmental permit, where applicable, and for the regulators to determine the applications
• to minimise the administrative effort and costs for operators who are able to continue to use waste exemptions
• those operating under an exemption not listed within this document will not need to re-register, except as part of the usual renewal process
• those operating under an exemption for which the conditions are being changed will not need to re-register, but they will be expected to comply with the new conditions

We have decided to stagger the reforms to the waste exemptions regime. We will include a transitional date by which each exemption will either be removed or amended.

The transitional period for each exemption has been considered in line with the general principles that have been set out above. Further detail when the amendments will come into force will be shared in due course.

Table 1: Transition periods for each exemption that will change

Exemption	Changing conditions or removal	Transition period (time until regulations come into force, once made)
U1 – Use of wastes to construct and maintain surfaces and barriers	Changing conditions	12 months
U16 – Use of depolluted ELVs for parts	Removal	3 months
T4 – Preparatory treatment of waste	Changing conditions	6 months
T6 – Treatment of waste wood and plant matter	Changing conditions	6 months
T8 – Mechanically treating end-of-life tyres	Removal	3 months
T9 – Recovery of scrap metal	Removal	3 months
T12 – Manual treatment	Changing conditions	6 months
D7 – Burning of vegetation at the site of production	Changing conditions	6 months
S1 – Temporary storage of waste in secure containers pending recovery elsewhere	Changing conditions	12 months
S2 – Temporary Storage of waste at a secure site pending recovery elsewhere	Changing conditions	12 months

Table 1: Transition periods for other changes

Exemption	Transition period (time until regulations come into force, once made)
Prohibiting the use of exemptions at/adjacent to permitted sites	6 months
Limiting the number of exemptions registered at a site	6 months
Compulsory requirement for operators to keep and make records available on request	Immediately
Requirement for operators to keep records in an electronic format	Immediately
Changes to waste codes	Immediately

For waste exemptions which will be removed, we will make provision in the regulations for operators to continue operating under their existing exemptions after the transition date. They must, however, submit a permit application to the regulators before the transition date.

The existing exemption conditions will continue to apply after the transition date, or until the registration of the exemption expires until such time as the permit application is determined. The regulators will set out an approach for managing exemptions where the permit application is incomplete or rejected and will communicate this to industry directly.

For those waste exemptions for which the conditions are to be amended, operators will be able to operate under their existing exemptions (including exemptions that need to be renewed) until the end of the transition period. At the end of the transition period, all exempt operators must comply with the new conditions, or the operator must have made an application for an environmental permit, or the activities must cease.

New exemptions subject to transitional provisions that are registered after the amendments to the regulations can also operate under the existing exemptions until the end of the transition period.