RPC opinion: introduction of mandatory digital waste tracking
Published 7 May 2026
漏 Crown copyright 2026
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at /government/publications/rpc-opinion-impact-of-mandatory-digital-waste-tracking/rpc-opinion-introduction-of-mandatory-digital-waste-tracking
Introduction of mandatory digital waste tracking听
| Lead department | Department for Environment, Food and Rural Affairs |
|---|---|
| Summary of proposal | The听proposal听seeks听to听introduce a听mandatory听central听digital听waste听tracking tool, requiring businesses to record all movements听across the 鈥榝ull waste chain鈥�. |
| Submission type | Impact assessment (IA) 鈥撎�19听February听2026 |
| Legislation type | Secondary |
| Implementation date | 2026 |
| Policy stage | Final |
| RPC reference | RPC-DESNZ-5368(1) |
| Opinion type | Formal |
| Date of issue | 听 |
RPC听opinion听
| Rating1 | RPC opinion |
|---|---|
| Fit for purpose | The IA provides sufficient evidence and analysis for the RPC to be able to听validate听the听EANDCB. The assessment of impacts on small and microbusinesses is听sufficient.听The Department has provided a听comprehensive听cost benefit analysis, in addition to satisfactory consideration of the rationale, options wider impact听and monitoring and evaluation. |
Business听impact听target听assessment听听
| Department assessment | RPC听validated | |
|---|---|---|
| Classification | Qualifying provision | Qualifying provision |
| Equivalent annual net direct cost to business (EANDCB) | 拢40.8听million | 拢40.8听million听听 |
| (2025听prices,听2026听pv) | 听 | 听 |
| Business impact target听(BIT)听score | N/A | 听 |
| Business net present value | -拢174.1听million | 听 |
| Overall net present value | 拢172.1听million | 听 |
RPC听summary听听
| Category | Quality2 | RPC comments |
|---|---|---|
| EANDCB | Green | The Department听has sufficiently听set out the assumptions, data, and calculations behind its estimates of the impact of the proposal听to听validate听the EANDCB.听The IA听has accurately听classified听the听business听impacts听as听direct and indirect in line with RPC guidance. |
| Small and micro business assessment听 | 听 | 听 |
| (SaMBA) | Green | The Department has provided an adequate听SaMBA, with a qualitative assessment of the potential impact on small and micro businesses. This could have been improved听by the inclusion of听a monetised estimate听of the impact on small and micro businesses. |
| Rationale and options | Satisfactory | The听Department set outs a sufficient听rationale,听based on听the need to听reduce waste crime听and support regulatory activities听The IA does well to set out the longlisted options that were not fully assessed in this IA, in addition to the听three听options under consideration. |
| Cost-benefit analysis | Good | The IA听provides a clear description of how the cost and benefits were estimated, with听a good level听of detail on the assumptions used. The Department has also听used a sensitivity analysis to test key assumptions. |
| Wider impacts | Satisfactory | The IA听briefly听considers听the听competition听听 |
| and听innovation听impacts.听The Department could have included other wider impacts, such as the possible distributional impacts. | 听 | 听 | 听 |
| 听 | Monitoring and evaluation听plan | Satisfactory | The听assessment includes a satisfactory M&E plan, with a听potential听methodology听evaluation questions and听clear timeline. This could be improved by considering potential听risks and external factors. |
Summary of proposal听
The UK waste sector lacks a unified digital tracking system, creating inefficiencies, enabling waste crime, and hindering progress towards a circular economy.鈥疧ver 190 million tonnes of waste are produced in the UK each year but there is currently no single or comprehensive way of tracking it.鈥疶he government鈥痠s鈥痗ommitted to moving towards a more circular economy,鈥痥eeping鈥痳esources鈥痠n use for as long as possible, extracting听maximum value from them, minimising听waste and promoting听resource efficiency.鈥疶his therefore requires听turning waste that does end up being produced into a resource. To do this,鈥痶he听Department for Environment, Food and Rural Affairs听(Defra) are proposing a听Digital Waste Tracking (DWT)听system,听to听help听regulators in the waste industry鈥痚nsure鈥痶hey鈥痟ave the information about what waste is being produced and where it ends up.鈥��
The Department proposes听three听options听in this听Impact Assessment (IA):听
-
Option 1:听Do minimum (baseline).听
-
Option 2:听Implement a Waste Tracking service that requires all听permitted听receiving sites to听submit听data electronically on all waste received at their sites in near real time.听
-
Option 3 (Preferred): Provide a central digital Wast Tracking service and mandate its use.听
These options have both been subject to a monetised appraisal, with Option 3 鈥楶rovide a central digital Wast Tracking service and mandate its use鈥櫶齜eing selected as the Department鈥檚 preferred听option.听
EANDCB听
The IA鈥檚 evidence and analysis of direct impacts on business is听sufficient听and the听RPC can听validate听the EANDCB figure presented.听
The听Department鈥榮 EANDCB estimate is 拢40.8m (2025听prices,听2026听present value (pv) base听year) over听15听years, based on the听assumption that听the transitional admin costs and increased software costs听will outweigh the听administrative time savings benefits going forward.听This has been estimated using the monetised costs听and benefits听estimated in the IA鈥檚 cost benefit analysis, bringing out the specific direct impacts on businesses.听听
Direct/indirect impacts听
The Department has correctly听identified听which of its estimated impacts are direct and indirect, with听familiarisation听and other transition costs, software听costs听and benefits from removing returns听all contributing to the EANDCB.听The IA听does well to听clearly听set out which impacts听have been听considered direct and indirect by the Department听in a听table, including a justification of why听each听impact has听been handled听as it has.听听
The IA helpfully听considers听why the business service cost charge听should听not count as a business cost.听As this maintenance charge is classified as a statutory tax or fee it听has correctly been excluded from the EANDCB calculations.听The听cost is still described in the IA to give听an indication听of what the cost of this service charge would be.听
SaMBA听
The Department has provided a听good听small and micro business impact听assessment (SaMBA), with a听qualitative听assessment听setting out听how听smaller businesses听could be affected.听The听Department听uses the听SaMBA听to show听that 71.5% of the businesses in scope are micro sized,听with听a further听21.5% being small businesses.听As a听result听exempting small and micro businesses would result in听large scale听data gaps and听weak waste crime听detection,听and听therefore听failing to meet听the policy听objectives.听This justification听is sufficient.听Despite this,听the听IA does听well to听make the case for some areas where exceptions from the requirement would be听permitted, including litter听and incidental waste.听
The IA states that costs听to businesses听will broadly be听fixed, such听as software,听transition听and service charge costs. This means that small and micro businesses are likely听to face a听disproportionate听impact听as these costs will听represent听a larger share of their turnover.听The Department has provided a summary of the costs an individual small or micro business could face, both with and without an exemption, however the assessment would be improved by the inclusion of an estimate of the overall impact听on these businesses through the calculation of a small and micro business NPV.听
The assessment听has provided a good summary of potential mitigations, such as听the听phased听approach not requiring small and micro businesses to听comply听until 2027.听The听IA听also could have been improved听by providing a consideration听of the potential听impacts听on听medium sized businesses.听
Rationale and options听
The IA鈥檚 rationale for intervention is based on听providing听agencies听the ability to prioritise regulatory activities, tackle waste crime and support a shift to a circular economy.听The Department also discusses the different market听failures听that听intervention听could address,听such听as the information failure caused by听insufficient听data held by听authorities听to听plan investment or听investigate waste crime, and the听coordination听failure听caused by听fragmented data across various systems leading to inefficient compliance activity.听The听rationale for intervention听would be improved by using evidence听or specific examples of the issues that have arisen听as a result of听the fragmented data system.听The Department also could have considered听approaches taken in other countries with similar systems.听
The听Department听presents听three听options: Option 1听is the department鈥檚 baseline scenario, Option 2听would implement听a waste tracking service that requires all permitted receiving sites to submit data electronically on all waste received at their sites in near real听time, with Option听3听going further and听providing a mandatory central digital waste tracing service.听Option听3听is the Department鈥檚 preferred听option.听In听addition to this, the IA does well to听set out听the longlisted options that were not fully assessed in this IA,听including details on the critical success factor assessment that resulted in options being advanced to the shortlist.听
Cost听benefit analysis听
The IA听includes听a听monetised听cost-benefit analysis听which sets out the potential听impact听of the proposed听options听on听businesses,听government听and wider society.听Options听2 and 3听have听been assessed against听Option 1, the听鈥楧o Nothing鈥櫶齜aseline scenario, with an NPV of听拢172.1m (2025听prices, 2026听present value (pv) base year) over a听15-year appraisal period.听This is based听on听initial听transition听costs听to businesses,听government capital costs and businesses service charge and software costs being听offset by benefits including听time听savings听for听businesses.听听
Counterfactual听
The IA does well to set out the counterfactual, using听a baseline assessment听to听demonstrate听the costs that would still occur without听intervention. The Department听estimates that the government would face听IT set up costs for the system that it is already legally committed to, in addition to some transition and software costs faced by businesses听as a result of听this system.听The impact of this scheme is uncertain, and so听the IA does not include any quantified benefits for the baseline. The IA should do more to caution听that benefits may be overestimated听as a result of听quantifying baseline costs听of a new IT system but not the potential benefits.听
Evidence听and听Assumptions听
The IA is based on a reasonable level of evidence.听The data and assumptions used in the听modelling听are based on information from听the听Environment听Agency, ONS,听HMRC and surveys conducted by Defra.听These have been clearly听stated听and sourced throughout the costs听benefit听analysis.听The assessment would听have听benefitted听from听evaluating听how听the听cost of waste crime may have changed since the 2018/19听Environmental Service Association (ESA) report.听听
As the Department听anticipates听the lifespan of the new IT system to听be longer than traditional off the shelf systems, the IA uses听a听15-year appraisal period听rather than the expected 10.听This is a reasonable analytical听approach,听however the IA听should听do听more听to听evidence听the claim that this IT system听will have a longer lifespan.听
Methodology听
The IA听provides comprehensive detail on听its听monetised听cost benefit analysis听in Sections听8, 9 and 10,听with听further听detail on听some aspects in Annex听5.听This covers听individual sections discussing costs and benefits to government, businesses and society and听the environment. This is then supplemented听by a section considering the non-monetised听benefits听of the proposed options.听The Department听should听be commended for the clarity and level of detail it has provided to听set out its analysis,听however听could听benefit听from the inclusion of a detailed summary听of analytical assumptions in an annex.听The IA describes digital waste tracking听as听a听鈥檉oundational听enabler for circular economy reforms鈥� and 鈥榠mproved technology integration鈥�, however would听benefit听from听attempting听to describe the scale of this potential impact.听
The IA provides a useful discussion of risks and uncertainties, and a sensitivity analysis to test the robustness of key assumptions.听This听includes听testing the impact of varying levels of waste crime sensitivity and听differing software costs.听The Department has also applied听a 15%听optimism bias听to all costs, with a higher 400%听applied to highly uncertain software costs.听The IA would be improved by clarifying the basis for the specific 400% figure.听The Department also could have considered using a breakeven analysis to test waste crime sensitivity.听
Wider impacts听
The IA provides a听useful听assessment听of the potential听competition听impacts听of the proposed reforms. This includes a听discussion of the likelihood of the new regulations leading to a reduction in illegal activity, with more听opportunities for听legitimate businesses.听This should also result in a level playing field for waste tracking businesses, with听a greater scope for profit.听The Department also considers the potential for increased economic barriers to entering the market, which may reduce the number of firms in the sector.听
The IA could be improved by considering other wider impacts, such as the potential distributional effects of the policy. This could include the varying geographical impacts of a reduction in illegal activity.听
Monitoring and evaluation plan听
The assessment includes a听satisfactory听plan for monitoring and evaluation. The Department has outlined how it plans听on conducting听a Post-Implementation Review (PIR) of the policy, set to take place 5 years after the legislation is implemented, in 2031. The听plan sets听out how the department intends to obtain different听pieces of evidence to assess key听objectives听such as the impact of waste tracking on waste crime, as well as the impact on legitimate businesses.听The Department also does well to听commit听to re-estimating the costs听to business set out in this IA.听
The assessment does well to consider potential听unintended consequences, though this could be improved by including a discussion of the potential听risks听that could affect the evaluation exercise听and听possible effect听of external factors on the proposed intervention.听听
Regulatory Policy Committee听
For further information, please contact听enquiries@rpc.gov.uk. Follow us on X听,听听or consult our website听. To keep informed and hear our views on live regulatory issues, subscribe to听our听.