Mandatory waste tracking digital service: integrated impact assessment

Title of proposal: Mandatory Digital Waste Tracking Service

Officials completing the Integrated Impact Assessment (names and name of team): 

Jane Anstee
Tim Edwards
Resource Efficiency and Circular Economy Division

Cabinet Secretary responsible: Huw Irranca-Davies, Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs

Start date: 1 October 2026 (Regulations laid on 3 March 2026)

1.1.    The Digital Waste Tracking System (DWTS) is being implemented across the four nations within the United Kingdom (UK). Regulations will be laid by the Welsh Government, the Scottish Government, the UK Government’s Department for Environment, Food and Rural Affairs (Defra) and the Department for Agriculture, Environment and Rural Affairs (Daera) in Northern Ireland. From 1 October 2026, the first phase of the DWTS regulations will come into effect, subject to Senedd approval. The regulations in Wales will make it mandatory for all permitted waste receiving sites in Wales to use the DWTS except commercial waste sent to Household Waste Recycling Centres (HWRCs).  It is the current Welsh Government’s intention that they will be included in an additional SI in the next phase which is also expected to see digital tracking of waste movements from sites where waste is produced through to waste receiving sites, including while the waste is in transit.

1.2.    The availability of clear and accurate waste data is often cited as a blocker for both regulators and policy makers. In addition, a lack of consistent digital record-keeping in the waste industry is frequently exploited by organised criminals, with paper-based records providing the opportunity to hide evidence of the systematic mishandling of waste.  Ensuring the circularity of resources is a key pillar in delivering Wales’ ‘Beyond Recycling’ strategy.  Introducing a mandatory DWTS is also included in the strategy to track where waste end up .  

1.3.    In 2018, the Independent Serious and Organised Waste Crime Review recommended that mandatory electronic tracking of waste should be introduced at the earliest opportunity.  In addition, Natural Resources Wales’ Second State of Natural Resources Report for Wales 2020 stated that a mandatory waste data tracking system is key to understanding waste and resource flows and to be able to target and focus interventions .  

1.4.     A DWTS will limit the ability of waste criminals to mishandle and misclassify waste, reducing activities such as fly-tipping that negatively impact the local environment and pose risks to human health. In addition, availability of clear and accurate data will support delivery of future policies by the Welsh Government by providing greater detail on waste arisings and treatment routes.

1.5.    Improved waste data also supports private sector investment, giving greater confidence to business and financial markets. Businesses do not currently have the information they need to identify and unlock the potential value of waste materials to reduce raw material costs and develop new revenue streams. This market failure prevents business growth and stifles innovation. Key industry groups have consistently reiterated the importance of a DWTS. The December 2022 consultation with industry groups found 79% of respondents agreed with the waste types being proposed for digital tracking, 73% agreed on the activities proposed to be tracked and 71% agreed with the proposal for when waste tracking would not be required.

1.6.    A DWTS will be implemented in two phases. In phase one, the scope of who will be required to use the service in Wales will be limited to operators of permitted sites where controlled waste is received. The Regulations exclude commercial waste received at Household Waste Recycling Centres (HWRCs) as they will be included in new Regulations during the next phase. The second phase plans to incorporate some of those sites excluded in phase one and enable the tracking of waste from the point of collection through to end destination. It will include data submissions in the system by waste producers, carriers, brokers and dealers in addition to the receiving sites in phase one.

1.7.    A DWTS will, in time, allow full visibility of the movement of waste from “cradle to grave” and support regulators, policy makers and industry in delivering a circular economy. It will improve the coverage, quality, accuracy and timeliness of waste data, and make it more accessible and usable by businesses, regulators and government. The Digital Strategy for Wales identifies digital innovation as a way of leading to greater economic opportunities and creating a society that is more cohesive and digitally equipped. A DWTS will enable waste businesses in Wales to digitise their data and move to a more resilient and future-proofed operational model, unlocking future circular growth and giving communities the opportunity to invest in and develop a Wales that can deliver on net zero, whilst creating sustainable growth.  

1.8.    This reform is a key part of how we are delivering on our Programme for Government commitments to build a stronger, greener economy and take action to decarbonise and respond to the climate and nature emergency.
 
1.9.    NRW will regulate the system implementation with the waste industry as it transitions from the paper-based system to a digital one and will be a key user of the data outputs to support improved enforcement and the prevention of illegal waste activities. NRW has been a key partner throughout the design of the DWTS, alongside regulators from the other nations.

1.10.    Engagement with industry has been comprehensive, both through a public consultation and in the development of the DWTS build involving system testing. With partners across the four nation, there are regular industry forums to discuss progress on the digital build and possible impacts to business. Industry is part of a co-design group along with governments and regulators across the UK, supporting the first phase development of the system. A dedicated GitHub page has been setup to enable full transparency on the digital approach with waste management industry software providers.

1.11.    Local authorities will also be key users. The DWT service will, in time, replace Waste Data Flow, which supports the recording of a local authority’s waste collection tonnages. This data is used to calculate local authority recycling rates which relate to a statutory obligation. In phase one, local authorities with waste permits who receive waste will need to comply with the regulations (except for local authority HWRCs who receive commercial waste).

1.12.    The Net Present Value (NPV) of introducing DWT in Wales is £8.95 million for phase 2 and £-419m for phase 1. It is acknowledged that the NPV for Option 2 (i.e. this specific piece of legislation, as described in the Regulatory Impact Assessment) is negative, but is a necessary stepping stone to delivery of the fuller functionality needed (Option 3, as described in the Regulatory Impact Assessment) which has a positive NPV.  

1.13.    For some parts of the waste sector, there will be costs incurred through the service transition, due to the need to update existing IT systems to link to the DWTS. There will also be annual service charges to support delivery of the service, although these will be minimal and for cost recovery purposes and regulatory charges only. There will be savings for business through the streamlining of reporting and better data availability for targeted business improvements.

How have people most likely to be affected by the proposal been involved in developing it?

8.1 DWTS reforms will require changes to business practices to move from a paper-based to a digital system. A public consultation, held in 2022, was jointly undertaken with the other UK nations’ governments on the proposed reforms.  

8.2 164 of the responses to the 2022 consultation on DWT were from Wales, 23% of the total responses received. A wide range of the respondents were either waste site operators (13%), waste brokers or dealers (8%), waste carriers (18%) or waste producers (18%).  Other groups or individuals representing local authorities, industry through trade bodies, charities and members of the public also responded.  

8.3  As well as the consultation, the waste management sector and local authorities have been able to participate in the private beta testing of the system, sit on a four-nation co-design group and access the digital approach through the GitHub interface. Policy officials and regulators from all four governments have held webinars, spoken to trade bodies and attended conferences to ensure stakeholders are kept updated on the system development.

8.4 Children and their representative groups are not directly affected by the proposals.  Some people with protected characteristics under the Equality Act 2010 may be affected.  The Regulations therefore exempt digitally excluded persons (defined in section 34CA (12) of the Environmental Protection Act 1990) from the digital requirements.  Alternative requirements are instead imposed on such persons to make, keep and provide written records of specified information.  Extract:
““digitally excluded person” means a person—

1. who is a practising member of a religious society or order whose beliefs are incompatible with using electronic communications or keeping electronic records, or
2. for whom it is not reasonably practicable to use electronic communications or to keep electronic records for any reason (including age, disability or location);”

8.5 The service will be bilingual in line with the Welsh Language (Wales) Measure 2011; otherwise, Welsh speakers and Welsh representative groups will not be directly affected.

What are the most significant impacts, positive and negative?

8.6 Ensuring the circularity of resources is a key pillar in delivering Wales’ ‘Beyond Recycling’ strategy. However, the availability of clear and accurate waste data is often cited as a blocker for both regulators and policy makers. In addition, a lack of consistent digital record-keeping in the waste industry is frequently exploited by organised criminals, with paper-based records providing the opportunity to hide evidence of the systematic mishandling of waste.  In 2018, the Independent Serious and Organised Waste Crime Review recommended mandatory electronic tracking of waste should be introduced at the earliest opportunity . In addition, NRW’s Second State of Natural Resources Report for Wales 2020 stated a mandatory waste data tracking system is key to understanding waste and resource flows and to be able to target and focus interventions .  

8.7 A DWTS will limit the ability of waste criminals to mishandle and misclassify waste, reducing activities such as fly-tipping and illegal waste sites that negatively impact the local environment and pose risks to human health. In addition, availability of clear and accurate data will support delivery of future policies by the Welsh Government, thereby providing greater detail on waste arisings and treatment routes.

8.8 Improved waste data also supports private sector investment by giving greater confidence to businesses and financial markets. Businesses do not currently have the information they need to identify and unlock the potential value of waste materials to reduce raw material costs and develop new revenue streams. This market failure prevents business growth and stifles innovation. Key industry groups have consistently reiterated the importance of a DWTS. The 2022 consultation with industry groups found 79% of respondents agreed with the waste types being proposed for digital tracking, 73% agreed on the activities proposed to be tracked, and 71% agreed with the proposal for when waste tracking would not be required.

8.9 A DWTS will, in time, allow full visibility of the movement of waste from “cradle to grave” and support regulators, policy makers and industry in delivering a circular economy. It will improve the coverage, quality, accuracy and timeliness of waste data, and make it more accessible and usable by businesses, regulators and government. The Digital Strategy for Wales identifies digital innovation as a way of leading to greater economic opportunities and creating a society that is more cohesive and digitally equipped. A DWTS will enable waste businesses in Wales to digitise their data and move to a more resilient and future-proofed operational model, unlocking future circular growth and giving communities the opportunity to invest in and develop a Wales that can deliver on net zero, whilst creating sustainable growth.

8.10 The opportunity to reduce the incorrect disposal of persistent organic pollutants (POPs) and other hazardous materials through a DWTS is a potential health benefit to the people in Wales.

8.11 This reform is a key part of how we are delivering on our Programme for Government (PfG) commitments to build a stronger, greener economy and to take action to decarbonise and respond to the climate and nature emergency.  

In light of the impacts identified, how will the proposal: 

• maximise contribution to our well-being objectives and the seven well-being goals; and/or,
• avoid, reduce or mitigate any negative impacts?

8.12 A DWTS aims to enhance the coverage, quality, accuracy and timeliness of waste data in order to make it more accessible and usable for businesses, regulators and government. By leveraging this improved data, we can ensure a prosperous, resilient, more equal Wales by maximising resource value, driving innovation and productivity, and minimising environmental harm - including through the prevention and detection of waste crime.  

8.13 Currently, businesses lack the necessary information to identify and unlock the potential value of waste materials—limiting their ability to reduce raw material costs and develop new revenue streams. This represents a market failure that hinders growth and stifles innovation. Whilst there will be transitionary costs for businesses aligning with a DWTS, the new system will provide businesses in Wales with better data, enabling them to unlock opportunities for circular growth, green job creation and climate action. 

8.14 Introducing a DWTS directly contributes to the delivery of the following Welsh Government well-being objectives:

• ‘Build a stronger, greener economy as we make maximum progress towards decarbonisation’ and ‘Embed our response to the climate and nature emergency in everything we do’.  The service supports moving to a more circular economy through providing data to improve resource efficiency which in turn will reduce greenhouse gas emissions. It will also reduce illegal waste activities that cause environmental harm.
• ‘Build an economy based on the principles of fair work, sustainability and the industries and services of the future’. The system will support the building of an economy based on sustainability, reducing illegal business practices around waste and enabling further growth in the recycling sector.

8.15 The scheme also directly contributes to the Well-being Goals by:

• A Prosperous Wales - supporting the move to a circular, zero waste and net zero carbon Wales by 2050.  A DWTS is expected to increase Wales’ recycling, improve resource efficiency and reduce the use of virgin raw materials in order to help to more effectively capture resources for use within a circular economy.
• A Resilient Wales - contributing to reduced extraction of raw materials and the associated destruction of habitats, thereby also safeguarding biodiversity.
• Reducing fly-tipping and other illegal waste management practices will improve local places and reduce environmental pollution, leading to A Healthier Wales.
• A Wales of Vibrant Culture –supporting Wales’ recognised position as a recycling nation with a recycling culture that people and communities are proud of.
• Globally Responsible Wales – incentivising an increase in resource efficiency and reduction in the use of raw materials, thereby contributing to reduced destruction of habitats and reduced emissions.

How will the impact of the proposal be monitored and evaluated as it progresses and when it concludes?  

8.16 The Defra Collections and Packaging Reforms (CPR) Programme Management Office (PMO) will co-ordinate the compiling of lessons learned from the DWTS project, including signposting to relevant reports such as a lessons learned report on project initiation by the Independent Projects Authority and Defra. Lessons learnt have been applied from other projects, particularly from previous iterations of the Waste Tracking Project and from Extended Producer Responsibility for Packaging.  Also, as set out in the RIA, the intention is to monitor the impact of the waste tracking policy with the view of evaluating the regulatory measures in a post implementation review in 2028.

8.17 Regulators, including NRW, will report on compliance and the integration of the system, working with industry and the waste management sector. The project will take feedback from stakeholders and integrate it into the DWTS’s ongoing development.

8.18 Policy makers within the Welsh Government will continue to receive feedback from industry and local authorities through already established forums for the waste sector. Joint work will continue on a four-nation basis, with governments sharing lessons learned and looking for future improvements to make the system efficient and effective for all parties.