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You might like to read more in depth information about The Clean Air Act of 1956 and 1968.
A Defra Exempt stove has passed a lab test where its emissions are measured at its rated output and at a reduced rate. This is to help reduce air pollution in towns and cities that are Smoke Control Areas. A Defra Exempt stove can generally be used to burn wood in a Smoke Control Area - it actually depends what fuel the lab test was carried out with but this is nearly always firewood.
It is worth noting that the Ecodesign legislation, in effect since 2022, establishes emissions limits that are arguably even stricter than those set for Defra Exemption. However, the framework does not include the low output test. We may well see the introduction of an additional low output test for stoves that can be used in Smoke Control Areas after 2022.