From November 2023, new housing, commercial, and infrastructure developments in England will be required to deliver a mandatory 10% “Biodiversity Net Gain” (BNG) to ensure there has been a positive benefit for nature.
Backed by £16 million funding for Local Planning Authorities, the BNG policies are designed to preserve and restore natural habitats during the development process and beyond – in effect demanding that the biodiversity impact of any new development be quantified at the planning stage, and monitored over time to ensure that positive environmental impacts continue to be felt long-term.
But how will BNG work in practice? And what are the key considerations for developers and landowners?
What is Biodiversity Net Gain (BNG)?
The long-awaited Environment Act officially became law in 2021, placing a crucial responsibility on developers to prioritise biodiversity in their plans. The BNG policies form part of the Environment Act, and have been informed by the Government’s previous consultation on Biodiversity Net Gain regulations. Essentially, BNG is the approach the government is taking to ensure new development or construction projects will leave the natural environment in a measurably better state than it was before.
As per BNG regulations, developers will need to make every effort to avoid habitat loss on the land they plan to develop, and if that is not possible, deliver a viable alternative, be that dedicating an area elsewhere on the site to replicating said habitat, or sourcing land off-site which provides the requisite attributes to deliver BNG. Current estimates show that a minimum of 6,000 hectares of land will be necessary for off-site provision each year.
Where neither option proves viable, developers will have to purchase statutory credits from the government, which will then be used to create new habitats elsewhere in England.
During the planning application process, developers must outline the measures they plan to implement to achieve BNG. These measures must result in a net gain of biodiversity of at least 10%, as calculated according to DEFRA guidelines. Importantly, developers will be legally bound to secure the provision of the BNG plan for a minimum of 30 years.
The total percentage increase takes into account three factors:
- The increase in biodiversity within the designated boundary after development compared to the pre-development level;
- Biodiversity gains outside the site that are credited towards the development; and
- Biodiversity credits purchased from the Government for the development.
In certain situations, the Local Planning Authority may require a percentage higher than the standard 10%.
While the phased introduction of BNG will commence in November 2023, smaller sites will be given until April 2024 to comply with the regulations.
Measuring Biodiversity Value
The BNG of an area of land can be calculated using the Biodiversity Metric 4.0 accounting tool. It can be used or specified by any development project, consenting body or landowner that needs to calculate biodiversity losses and gains for terrestrial and/or intertidal habitats, both before and after the development, including gains provided off-site.
The Biodiversity Metric 4.0 calculates an area’s biodiversity value in units, based on habitat size, quality, type and location, and can assist with land management decisions. The tool should only be used by the following parties to ensure accuracy:
- communities interested in learning about the effects of a proposed local development;
- ecologists or developers conducting biodiversity assessments;
- developers who have commissioned assessments;
- planning authorities interpreting metric outputs in a planning application; and
- landowners or land managers interested in sharing biodiversity units from their sites with others.
There is a separate metric for small sites that have little pre-existing biodiversity value. The simplified metric is designed for use by non-ecologists.
Biodiversity units can be categorised into three types: habitat areas, hedgerows, and watercourses. When determining which units require enhancement, focus should be placed on those that are being impacted more than others. It is important to prioritise “like for like” compensation and enhancement rather than substituting or creating alternative habitats.
To accurately assess the net change in biodiversity, several multipliers must be considered to calculate an overall percentage of change. These factors can greatly impact developer applications and the requirements for achieving BNG.
While BNG enhancement can be implemented anywhere in England, the location of the enhancement has implications on the amount and quality of enhancement that businesses must provide. This is known as the spatial multiplier.
If the BNG enhancement is located offsite within the Local Planning Authority’s (LPA) boundary, the multiplier is set to x1. However, if the offsite enhancement is outside the LPA’s boundary, the multiplier is reduced to x0.75 or even x0.5, depending on the distance. Conversely, multipliers can be increased to x1.15 if the offsite enhancement is situated on land identified by the LPA as strategically important to the Local Nature Recovery Network.
Temporal and risk multipliers also play a significant role in protecting and preserving crucial habitats. When it comes to enhancing said habitats and the biodiversity they support, the longer it takes for the enhancement elements to yield any benefits, the lower the reward in the metric. This is known as the temporal multiplier.
Additionally, the risk multiplier weighs in on the equation. The more challenging it is to deliver the desired benefit through enhancement, the less the developer benefits from the metric.
Planning ahead
To ensure the successful inclusion of biodiversity, developers must consider various aspects from the earliest planning stages. This includes making informed decisions about the land to be used for construction, avoiding areas with significant woodland or protected sites. Additionally, careful planning and design can ensure that the construction process does not result in the loss of biodiversity value.
It will be important to minimise, mitigate, or compensate for any environmental harm through the implementation of the mitigation hierarchy. Long-term management and monitoring of the site’s biodiversity should also be addressed through a net gain agreement.
If a developer does not own the land, collaboration with landowners will be necessary, but developing contracts with management companies can offer further support for the preservation and enhancement of biodiversity.
Natural capital markets
Natural capital markets have emerged as a way for developers to meet BNG obligations through the purchase of biodiversity units.
In these markets, landholders allocate a portion of their land for nature-based projects, which generate biodiversity units or environmental credits. Developers then bid on and purchase these units at a price they are willing to pay. The market is managed by an operator, and contractual relationships exist between the developer and the operator, as well as between the landholder and the operator.
Once the landholder delivers the project, it is verified by the market operator, and the developer can use the biodiversity units to fulfil their development obligation.
A natural capital market solution offers several advantages. Firstly, there is certainty that the generated biodiversity units will be accepted by the relevant authority, as the marketplace has been approved. Additionally, developers benefit from cost-certainty early in the project.
Should you require support in the creation of a natural capital market as a landowner or a developer, or feel you would benefit from advice on the delivery of BNG and your obligations, please do not hesitate to contact us. Our Planning Team has extensive experience in this field and in negotiating related S106 Agreements obligations in this regard.
