Consultation Outcome: Biodiversity Net Gain

The Government’s response and summary of responses to the January 2022 Biodiversity Net Gain (BNG) regulations and implementation consultation[1] was released yesterday (21 February 2023), together with guidance notes[2] on what BNG is; the selling of biodiversity units as a land manager; and combining environmental payments (stacking). 

Much of the response offers confirmation on the approach provided during consultation.  In summary and by way of a recap, here are some key points to take away: 

• There is an intention to make exemptions for developments impacting habitats of an area below 25m2, as well as for householder applications and enhancement projects; 
• Irreplaceable habitat will be excluded from quantitative mandatory gain objective and subject to separate information requirements; 
• BNG requirements will apply for NSIPs without any broad exemptions beyond those on irreplaceable habitats; 
• Government will continue to incentivise a preference for on-site gains over off-site gains; 
• Government intends to commence mandatory BNG with 30 years set as the minimum period for which biodiversity gain sites must be secured; 

• Landowners, managers, local authorities will be able to create or enhance habitats for the purpose of selling biodiversity units provided that they are able to meet requirements of the policy, additionality, register eligibility requirements and that there are no adverse impacts on priority habitats; 
• Local authorities will not be able to direct buyers towards their land in preference over other suppliers to the market; 
• Developers will be allowed to sell excess units as off-site gains for another development, provided that the excess gain is registered and that there is genuine additionality for the excess units sold; 
• Government will not provide a centralised trading platform for biodiversity units or act as a broker; 
• Habitat created or enhanced after 30 January 2020 will be eligible for registration and sale of the associated biodiversity gains, provided it meets the other criteria of the biodiversity gain site register (habitats created or enhanced before this date will need to be re-baselined); 

• There is no intention to set a time limit on how long biodiversity units can be banked before they are allocated to a development; 
• Natural England will establish, operate and maintain the Biodiversity Gain Site Register, which will record allocations of off-site biodiversity gains to developments and make this information publicly available – to be opened for registrations by November 2023; 
• The Biodiversity Gain Site Register will not act as a marketplace platform, nor will it assess the suitability or additionality of the proposals; 
• At least 10% of the total post-development biodiversity score should be from measures which are not undertaken to address impacts on protected species or protected sites, in context of additionality; 
• Natural England will sell statutory biodiversity credits on behalf of the Secretary of State. Credit sales will be facilitated by a digital sales platform which is currently being developed and tested; and 

• Further funding of up to £16.71 million for LPAs will be provided to prepare for mandatory BNG between now and November 2023. 

There are still some unanswered questions, definitions, and further information that will be clarified as part of the secondary legislation and accompanying guidance. 

Facilitating the potential to trade additional units will really make a difference to biodiversity in the world of business. Conservation costs money.  By allowing developers to sell excess credits, this has the potential to be a positive mechanism whereby we are incentivised to redirect finance back into nature, where it is needed the most in order to reverse the decline in biodiversity loss. 

To unlock this potential, the devil will be in the detail.  The consultation response clarifies that in order for developers to sell excess biodiversity units, we must ensure the excess gain is registered and that there is genuine additionality for the excess units sold.  This means that in any given development, the units that could be traded will be those that are over and above the gains required by the original development, which would be delineated by the planning requirements for a given scheme. A large emphasis would then be on the development’s biodiversity gain plan to ensure additionality is properly documented, separating out habitats that are intended for species/protected site mitigation, from habitat gains over and above the Local Planning Authority permission requirements. 

Whilst this position is under review with regard to whether or not this approach would impose an artificial ceiling on the gains achieved, it provides a potential way forward to deal with the challenges of additionality when it comes to biodiversity.  The question raised would then be that of integrity.  Given the Gain Register would not act as a verifier or validator of units, standards would then be regulated through the legal agreements to secure the land, the planning obligation (S106) or conservation covenant and/or third-party habitat banks, brokers or trading platforms that may enter the market.   

As a solar investor, developer and operator, we act as land managers across extensive portfolios. We know what we need to do to ensure that we are improving biodiversity value across our sites and there is growing clarity on how we can really unlock that potential to maximise BNG across our portfolio. 

 [1] https://www.gov.uk/government/consultations/consultation-on-biodiversity-net-gain-regulations-and-implementation/outcome/government-response-and-summary-of-responses 

[2] https://www.gov.uk/government/collections/biodiversity-net-gain#land-managers-guidance