Biodiversity Net Gain: A New Requirement for Developments in England to Positively Impact the Environment

In Short

The Situation: On January 17, 2024, mandatory biodiversity net gain ("BNG") regulations took effect, impacting most new developments in England.

The Development: From February 12, 2024, developers will be required to provide a BNG of at least 10% for most new developments in England. The aim is to ensure that developments have a positive impact on the natural environment.

Looking Ahead: Some may view this as a further hurdle to development, but many others will view this as an opportunity to make a positive impact on the natural environment and to demonstrate green credentials.

BNG became mandatory for most developments in England from February 12, 2024.

This represents a significant change to the planning system, as most developments in England will now have to protect nature and promote biodiversity. Globally, there is an increasing awareness of the importance of biodiversity and the intrinsic link between addressing climate change and the protection of our ecosystems. The new BNG requirement is indicative of a trend that can be seen with the Taskforce on Nature-related Financial Disclosures, the EU's new deforestation regulation, and a growing interest in rewilding.

In this Commentary, we briefly explain what BNG is and how it will impact developments.

What Is BNG?

The principle of BNG is to ensure that the biodiversity of a site is improved as a result of development.

The Environment Act 2021 and a number of recent regulations have inserted a new Schedule 7A into the Town and Country Planning Act 1990, which sets out the details of the new mandatory BNG condition which is to be automatically imposed on all new planning permissions granted in England (with some exceptions).

The BNG condition will be imposed on residential development comprising 10 or more dwellings or more than 0.5 hectares, and for commercial development where the floorspace is greater than 1,000 square metres or more than one hectare. The BNG requirement will begin to apply to smaller sites from April 2024 with a simplified biodiversity metric. Some developments will be exempt from the BNG requirements—for example, those below a de minimis threshold and householder developments.

How Is BNG Measured?

BNG is measured by comparing the biodiversity value of the site post-development against the biodiversity value of the site prior to the development taking place (i.e., the biodiversity baseline). A minimum 10% net gain must be achieved separately for all different categories of habitat that are within the planning boundary. The biodiversity value is measured in biodiversity units and calculated using the biodiversity metric published by Natural England.

How Is BNG Secured?

The habitat enhancements must be secured through a suitable mechanism and maintained for at least 30 years after the development is completed for the local planning authority to be satisfied that the BNG will be delivered. This can be secured via: (i) a planning condition; (ii) a planning obligation; or (iii) a conservation covenant (being a new statutory scheme under the Environment Act 2021). It will be for the local planning authority ("LPA") to monitor the delivery of the BNG and take enforcement action if commitments are not met.   

Biodiversity Gain Plan

The new BNG condition requires a biodiversity gain plan to be submitted to and approved by the LPA before development can lawfully commence. This plan should contain an assessment of the value of the natural habitats onsite pre-development and post-development, and ensure that at least a 10% BNG is achieved. In practice, we expect that the biodiversity gain plan may often be submitted as part of the planning application, rather than dealt with after the grant of the planning permission.

The biodiversity gain plan must include:

  • Information about steps to minimise the adverse effects of the development on the biodiversity of the onsite habitat and any other habitat;
  • The pre-development and post-development biodiversity value of the onsite habitat;
  • Any registered offsite biodiversity gain units allocated to the development and the biodiversity value of that gain to the development; and
  • Any statutory biodiversity credits purchased for the development.

A mitigation hierarchy is to be followed whereby impacts to biodiversity must first be avoided. Then impacts to biodiversity must be minimised, with onsite biodiversity being rehabilitated and restored. If BNG cannot be achieved onsite, then offsite biodiversity gain opportunities should be pursued and formally registered in the Biodiversity Gain Site Register. Finally, where BNG cannot be delivered onsite or offsite, then the impacts on biodiversity can be offset through the purchase of biodiversity credits.

Biodiversity Credits

If a developer is unable to deliver BNG either onsite or offsite, then as a last resort, they can apply to purchase statutory biodiversity credits from the secretary of state to achieve the BNG goal. The credits purchased will be equivalent to a specified gain in biodiversity value, which can be included in the biodiversity gain plan. However, the secretary of state will price statutory biodiversity credits higher than the market for offsite BNG units, so as to minimise the use of statutory biodiversity credits and encourage the growth of the private biodiversity offsetting market.

Three Key Takeaways

  1. From February 12, 2024, most grants of planning permission in England will be subject to a condition to secure a BNG of 10%.
  2. Before development can commence, developers will be required to obtain the LPA's approval of a biodiversity gain plan demonstrating how the development will deliver a BNG of 10% and ensure this is maintained for a minimum of 30 years.
  3. This is one part of a growing movement to increase the emphasis placed on biodiversity and natural capital. Whilst BNG is something that has been a longtime in the making, it is likely that we will see further regulations seeking to protect and enhance the natural environment in coming years.
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