What will Biodiversity Net Gain mean for us all?

What will Biodiversity Net Gain mean for us all?

In previous articles we have often touched on the considerations of sustainability and the fact that a businesses’ environmental impact is becoming more and more of a consideration. The focus of these past comments has been on what businesses can choose to do themselves to enhance their sustainability profile. However, we are now beginning to see legislation on what businesses and individuals must do to protect the future of the environment.


One of the most interesting, and still rarely mentioned new developments, is Biodiversity Net Gain (BNG).


BNG is new legislation to ensure that the development of any land or change in said land use provides more ecological benefits to the environment than were there before the development. Developers must aim to avoid any loss of habitat in the development land and if this is not possible, they must create additional habitats, whether this is on-site or off-site. This means a development will result in more, or better-quality, natural habitat than there was before development.


BNG will apply to most new major development under the Town and Country Planning Act (TCPA) from January 2024 and to small sites from April 2024. The government has committed to BNG applying to Nationally Significant Infrastructure Projects from November 2025.


Section 98 of the Environment Act 2021 states that biodiversity net gain must be a condition of planning permission, but the scheme will not apply to householder applications for a single dwelling and there will be a simpler process for the development of small sites between one and nine dwellings or where the site has an area of less than 0.5 hectare.


How is Biodiversity Net Gain calculated?


Areas of land which are proposed for development will be given an initial biodiversity score calculated based on Defra’s Biodiversity Metric 4.0. This metric which will assign a number of units per acre based on the relative value of the land for biodiversity before development.


The number of units allocated will depend on the condition of the area, its ecological importance, location and the rarity and diversity of the habitat and the species within it.


A post development number of units for the same area is also calculated (taking into account any biodiversity improvements developers have done) with the variance between these two totals expressed as a percentage. Developers must have included enough environmental investment in their projects to increase the number of units by 10%. They must be able to maintain these improvements for a minimum of 30 years.


The biodiversity score can vary on several factors including variety of grass types, streams and rivers, weeds and wildflowers. Rivers, hedgerows and area habitats are considered independently and are not interchangeable, ie you are unable to substitute the loss of one type by providing another type.


Developers must also follow the mitigation hierarchy which guides users to limiting the negative impacts of development projects by ensuring projects work in the following order:


1.     Avoiding any potential biodiversity impacts, by carefully considering the placement of infrastructure or timing construction so it does not coincide with any nesting seasons

2.     Minimising the impacts of the development by considering the duration and intensity of impacts which cannot be avoided

3.     Using onsite measures to enhance the habitat where avoidance or mitigation is not possible

4.     Compensating for any adverse impacts which cannot be avoided, mitigated or enhanced onsite, by using off-site enhancements by purchasing land from landowners located elsewhere in England (known as habitat banking)


Habitat Banking


Habitat banking is where investors pay other landowners to create new habitats and to manage the land and maintain the habitat to a required standard for a commitment of 30 years. Land parcels purchased for habitat banks are usually over 10 hectares in size and the best uplift comes from the conversion of arable farmland into woodlands, wood meadows, species-rich grasslands and wetlands. This can provide a guaranteed income source for landowners who sell their land for a 30 year period with no financial risk and no reliability on commercial markets.


What are the benefits of BNG?


–     BNG provides security that local ecosystems will not suffer as a consequence of any development

–     BNG can help to mitigate the effects of climate change as an increase in woodland areas can help withdraw carbon dioxide from the atmosphere as well as providing localised shade and cooling effects in warmer climates

–    BNG aims to improve quality of life by providing more green spaces, encouraging pollinators to the area to improve the variety of plants and vegetation, and improve soil conditions by reducing soil erosion

–    By contributing to and increasing BNG, developers can enhance their public image and be seen to be environmentally responsible

–    BNG can create greener neighbourhoods which are more desirable and sought after, boosting the local economy


What are the challenges?


–     It can be difficult to measure the net gain and there is currently little guidance around these measurement standards. There are concerns that inaccurate reporting will undermine the main aim of the scheme and will lead to a continued degradation of biodiversity in England

–     The cost of implementing sufficient biodiversity can soon add up, and developers may pass these costs on to consumers or local councils

–    There is a lack of resources within local authorities to ensure someone with ecological expertise can review planning applications

–    There is also currently a lack of awareness and training for developers, landowners/managers and farmers, including a lack of clarification on when the BNG site will become effective – whether this will be before the development begins or triggered at a point of deemed occupation


What does this mean for you?


If you are currently holding land or considering purchasing land, Biodiversity Net Gain should definitely be on your radar.  It will require a significant amount of consideration and planning from developers; you will need to consider how to use the mitigation hierarchy to minimise the ecological impacts of the development and give thoughts as to how it can affect your planning application.


For current landowners not wishing to develop themselves but with spare land, consideration should be given to Habitat Banking. This scheme can be a guaranteed source of income which can help alleviate the financial loss of the Basic Payment Scheme, however it does require a commitment that these habitats will be secured, managed and maintained for a period of 30 years.


Biodiversity Net Gain is very much in its infancy and more changes may occur, but that does not mean it does not warrant forethought. If you would like to know more please get in touch with your Relationship Partner or one of the team on 01482 888 820.


Published by Sowerby Chartered Accountants, January 2024