Is Biodiversity Net Gain a viable source of diversification?

The Government has now brought into force (on 12 February 2024) the long-expected measure to ensure that the replacement of lost natural habitats as a result of the development of land is a mandatory requirement for planning applications. The question everyone is asking, is Biodiversity Net Gain a viable source of diversification?

What is Biodiversity Net Gain?

The new measure – Biodiversity Net Gain or BNG – was introduced by the addition of a new Schedule 7A to the Town and County Planning Act 1990, by virtue of the Environment Act 2021.    

Subject to a temporary exemption for small scale developments until 2 April 2024, since 12 February all planning applications for development in England will need to demonstrate a minimum 10% increase in biodiversity (BNG) as part of the development. In the words of DEFRA this means that “there will be more nature after a development than before”.

As with other similar requirements relating to nutrient neutrality, BNG can be provided on site, off site or paid for via statutory credits. It is anticipated that most developments will struggle to accommodate BNG on site, and with the cost of statutory credits to be set at a prohibitively expensive level, off site provision is likely to be the most popular route for developers. This may provide an opportunity for landowners who have suitable land and are looking to diversify.

The pros and cons of Biodiversity Net Gain for landowners 

The obvious pro for landowners is the generation of wealth – either capital or income depending on the circumstances – from land that may otherwise not be producing a return. Set against this are a number of factors:

  • the upfront cost to create the necessary increase in biodiversity
  • the additional management requirements for the land (assuming that the management is not outsourced, along with a share of the return)
  • the potential impact to the long-term value of the land.

On the last of these points, land accommodating BNG will be required to be set aside for that purpose for a 30-year period, via either a s.106 planning agreement or a conservation covenant as introduced as part of the new measure. Whilst this is not dissimilar to the requirements in relation to nutrient neutrality offset, which  usually requires land to be offset for 80 years, because of the need to increase biodiversity for BNG purposes, the concern is that the land in question may never be able to be put to a different use even once the 30 year period has expired.  

If you are interested in considering making land available for off-site BNG, we would advise taking the following steps:

  1. appojnt an ecologist to carry out an assessment of the land to determine the current habitat value of the land (as per the prescribed metric) and the enhancements required to bring about the BNG;
  2. speak to a land agent to establish the market for BNG off set land and likely values – as with nutrient neutrality schemes, this is based on supply and demand and one would expect the highest returns to be available to landowners who are in the first cohort of off-site providers;
  3. check with your solicitor to ensure that there are no legal constraints on the land that could prevent its use for off-site BNG;
  4. engage with the local authority planning department to ascertain the prospects of success for a planning application for BNG off site provision; and
  5. submit a planning application and instruct your solicitor to agree the documentation required to put into effect a BNG scheme for developers.

How Moore Barlow can help

If you are interested in finding out more about how Biodiversity Net Gain off set works or have identified land that you think may be suitable for the provision of BNG off set, do contact our expert rural legal team who would be happy to help.