Biodiversity Net Gain guidance – what you need to know
22 February 2023
In advance of the secondary legislation the sector awaits, DEFRA has issued three useful guidance notes on Biodiversity Net Gain.
We’ll go into the detail further in follow up articles shortly, but here are the key points you need to know now.
General key points
- Avoiding biodiversity loss in development is the first goal. If that’s not possible, you can do one of the following things: a) create habitat on the same site as the development; b) create that habitat off-site; c) buy units from a land manager or other private source; or d) as a last option buy statutory credits from the Government (these will cost more – we should know in the spring what the credits will be valued at).
- The site register, to be managed by Natural England, is expected to go live from November 2023 and will not be a marketplace for buying or selling units. It is intended to be a central register showing the location of offsite habitats offsetting particular development sites.
- There will be a fee to register your BNG gain site of up to £1,000.
- A binding legal agreement for the delivery of the BNG gains (BNG Gain Plan) as well as a habitat management and monitoring plan (HMMP) will be a pre-condition of registration on the site register – a template of a HMMP will be published by Natural England.
- The requirements for BNG will not apply to smaller sites until April 2024. DEFRA also intends to outline de minimis exemptions where no BNG will be required to be delivered shortly (such as householder applications).
- Staged BNG Gain Plans will be allowed for phased developments and a final template is expected to be published this year.
- New guidance will be issued on the relationship between the existing BNG process and the marine net gain process.
- DEFRA says that it hopes “very few biodiversity gain sites are taken out of conservation management entirely at the end of their agreements”. DEFRA is looking at ways to incentivise the continued conservation management of land beyond the end of their agreements through, for example, tax advantages.
- Subject to various conditions, the Government will allow developers to sell the excess biodiversity units created on one development site as off-site gains for another development.
- DEFRA explain that it does not intend to set a time limit on how long biodiversity units can be banked before they are allocated to a development.
- The timeline for when Responsible Bodies can be registered has been pushed back to early this year.
- Local Planning Authorities will be provided with £16.71 million additional funding to prepare for mandatory BNG between now and November 2023.
- DEFRA has confirmed (after much speculation) that you can combine (or stack, as is known in the sector) BNG units and nutrient credits from the same site (see below for further information).
Land Owners and Managers
- If you’re a land owner or land manager the key steps are as follows:
- Find out what habitat needs there are locally
- Consider how you can combine BNG units and other credits
- Get your baseline in place now to work out how many units you can produce – it is expected that the standard Metric will be DEFRA’s version 4.0 which will be published later this year – also expect a small site metric too
- Secure the land by a legal agreement (which must last at least 30 years) – this will be, at the very least, a planning agreement and Habitat Management and Monitoring Plan
- Price your units and work out how you’ll get paid – for example in a lump sum, through staged payment, or based on results?
- Register your land on the BNG site register – NB you can sell your units and allocate them to a specific development before or after the units are registered
Combining income sources – important news on stacking/additionality
- It’s now confirmed (after much speculation) that you can combine (or stack, as it’s known in the sector) BNG units and nutrient credits from the same site.
- Nutrient credits are created by reducing or capturing nutrients that would otherwise end up in protected water bodies.
- If you achieve your projected habitat creation and enhancements before the end of your legal agreement you can sell more BNG units from the same site.
- You can stack private income from BNG units or Nutrient Credits with publically funded schemes if you can measure the new outcomes.
- You can receive BPS and payments under Sustainable Farming Incentive (SFI); Countryside Stewardship (CS); Environmental Stewardship (ES) & Landscape Recovery (LR).
- You cannot sell an enhancement funded by an agri-environment scheme as a biodiversity unit or nutrient credit.
- You can sell biodiversity units and nutrient credits from the same land you used to sell carbon credits. You can do this if you can further enhance the habitat and it does not impact the carbon value.
If you would like to speak to one of our Biodiversity Net Gain experts regarding the new guidance, please do not hesitate to contact Esther Round, Deborah Sharples or Sophia Key who would be pleased to talk you through the guidance and what it means for you.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at February 2023.