The draft Nature Restoration Levy Regulations are here.

Something happened yesterday that we need to talk about*.

The draft Nature Restoration Levy Regulations 2026 were published, along with a draft explanatory memorandum, which brings us one step closer to EDPs and the Nature Restoration Fund becoming a reality.

The hot takes that no-one asked for

My first reaction: If I am honest, at first glance the regulations are a bit… well… CIL-y… Although, without the schedule full of algebra, which does make them a little more user friendly. There are only two equations in here, and they aren’t that scary, I promise.

My second reaction: The regulations don’t give you a complete picture of how the Nature Restoration Levy Process is actually going to work.

For one thing, we don’t have the EDPs that sit alongside them as yet, nor the accompanying charging schedules – so that part of the picture is temporarily absent.

More to the point, however, there are a number of things that will need to happen before you get to the assumed starting point in the draft regulations (i.e. how people get to the point of triggering liability under the regulations in the first place).

How people engage with Natural England over the levy, to obtain quotes and decide whether they actually want to use the scheme or not, will be critical to how this ends up working in practice. It will govern how “user friendly” the levy turns out to be, and ultimately how widely it ends up being adopted.

Anecdotally, I have heard that one of the reasons why Natural England’s nutrient mitigation scheme may have had a lower than expected uptake was because the initial credit allocation** process, which required developers to bid for credits within set windows regardless of where they were in the site design or planning application process, was… well… a bit clunky…

So early guidance on how *that* part of the process is intended to work for the Nature Restoration Levy would be extremely helpful.

Now I have got that out of my system… Let’s get into the actual law

What the Regulations say about how the Nature Restoration Levy is intended to operate

As I mentioned at the start, the Regulations (which I will call the NRL Regs from here on out), do not give a complete overview of how the levy will operate. Some core parts of the process sit outside of the scope of the NRL Regs, for example:

• The levy rates (i.e. how much a developer will have to pay towards a specific set of nature restoration efforts) are expressly left to be set by relevant environmental delivery plan that you are paying towards – and these haven’t been published as yet – although (like CIL) the NRL Regs do contain the rules around how rates are to be set; and
• The process by which a developer contacts Natural England to request to pay into the Levy (as opposed to delivering or accessing a solution under the current system) is governed by s.72 of the Planning and Infrastructure Act – which is a little vague about the whole thing…. this vagueness has found its way into parts of the NRL Regs – for example the definition of “relevant development” in reg. 2 is “means the development(e) for which Natural England has accepted a request to pay”, the definition of “request to pay” ties back to s.72, and s.72 is (as previously described) somewhat fluffy about the whole thing.

All of which means that we will ultimately end up needing to cross-refer between Charging Schedules contained in EDPs, the NRL Regs, PIA and (hopefully) government guidance whilst the system gets up and running.

NRL Process

The overall process described in the regulations looks a bit like this:

1. Charging Schedules (Part 3, Chapter 1 of the NRL Regs)

Natural England creates a charging schedule for a particular EDP as part of drawing up that environmental delivery plan (which has to be approved by the Secretary of State). The charging schedule sets the rates that a developer will ultimately pay.

When setting these rates, Natural England must have regard to the actual and expected costs of:

• delivering, managing and monitoring the conservation measures in the EDP; and
• the cost of running the EDP itself

Rates can be reduced to take account of the likelihood of other funding streams being available to deliver the EDP, but the promise of allowing Natural England to take into account the effects of the levy on the viability of development (contained in s.75(1)(b) of PIA) has not materialised.

The impact of the levy on development viability is not something that Natural England can take into account as the NRL Regs. are currently drafted.

Natural England is also given a lot of flexibility over how rates can be set – both in terms of whether it is charged per dwelling/ unit or on a sqm basis, and in terms of how differential rates are set. Which means that the charging schedules for each EDP could look very different.

Charging rates are index linked – with indexation running from the date of the EDP until the date of payment.

2. Electing to pay the NRL and How the Levy is secured

Once the rates are set and everything is up and running, developers can contact Natural England to request to pay the levy and, if that is accepted, they receive a “commitment to pay”. As previously stated, this part of the process is not in the NRL Regs and presumably will be set out in guidance in due course.

We do, however, know that these commitments can be cancelled and will be time limited. A developer will only have a fairly short window between obtaining the commitment and submitting their planning application.

We know this because one of the reasons for cancelling a commitment to pay (Chapter 5 and the Schedule) is that the developer has not submitted their application within “the period of 6 months beginning with the day on which the request to pay was accepted by Natural England”

Given that the definition of planning permission includes NSIPs, Listed Building Consents and marine licences as well as TCPA planning permissions that might not be much time to get an application in. Interestingly general consents (such as the GPDO) are not uniformly included in the definition, but dip in and out at different points of the NRL Regs which can be a smidge hard to follow.

Once you have the commitment to pay there is then a mysterious gap – about which the regulations are completely silent. However, given that the NRL is secured by a pre-commencement condition, presumably at some point in this gap either Natural England or the Developer will have to tell the LPA that they have obtained a commitment to pay so that the LPA knows that they need to impose the condition.

After that things run a bit like this:

• LPA imposes pre-commencement condition on the planning permission requiring payment of the NRL
• Once Permission is granted Developer serves Assumption of Liability Notice on Natural England.
• At this point Natural England calculates the amount due based on the final planning permission and sends a Liability Notice to the developer setting out the actual final liability, when it is due and whether the developer can pay in instalments.
• Developer pays the levy (or the first instalment), and NE notifies the LPA that the condition has been discharged.

Natural England has the ability to impose liability if the developer commences development without assuming liability, and there are surcharges and fines if the payment process isn’t followed.

Much like CIL:

• liability can be transferred between developers, and apprortioned between material interests
• The NRL is subject to surcharges for non-compliance and late payment interest
• There is a duty on Natural England to return overpayments
• There is a series of review and appeal procedures, which largely echo the reg.113/ reg.114 appeal process in the CIL Regs
• Natural England can impose Stop Notices to halt development if payments are not made
• The NRL is a local land charge; and
• It can be enforced as a debt or via enforcement of the local land charge

Unlike CIL:

• The NRL is intended to be voluntary, so there are no exemptions or reliefs in the NRL Regs
• There is absolutely no attempt to grapple with the issue of outline or multi-phased developments – liability can be paid in instalments but it will be the liability for the whole development.
• the mechanisms for dealing with changes in a development are decidedly woolly. The developer has to notify Natural England of a “material change ” in the development and Natural England recalculates the liability – that is it. There isn’t even a definition of material change.

3. What the NRL can be spent on

Funds raised through the NRL are ring-fenced (Reg 33 and s.77 of PIA). They can only be spent on:

• the delivery, management, maintenance and monitoring of the conservation measures set out in the EDP;
• administrative expenses connected with the EDP
• remedial measures; and
• additional conservation measures related to the aim of the relevant EDP.

The Regulations also reflect the monitoring obligations for EDPs and the NRL set out in the Planning and Infrastructure Act 2025.

Conclusion

Overall, the NRL Regs are not as complicated as they could have been. It looks as if there have been genuine attempts to make sure they are workable and not overly onerous for users trying to engage with the new system.

There are however, some issues that need to be addressed:

1. We need the complete picture on how everything fits together, in order to figure out how workable this new system will actually be. In particular we need the draft EDPS (including the draft charging schedules) and to “fill the gap” that exists around commitments to pay sooner rather than later;
2. The lack of any ability to phase liabilities to match development phasing is a real problem, and could well make the Levy unworkable for large-scale, multi-phased, outline consents. For example: The fact that you can’t commence development until you have paid the Levy due on the entire scheme forces you to obtain ALL RMAs for a development in one go.
3. As a result of 2 (above) at the moment, the NRL may initially only be attractive to smaller schemes that can obtain all of their RMAs in one go.
4. Whilst the Regs themselves aren’t too horrendous, the system has the potential to get VERY complicated. Natural England has the power to set rates for different EDPs very differently – which means that one development may, eventually, have to grapple with multiple NRL payments for multiple EDPs all of which are calculated on different basis.

Right. Now. That’s enough of that. I need a coffee! Happy reading everyone.

*No, not that. I will leave that to the journalists and political folk.

** it has since been changed