What are the requirements for developers for biodiversity net gain?

Protecting and enhancing biodiversity and natural habitats has become an increasingly important obligation in development projects. Through the Environment Act 2021, the UK government has mandated that most new developments must achieve a 10% biodiversity net gain (BNG) to receive planning approval.

BNG became mandatory for major developments on 12 February 2024 and for minor sites on 2 April 2024. The requirement to comply will take effect as a pre-commencement planning condition once planning has been granted.

What is Biodiversity Net Gain?

BNG requires developers to ensure that habitats for wildlife are improved through development projects. A 10% net gain means that the post-development biodiversity value of the site must exceed the pre-development biodiversity value by 10%.

The biodiversity value is calculated using statutory metric tools that consider factors such as the type of habitat, condition, distinctiveness and its significance.

For many developments, developers will need to consult with an ecologist to advise on the biodiversity value of a site, the potential impact of the development and steps that can be taken to enhance a habitat.

How is this achieved

There are three ways that a developer can achieve the objective:

1. Biodiversity on-site – I.e. the enhancement takes place within the red line boundary of the development
2. Off-site – If a development cannot achieve all of the required BNG on-site, the condition can be satisfied through a mixture of on-site and off-site gains.

The off-site gains can be met either by implementing BNG on other land that the developer owns outside of the red line boundary of the development or by purchasing off-site biodiversity units from land owners that have made their land available for this purpose

3. Statutory credits – If on-site or off-site BNG cannot be fully achieved, statutory biodiversity credits can be purchased from government.

A multiplier will apply to the credits meaning that a developer must buy two statutory credits for every one biodiversity unit that would otherwise be required. The nature of the charge is therefore deliberately punitive to ensure that this is used as a last resort.

The steps taken by a developer can be a combination of the three options above, but they must be followed in order. This order is known as the Biodiversity Gain Hierarchy. More specifically, its sets out that developers must take the following steps in order of priority:

• Avoid adverse effects from the development to on-site habitats with high distinctiveness scores (these scores are assessed when applying the statutory metric tools)
• Mitigate on-site adverse effects where they cannot be avoided
• Enhance existing on-site habitats where mitigation is not possible
• Create new on-site habitats
• Acquire biodiversity units from off-site land
• Purchase statutory biodiversity credits.

Discharging the condition

A biodiversity gain plan will need to be submitted to and approved by the LPA to discharge the BNG condition and this must be done before development can commence.

The plan will need to demonstrate the steps that will be taken to attempt to achieve 10% BNG including details of the on-site and off-site gains and any statutory credits to be purchased. Information such as the pre and post development biodiversity values and the metric calculations are to be included.

The plan must be submitted in writing, no earlier than the day after planning permission has been granted. The LPA must approve or reject the plan within eight weeks.

Significant on-site and off-site gains must be managed for at least 30 years. For significant on-site gains, the obligations can be secured by the LPA either pursuant to a planning condition or legal agreement. For off-site gains, the obligations will only be secured by legal agreement.

The legal agreement will be either a planning obligation (section 106 agreement) or a conservation covenant entered into with a conservation body.

Key takeaways for developers

• Engage environmental experts at an early stage to assist with the complex biodiversity metrics. The assessment may influence design changes and site selection and should therefore factor into site due diligence
• Discuss BNG with the LPA prior to submission of the planning application to ascertain whether the condition may apply. This will also help to create a constructive dialogue and receive input from the LPA on proposals for meeting the objective
• Budget for the costs of BNG which can include professional fees, creating and managing on-site habitats, payments to third party land owners for off-site biodiversity units and the cost of statutory biodiversity credits
• Know what counts. There are certain habitat schemes that developers may already be obligated to comply with that can count towards the BNG objective. Conversely, some schemes cannot be counted at all. Further, the biodiversity metric will calculate fewer units for gains generated in a neighbouring LPA compared with those that can be produced on a site close to the development. Developers must therefore have an awareness of what can and cannot be counted towards discharging their BNG objectives.

There are also exceptions to the above rules that developers will need to bear in mind. These include transitional provisions, irreplaceable habitats that are governed by special conditions, phased developments and exemptions from BNG.

For more detailed information and advice please contact our expert Real Estate team or email info@ts-p.co.uk.