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If you are considering a BNG or nutrient scheme, get in touch to understand how to ensure maximum benefit from your scheme.
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Alongside the legal obligations, you will need to consider the commercial practicalities of a new, opaque and fast moving market. We are here to help landowners navigate the complexities of developing a BNG scheme.
Alongside the legal obligations, you will need to consider the commercial practicalities of a new, opaque and fast moving market. We are here to help landowners navigate the complexities of developing a BNG scheme.
For a landowner, there are three routes to market.
Each route to market has costs and benefits, the real impact of these will only be determined as the market develops.
Creating a Habitat Bank is likely to be the most common method of bringing a scheme to market. This requires a landowner to secure the land for BNG using a Section 106 Agreement or Conservation Covenant before the sale of units.
Pros
Cons
Developers may require some quite specific habitat types. Landowners have the option to build these as they are required. This can be done either by changing the habitats once the land is already in an existing BNG scheme, by creating a new scheme or by extending an existing agreement. Typically if an existing scheme is already in place, the process of variation will be quicker and easier, and therefore more attractive to a time-constrained developer. As a landowner, you will likely still hold the risk to ensure the habitats are created, unless this is agreed separately.
Pros
Cons
Developers can agree off-market agreements with landowners. Typically these will be done at a significant discount to on-market agreements. Depending on the developer, they may also be willing to assume more of the delivery risk.
Pros
Cons
There is no legal minimum size for a BNG scheme, however, there are practical and governance reasons why larger schemes are more favourable. Firstly, there is general agreement that natural habitats have a greater impact and are more robust when they are larger. Known as the Lawton Principles from a 2010 review by Sir John Lawton, this has shaped thinking on how BNG should be delivered at both national and local levels. This could mean linking to other areas of natural habitat or being of significant size on its own.
When councils are looking at schemes, they are likely to discourage smaller sites, either by prioritising larger sites for review or through the commercial requirements of providing the Section 106 Agreement. There is a friction here, that we expect to play out differently in different LPAs, where developing a BNG scheme should be available to small landowners but is discouraged by the LPA.
There is also the cost implications of developing a scheme on a smaller scale. The price per unit will be higher and this may impact on viability if market prices drop. We are reviewing sites as small as 10 hectares as we feel the unit economics work at this level. On smaller plots, it may be better to do an off-market sale directly to a developer, with them owning some or all of the delivery risk.
You cannot sell biodiversity units or combine them with other environmental payments when you’re already required to create or enhance habitat for:
Ensure that the enhancements for these schemes do not overlap with those for BNG or nutrient mitigation unless clearly distinguished.
You may be able to enhance a protected site and sell the units for BNG. You must get consent from Natural England before you start work and renew consent as required.
You must ensure that any protected species licences required are in place before works commence.
Work with the experts to discover how to unlock the value in your land while protecting the environment.
Biodiversity Net Gain (BNG) adheres to the proximity principle, emphasising local enhancement. If on-site BNG is not achievable after consulting the mitigation hierarchy, priority should be given to nearby off-site opportunities. Statutory credits are only to be purchased as a last resort. The BNG metric imposes penalties on proposals where off-site habitats are distant from the impact site, ensuring the preservation of local biodiversity and the recognition of ecosystem services' importance to the local community.
A spatial risk multiplier is applied to off-site habitats located outside the Local Planning Authority area or the same National Character Area (or Marine Plan Area for inter-tidal habitats). For rivers and streams, boundaries set by the Water Framework Directive (WFD) water bodies and catchments are used. This multiplier is applied once, based on the larger of the two designations in which the off-site enhancement is located, typically the National Character Area. If the off-site enhancement lies within a neighbouring local planning authority but within the same National Character Area, the relevant National Character Area multiplier is used.
The Biodiversity Metric incentivises habitat delivery on or near the development site through a 'Spatial Risk Multiplier,' which reduces the biodiversity value of habitats delivered further from the development area.
Depending on the location, developers may need to provide 1x, 1.5x, or 2x the biodiversity units to compensate. The requirement is 1x if located within the development’s local planning authority or national character area, 1.5x in an adjoining local planning authority or national character area, and 2x if situated elsewhere in England. This mechanism promotes local nature recovery and, if local delivery is not feasible, ensures significantly higher biodiversity compensation further from the development site.
