Biodiversity Net Gain - what to expect?

The requirement for most developments to provide a minimum of 10% Biodiversity Net Gain (BNG) is due to come into force in January 2024.   It is estimated that more than 100,000 planning applications per year will fall under the obligation to provide BNG.   

What is required?

From January 2024, most developments will be required to deliver a minimum of 10% BNG for a period of at least 30 years. 

How will BNG work in practice?

Developers will be required to do the following:

1. Submit a BNG statement with any planning application; and
2. Discharge a pre-commencement condition by submitting and having approved by the Council a BNG plan; and
3. Secure the obligations to provide a minimum of 10% BNG for a period of at least 30 years by way of either a section 106 agreement or a conservation covenant. 

Exemptions

The government has confirmed that they intend to use regulations to make exemptions for:

• Development impacting habitat of an area below a 'de minimis' threshold of 25m2, or 5m for linear habitats such as hedgerows;
• Householder applications; and
• Biodiversity gain sites (where habitats are being enhanced for wildlife).

Small scale self-build and custom housebuilding are also proposed to be exempt, although the government has confirmed that the definition of this exemption is to be kept under review, to prevent the risk of exempting large sites made up of many custom plots. However, it is important to note that whilst the above are likely to be exempt from the requirement to provide statutory BNG under the regulations, the Department for Levelling Up, Housing and Communities (DLUHC) is planning to develop planning policy for minor development, so proportionate on-site biodiversity enhancements are possible.

The government has also confirmed that the following will not be exempt:

• Previously developed land;
• Change of use applications;
• Temporary applications;
• Developments which would be permitted development but are not because of their location in Conservation Areas, AONBs, or national parks; and
• Development on statutory sites designated for nature conservation.

What happens after the 30 year period ends?

Habitat enhancement works must be maintained for a period of at least 30 years after the completion of the works to create or enhance the habitat (though it is not specified in the current legislation or guidance at what point in the development process the habitat enhancements need to be completed by). The government has implied in their consultation response that they want to disincentivize landowners from taking sites out of conservation management at the end of the required period. They have suggested that it may be possible for a new biodiversity baseline to be taken at the end of an agreement, and the land re-entered into the BNG market to create further habitat enhancements. They are also considering factors to incentivise retention of biodiversity sites such as tax incentives and securing longer term management through investments bonds or other financial instruments.

Off-site units:

The government has confirmed that they will continue to incentivise a preference for on-site gains over off-site gains,but have not confirmed how this will take place in practice. Natural England will be the "Register Operator" for the off-site register. They will be responsible for establishing and maintaining the registry for off-site biodiversity gain sites. We are still awaiting the specific eligibility criteria for registering sites, which is likely to be confirmed in secondary legislation. 

Selling Biodiversity Units:

The government has also confirmed that any landowner or land manager will be able to create or enhance habitat to sell biodiversity units, and will be able to sell these to developers anywhere in England, provided that the use of those units is appropriate for the development in question. The distance between the development and the off-site habitat will also be accounted for in the biodiversity metric. This opens up lucrative alternative land use opportunities for landowners, who could sell biodiversity units to developers across the country.

Future

Many local authorities have already incorporated BNG into their local plans and policies, some requiring more than the statutory minimum of 10%. In fact, over 40% of all English local planning authorities have specific BNG policies in their adopted or emerging local plans, up from 28% the year before. It will therefore be important for developers to keep track of how these policies marry up with (or diverge from) the pending regulations. 

Whilst there are still lots of elements of BNG which remain in the dark the draft regulations and guidance when they are finally published at the end of November will hopefully shed the light required for the Real Estate industry.