An Introduction to Biodiversity Net Gain

Key information
  • Biodiversity net gain (BNG) is an approach to development that leaves the natural environment in a quantifiably better state after it has been built on.
  • The Biodiversity Metric 4.0 calculation tool developed by Natural England and published in March 2023 is the latest way for all those assessing a site (such as ecologists, developers or planners) to measure a piece of land's biodiversity value, and from there make changes to its value. It measures criteria from species diversity to habitat size and quality.
  • Enacted as part of the Environment Act 2021, the BNG scheme is currently in its 2-year transition phase before it becomes a legal requirement with mandatory biodiversity considerations likely to be implemented on all planning proposals across England by November 2023.

Biodiversity net gain is a government response to the increasing biodiversity loss occurring throughout the country, particularly as a result of infrastructure projects. Given that it's a significant buttress against climate change, loss of biodiversity is something to be avoided at all costs; indeed, it's vital that an increase in biodiversity and the recovery of nature is sought, in order to reverse the already precarious state of the natural environment, with hopes the current loss of biodiversity through development will be stopped. As a solution to the biodiversity puzzle, the government, in the recent Environment Act that gives and overview of biodiversity goals for the country, mandating that "natural habitats for wildlife must be left in a measurably better state than they were in pre-development". This principle will be implemented so that all major applications are required to increase biodiversity by 10%, relative to pre - development levels.. Through this, commercial and residential development targets can still be met, whilst still having a positive impact on biodiversity with a gain approach.

In practice, this is a complex piece of legislation, with a potentially complex implementation. Our Addland Guide will take you through everything you need to know, from top-level principles to more practical information on timing and payments.                                         

What is biodiversity net gain?

One of the main principles of biodiversity net gain is, of course, to provide pragmatic solutions to the biodiversity puzzle, across the UK, protect irreplaceable habitats, and allow developers to stick to their biodiversity duty by holding it as one of their key considerations. To do this, biodiversity has to be made quantifiable: the Natural England's Biodiversity Metric 4.0 is the current biodiversity metric for ecologists and development schemes to assess a site's current levels in an ecological impact assessment and acts as a calculation tool to assess the potential negative impact of a development and design potential offsetting or mitigation measures. Biodiversity Metric 4.0 is calculated as: 

habitat extent (ha/km) x habitat quality (e.g. low - such as a sports pitch or high- such as a heathland) x habitat condition = biodiversity units

In practice, a BNG assessment would involve a wide range of steps for determining acceptable biodiversity:

1) A field survey or ecological feature impact assessment is done to collect pre - development habitat data

2) Post - development habitat is projected using the landscaping plans

3) Both pre and post - habitat data are converted into biodiversity net gain units using the Biodiversity Metric 4.0. At this point, additional biodiversity can be added to the post - development side of the equation using offsite compensation.

4) Biodiversity net gain or loss is calculated using the Biodiversity Metric 4.0 calculation tool by

Pre - development habitat data (in BNG units) - post - development habitat data (in BNG units) = BNG gain/loss. 

A site with a 105% gain on the baseline biodiversity of the original property is deemed to have achieved biodiversity, and a site with a 110% improvement is deemed to have significant gains in biodiversity. In this way, land can be developed in a way that leaves measurable improvements on the natural environment by delivering improvements through habitat creation, and protecting ecological networks. As a new part of the planning process, BNG will, of course, play a large part in assessing the viability of sites.

The principles of BNG

Though the aims of a biodiversity net gain approach are easy to understand, a responsible body such as the CIEEM (the Chartered Institute of Ecology and Environmental Management), the ecology professional body, recommending a number of good practice principles for development, to ensure proper implementation, and give the highest chance of achieving the public bodies biodiversity requirements and the government's biodiversity goals with a positive environmental impact. These are:

1) Try to minimise any negative impact on biodiversity in the first place by using the mitigation hierarchy

a) The mitigation hierarchy aims works to decide the most suitable course of action for each potential development project.

2) Remove from proposals any negative effects on biodiversity that cannot be offset

3) Be inclusive in the planning process: engage stakeholders early and involve them as far as possible in implementing net gain. 

4) Address risk: understand and then use mitigation measures to limit potential risks to achieving net gain, and potentially compensate for the period of time between losses occurring and biodiversity new gain being fully realised.

5) Make measurable improvements to net gain

6) Achieve the best possible outcomes for biodiversity gain by identifying the key factors using robust evidence and local knowledge to deliver ecological equivalent compensation

7) Where possible, aim to exceed mandatory gains for biodiversity - i.e. do not deliver something that would have occurred anyway

8) Think in the long term. Create a biodiversity gain plan that is resilient to future factors, such as climate change, and plan for adaptive management techniques.

9) Think big picture. If possible, develop in a way that helps create a sustainable society and green economy as a whole.

10) Be transparent. Communicate all aspects of a development proposal and its potential biodiversity improvements to stakeholders.

Achieving net gain 'off-site'

Now that BNG is part of the corpus of UK law, implemented under the Environment Act 2021, Local Planning Authorities (LPAs) will be legally bound to approve or reject planning applications based on the scheme's deems an acceptable biodiversity level. In an ideal world, developers should maintain the current biodiversity levels of the site by creating net gain sites at the location of their development (e.g. by creating green rooftop spaces or gardens, or by planting trees around their development sites). However, there are some instances where this just isn't feasible. In order to balance the need for development and to also achieve their gain target if the mitigation hierarchy deems it appropriate, the government or responsible body may allow for 'off-site net gain'.

Where the 10% net gain can't be made at the actual development site, the Local Planning Authority may still grant planning consent if you can achieve 'off-site habitat enhancement', i.e. create a new habitat creation projects or enhance an old one, at a second location in a place of strategic significance. The provision of this new location is not the Local Planning Authorities' responsibility, however, and the developer will have to source and/or pay for it themselves if they want to achieve the 10% net gain and meet the planning condition to get the project approved. Using the search, you can find plenty of sites to increase the biodiversity output of, or even specific land with BNG units for sale. Developers can also contribute to wider local or regional offsetting projects, in tandem with Local Nature Recovery strategies. 

Biodiversity net gain credits

The concept of biodiversity net gain allows for a third way of achieving net gain on a site, apart from on and offsite bio-diversity increases, is the purchase of bio-diversity credits. These are generated by making improvements for biodiversity on third-party landowners who have unused or low-yield land can earn money from uplifting the flora and fauna of that land, and can gain ecological appraisal to sell the credits to offset developments elsewhere in the country that don't meet their +10% biodiversity duty. For land owners looking to use their land to generate an increase in types of habitats for biodiversity, firms such as Integrated Land Management specialise in land management designed to turn natural capital into sustainable income using the expert advice of land managers.

Biodiversity gain sites have to be maintained for a minimum of 30 years after the completion of the development project - conservation covenants are formed to ensure irreplaceable habitats and priority habitats are maintained even if that land is sold on. Once purchased, this biodiversity credit is entered into the net gain calculation as additional biodiversity units, helping achieve the 10% increase and, consequently, to win planning permission.

Market analysis by law firms such as DLA Piper estimates that the demand for offsite biodiversity units could reach around 6,200, with a market value of ~ £274 million, creating a sustainable free-market solution to biodiversity loss as well as providing huge opportunities for landowners and managers. In the medium to long term, each unit could be priced at about £20,000, reaching up to £25,000 in Local Planning Authority areas where units are scarce (i.e. where there is very little land in that area where an acceptable off-site biodiversity enhancement can be made). Indeed, land owners with BNG credit will be able to sell to anyone in the country, facilitating quick planning decisions around the country rather than having bottlenecks in certain areas of the planning process. On top of this, Local Planning Authorities will be able to sell their own credits, generated from council land.

Though the government does not, in the long term, anticipate taking a formal role in the market for credits, with price dictated by free-market supply and demand, Section 101 of the Environment Act still provides for 'statutory biodiversity credits', where the government can sell credits to developers in cases where they can neither purchase credits nor deliver on or offsite gains for biodiversity. These statutory credits will be priced so as to be a last resort, allowing the market for credits to mature and incentivising developers to meet gain requirements on or acceptable off-site biodiversity enhancement to maintain irreplaceable habitats.

Timeline of BNG rollout 

Autumn 2021: Environment Act 2021 is enacted on 9th November and BNG commitments, amongst other things, and becomes a legally binding environment bill.

Winter 2021: the Government decision-makers with land stakeholders to shape the BNG scheme's statutory instruments and regulations (i.e. details of how it will be implemented). 

Spring 2022: Government response to said consultation

Spring 2023: BNG site register and statutory credits sales platform to go live. 

Winter 2023/24: BNG is expected to become mandatory for all developments covered by the Town & Country Planning Act 1990 (i.e. for all work that currently requires planning permission).

No matter how you're involved in the land industry, it's likely the BNG will affect what you do. Whether you're looking to find, research, buy or sell land for BNG, Addland is the single destination for you. Our team are committed to providing the industry with up-to-date information so watch our guides section as the scheme rolls out to stay abreast of BNG news. Start your land journey today, with

Published: 16 March 2022
Last updated: 20 April 2023

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