Biodiversity Net Gain Law
Biodiversity net gain, or BNG, is a new obligation that will apply to almost all planning permissions and DCOs. Developers will be required to improve biodiversity by at least 10% compared with the situation before the development.
Biodiversity Net Gain Lawyers
BNG is set to become a requirement for planning applications from November 2023 and for DCOs from November 2025. It is essential to start planning now for how the new requirements will affect your future developments.
BDB Pitmans is at the forefront of advising a wide range of clients on biodiversity net gain. We are assisting developers with planning for future compliance, as well as helping businesses and consultants to find and exploit fresh opportunities, including around the new market in biodiversity units and biodiversity gain sites. We also advise landowners on the future opportunities and many issues to consider.
Our team are working with surveyors, consultants, companies and charities. We ensure they are up to speed on what BNG means for them and how they can comply with their BNG obligations.
Our planning and development lawyers can assist with:
- Direct advice on how the BNG regime will affect your plans
- Educating consultants on matters such as BNG scoring and finding alternative land
- Advising businesses on opportunities presented by the new market in biodiversity units
- Acquiring land, improving it and adding it to the national biodiversity gain site register
Advising charities on how they can get involved in the BNG regime for charitable purposes
WHY CHOOSE BDB PITMANS FOR BIODIVERSITY NET GAIN ADVICE?
- 1 We are recognised as leading experts in planning and environmental law
BDB Pitmans has consistently achieved independent recognition for our expertise in planning, agricultural and rural affairs, and environmental law, including:
- The firm is highly ranked by Chambers & Partnersfor Planning and Agriculture & Rural Affairs
- Various members of our team are also individually ranked by Chambers for their expertise in Planning and Agriculture & Rural Affairs
- We are also highly ranked by the Legal 500for Real Estate – Planning, Real Estate – Environment & Planning and Real Estate – Environment
- Partner and Planning specialist Angus Walkeris recognised by the Legal 500 as a Leading Individual in the field of planning. Angus is individually ranked by Chambers & Partners in this area as well
- Angus Walker is also a Member of the Planning, and Environmental Law Committee of the Law Society. He is one of the UK’s leading experts on Development Consent Orders
- 2 We are a full service firm that can offer a holistic view of these complex matters
Our expertise covers areas including planning, environmental law, agriculture and rural affairs, commercial law, and dispute resolution. We can support you with all of your legal requirements in relation to biodiversity net gain, plus your wider personal and business interests.
- 3 We offer commercial advice deeply rooted in the realities of the rural sector
Every decision you make needs to make sound commercial sense. Our biodiversity net gain lawyers understand this, so our advice will also have a strong commercial slant drawing on our decades of experience advising landowners and rural businesses.
We can help you make the most of the new regime’s opportunities while protecting your personal connection to, and financial investment in, your land.
We answer your questions about the biodiversity net gain regime
What is biodiversity net gain?
Biodiversity net gain is a new concept introduced by the UK government that applies to all planning permissions and Development Consent Orders (DCOs). Developers will have to improve the environment by at least 10% as a condition of getting permission.
The details of the new biodiversity net gain regime are set out in the Environment Act 2021, sections 98 and 99.
How will biodiversity net gain work?
A planning condition will be added to all permissions and a requirement will be added to all Development Consent Orders. This will oblige a biodiversity gain plan to be provided and implemented that secures the BNG.
Land affected by development will be scored for its biodiversity value according to a metric produced by Natural England. The latest version of the metric is 3.1 and it was published on 21 April 2022. This metric also allows the ‘after’ score to be calculated with reference to how difficult any improvements are to implement, how long they will take and how far away the land is.
Although habitats don’t need to be replaced like for like, they must be replaced by those with an equal or higher ‘distinctiveness’. Some habitats, such as ancient woodland, are considered separately because of their exceptional value.
If there is no suitable land for improved biodiversity at the site, then it will be possible to improve land that is land further away or buy ‘biodiversity units’. The government is hoping a market will be created for buying and selling biodiversity units, which will have to be recorded on a national register. Until the market is established, it will be possible to pay the government for ‘biodiversity credits’ to discharge the BNG obligation.
When will biodiversity net gain be mandatory?
The government intends biodiversity net gain to be included in all planning applications made after November 2023 and all DCOs accepted by November 2025.
Who will be affected by biodiversity net gain requirements?
Anyone considering making a planning application after November 2023 or a DCO application after November 2025 will be directly affected. All but the smallest developments will need to comply with the biodiversity net gain regime.
But this new regime will bring opportunities as well as obligations. Any surplus biodiversity units can be put on the register and used for other developments. Government research shows that each unit could be worth an average of £20,000, so this could prove quite lucrative.
For instance, environmental organisations and charities may well want to provide biodiversity land that furthers their own aims. This land could be very valuable to developers looking to discharge their BNG obligations. Entrepreneurs could also start trading in biodiversity units.
Environmental consultants will need to be ready to advise on and endorse biodiversity metric scores and assist with finding sites that will meet the BNG objective. There is something for everyone!
Questions asked by our Clients
- 1 Does the developer have to ‘control’ the BNG land, for example by owning the freehold, or could a 30 year lease be sufficient? Presumably it has to demonstrate that the BNG land will remain ‘secure for the time required?
A requirement to own the freehold, or even a leasehold interest is not necessary. The key is that the developer has sufficient control over the land/landowner for the requisite period of time so that it can meet the BNG requirements, and thus lawfully implement its scheme. The Consultation Paper says (page 58) that:
‘biodiversity gain site enhancements will be secured through conservation covenants or planning obligations which can ensure that habitats are maintained even if the land is sold’
Conservation covenants are a creation of the Environment Act 2021 and have to be entered into by the landowner and a limited number of counterparties. Planning obligations are s106 agreements, which are well known already.
BNG will be secured through section 106 agreements and conservation covenants. However, s106 agreements and conservation covenants may not be enough for developers’ needs as they will not be party to them; such documents may only be enforceable against landowners by the Council or other relevant body. Developers will, therefore, prefer to have some legal interest in the BNG land to ensure that the BNG requirements can be complied with, and thus lawfully implement their permissions. Whilst a requirement to own the freehold, or even a leasehold interest is not necessary, what is key is that the developer some element of control over the land/landowner. An example we can add is on a site we bought recently in order to mitigate the impact of the development, an adjoining landowner was paid to enter into a deed of covenant with our developer client to plant trees when called upon. So the only interest in the land we had there was the benefit of a covenant, but that was enough control to satisfy the client, and indeed the local planning authority.
- 2 How do temporary planning permissions factor into the metric?
It is proposed that temporary planning permission will not be excluded from being required to deliver biodiversity net gain. However it is also proposed that the biodiversity metric allows for temporary losses to be disregarded when the original baseline habitat is restored to the same or better condition within 2 years of the loss. Therefore, your BNG requirements would depend on the nature of the baseline habitat and how temporary your proposed development was.
- 3 How will development benefitting from permitted developments be affected, eg Ports and Airports?
It is proposed that permitted development be exempt from BNG requirements. A specific exemption for permitted development is provided for in the Environment Act 2021 (via para 17(a)(i) of Schedule 14).
- 4 How will BNG be enforced post-development should the proposals not fulfil the required number of credits in the future?
The Consultation Paper states (p58) that:
‘biodiversity gain site enhancements will be secured through conservation covenants or planning obligations which can ensure that habitats are maintained even if the land is sold’.
We expect developers will require the landowner delivering the BNG to enter into a planning obligation or conservation covenant so as to demonstrate to the planning authority that it can deliver the BNG requirement.
We also expect planning authorities will be required to set specific and proportionate monitoring requirements, to be secured by the planning obligation or conservation covenant. The landowner or developer must ensure monitoring and reporting obligations are fulfilled, or adequately delegated to another body with necessary funding. We expect monitoring to be depend on the nature of the site, but a medium sized habitat creation project might require reports in years 2, 5, 10, 20 and 30.
Ultimately the planning authority or beneficiary of the conservation covenant will actually enforce the obligation.
- 5 If your development crosses several Local Authority boundaries do you get the ‘discount’ if just one is used for BNG or does it have to be them all, or in combination?
The BNG metric requires a factor of 1 to be applied where the BNG mitigation is provided within the LPA of the development and a factor of 0.75 where the BNG mitigation is provided in a neighbouring LPA for the development. At present, the BNG requirement for the development in each LPA area would be calculated separately. Further clarity is awaited in relation to the provision of BNG for nationally significant infrastructure projects which by their nature will often cross local authority boundaries. A subsequent consultation on the detail of the BNG requirement for NSIPs is expected.
- 6 Who is responsible for scoring areas? Will there be a regulator or some sort of independent assessor? If not scoring can be rather variable
The assessment of habitats will be the responsibility of the applicant with their consultant’s report to be approved by the LPA. Guidance on the assessment of different habitats which can be found here, on the ‘habitat condition assessment sheets with instructions’. Developers should be able to rely on suitably qualified experts’ opinions.
- 7 Can a promoter CPO the land required for BNG?
The consultation document recognises that compulsory acquisition of land to provide BNG may be necessary for some nationally significant infrastructure projects but is currently proposing not to make it a specific purpose for which land can be compulsorily acquired. The general expectation is that promoters will deliver BNG within the development boundary or through the purchase of off-site biodiversity units, rather than resorting to compulsory acquisition powers. Compulsory powers may be necessary where it is necessary to deliver a gain in close proximity to the development site but the promoter cannot secure the land by other means. There not planned to be a standalone compulsory purchase power for BNG (although respondents may call for one and so it may be brought in), so for now promoters will need to consider whether land can be acquired compulsorily under other existing enabling powers.
- 8 What are the potential capital tax implications from allowing BNG on your land? Ie availability of APR or BPR
To oversimplify, Agricultural Property Relief (‘APR’) is available if and only if land or buildings are used for agricultural purposes as defined in the Inheritance Act 1984, broadly in connection with the production of food. If land can be used for such agricultural purposes as well as for delivery of BNG, then we think BNG will not necessarily mean agricultural property relief is not available.
However, the land will need to be improved to deliver the ‘net gain’. We suspect there may be relatively few opportunities to deliver habitats that increase biodiversity but which are still genuinely agricultural.
Business Property Relief (‘BPR’) may be available as an alternative, but only to the extent the land is not held as an investment, or where it qualifies under the Farmer case as part of the wider activity of an estate. Unless Farmer applies, we suspect it will be difficult to claim BPR unless the provision and maintenance of a BNG site can properly be called a business activity carried on for profit.
Government recognises that farmers need to understand these issues before committing land to habitat creation or enhancement and states ‘work is underway to provide clear guidance on this.’
This may be revised following the responses made to the consultation so should be monitored.
- 9 How will promotion agreements and options cover BNG? Is there an expectation that a developer/promoter will seek additional land to be within the agreement with a rural landowner to allow BNG?
It is site-specific, and in particular depends on whether the parties feel that BNG should be secured (i) onsite, (ii) offsite, or (iii) through government credits. Your question relates to (ii) and in these circumstances, yes it would be expected that the developer takes the initiative to try to find mitigation land within the vicinity in the same way as offsite SANG – Suitable Alternative Natural Greenspace, and this may captured in a ‘reasonable endeavours’ obligation in the contract. The developer would wish to recover its expenditure for securing offsite BNG land though, for example as a deductible cost in a promotion agreement coming off the sum the landowner is to receive. If there is a management company monitoring costs could be secured by way of a rent charge payable by the house holders.
In terms of management and monitoring post-completion we reckon this could take different forms. The developer might be required to pay a competent body a hefty endowment as is the case for some SANG. There will
likely need to mechanism dealing with the management and monitoring costs post-acquisition, whether this be a service charge or endowment.
- 10 Can farmers be paid to improve biodiversity of farmland for 30 years?
Government proposals envisage that biodiversity improvements are delivered soon after the implementation of the development (12 months is mentioned in the consultation paper) and capital costs paid at that time. We doubt that complex ecological systems can be fully delivered so quickly, thought they can of course be initiated. Under the proposals sites will be monitored, and (presumably) enforcement action taken if the monitoring reveals that the specified biodiversity has not been delivered, or if the site has declined. There must be provision for the cost of monitoring, but the scheme does not appear to envisage regular payments for improvement of biodiversity over the longer term, which looks like a missed opportunity.
What should I do about biodiversity net gain?
Minimise the risks and seize the opportunities!
Please get in touch at firstname.lastname@example.org if you have any specific questions. We can advise on exploring biodiversity net gain opportunities and keep you up to date with the fast-moving developments in this area.
What else is included in the Environment Act 2021?
BNG is one of the measures introduced by the Environment Act 2021.
Other changes introduced by the Environmental Act 2021 include:
- Establishing the Office for Environmental Protection (OEP) as the environmental watchdog to replace the European Commission
- Requiring the setting of environmental targets
- Introducing conservation covenants that can be used to deliver BNG
- Allowing charges for single-use plastics
The Environmental Act 2021 can be found here.
Insights and webinars from our biodiversity net gain lawyers
- The Great British biodiversity net gain consultation – the Planning Act 2008 and DCOs
- Biodiversity net gain requirements for residential development
- Webinar round-up: Everything you wanted to know about Biodiversity Net Gain but were afraid to ask
- B(uildi)ng back greener: Biodiversity Net Gain and Nsips