Changes to biodiversity net gain regulations and the impact on planning applications

Last week, partner Angus Walker ran a webinar reflecting on the latest changes to the biodiversity net gain proposals to come out of the government’s response to the consultation on biodiversity net gain regulations and implementation, issued at the end of last month.

Although they have an obvious impact on the planning and infrastructure sector, these changes, which aim to enhance biodiversity by creating more resilient habitats and ecosystems and reducing the impact of development on the environment, are far reaching, affecting the real estate, planning, public law, real estate, commercial, charity and energy sectors.

Angus touched on a number of topics in his webinar, including the implications to planning (these changes are likely to affect over 100,000 planning applications every year) and the challenges and opportunities that have emerged across a range of sectors.

What is Biodiversity Net Gain?

Biodiversity Net Gain (BNG) consists of a new obligation on all planning permissions and development consent orders (DCOs) to improve the environment by at least 10% as a compulsory planning condition; details are set out in the Environment Act 2021, sections 98 and 99.

Broadly speaking, biodiversity net gain is a concept that refers to the enhancement of biodiversity resulting from development activities. The idea is to ensure that development activities not only do not have a negative impact on the environment but that they contribute positively to the conservation and enrichment of biodiversity. The government aims to develop a market for buying and selling biodiversity land which means this concept extends beyond planning.

How it works – the Biodiversity Net Gain Metric

Land being used by a development is scored according to the ‘biodiversity metric’; land elsewhere must then be found, improved and secured for at least 30 years and its increase in score must be at least 10% more than the land being used up. Improvements must have taken place since 30 January 2020.

The Biodiversity site register

Natural England will be responsible for creating and maintaining a register of available – and allocated – BNG sites. All registered land must be accompanied by a legal agreement that gives sufficient confidence that it will satisfy BNG requirements. A fee to register will be announced which should be between £100 and £1,000 – developers can use the register to find sites.

Changes to the Biodiversity Net Gain Regulations

The government’s consultation response published on 21 February 2023 outlines several changes to the biodiversity net gain regulations that affect a wide range of industries.

BNG will become the law from November 2023 for planning permissions and confirmed from November 2025 for (the terrestrial elements of) DCOs. The key changes are as follows:

1. Mandatory Biodiversity Net Gain:
   One of the most significant changes is the introduction of mandatory biodiversity net gain requirements for all development projects. This means that all new developments will be required to deliver a minimum 10% increase in biodiversity compared to the pre-development baseline. This change will impact the real estate, planning, and infrastructure sectors, as they will need to ensure that their projects meet these new requirements.

2. Monitoring and reporting:
   Developers will be required to monitor and report on the biodiversity net gain resulting from their development activities. This includes providing data on the biodiversity baseline, the expected biodiversity net gain, and the actual biodiversity net gain achieved. This change will impact the planning and infrastructure sectors, as they will need to ensure that they have the necessary monitoring and reporting systems in place. Any application for planning permission made after November 2023 (subject to transitional provisions in BNG regulations) will be caught by the 10% BNG requirement (local authorities may have higher figures).

3. Offsite gains:
   Land does not need to be on or adjacent to the development site in question. The government will allow developers to offset their biodiversity losses by delivering biodiversity gains elsewhere. This change will impact the planning, infrastructure, and energy sectors, as they will need to ensure that they have access to suitable sites. As a last resort, developers will be able to buy ‘biodiversity credits’ from the government, but these will be deliberately expensive so as not to interfere with the market in biodiversity land.

Impact on industries

The introduction of biodiversity net gain will have a significant impact on a wide range of industries. The real estate sector, for example, will need to ensure that new developments meet the mandatory biodiversity net gain requirements which could require several four times the amount of land as the actual development – a significant factor for real estate developers who will need to factor in the cost of delivering biodiversity net gain when assessing the viability of new projects.

The public law sector will also be impacted, as the changes to the regulation will require local authorities to ensure that planning decisions deliver a net gain in biodiversity. This will require changes to planning policies and processes, as well as training for planning officers and other relevant staff.

The consultation also yields opportunities such as potential business opportunities for large landowners (and entrepreneurs who can create, buy and sell biodiversity units) to pre-emptively boost their land’s biodiversity ready to sell to developers; something of interest to the agricultural sector.

The infrastructure and energy sectors will also be impacted, as they will need to ensure that they have access to suitable offsetting sites and that their projects enhance habitat connectivity. This will require collaboration with other stakeholders, such as environmental groups, to identify suitable offsetting sites and develop effective habitat connectivity measures.

While there is no doubt that the impending changes to the biodiversity net gain regulations will require significant changes to the way in which the real estate, public law, planning, infrastructure, and energy sectors operate, these changes also present an opportunity for these industries to demonstrate their commitment to environmental sustainability – an important demonstration in a market place increasingly driven by ESG values.

Look out for our comments on the major BNG developments coming up, including the announcement of the biodiversity credit price by the end of May. We have a Biodiversity Net Gain webpage, which will be updated as this area develops. For more updates from Angus, subscribe to our Planning Act 2008 blog.