Navigating Mandatory Biodiversity Net Gain
Targets in Business
Despite expecting the mandatory system to be in place in November 2023, this is now due in January 2024, the details of the regulatory regime will be provided this year. Businesses operating in the development and environmental sectors find themselves at a pivotal moment and should start preparing for January once the details have been announced.
The January date will mark the transition to mandatory biodiversity net gain (BNG) targets for most sites, with smaller sites granted additional time to adapt and nationally significant infrastructure projects (NSIPs) aligning with the mandate in 2025. In response to this imminent shift, the Department for Environment, Food & Rural Affairs (DEFRA) has introduced several measures aimed at facilitating a smooth transition and ensuring sustainable development practices.
Here’s everything your business needs to know to remain legally compliant.
What are the changes?
One significant change in this landscape is the introduction of statutory credits, intended as a last resort for developers and landowners to meet BNG targets. While these credits might be crucial for advancing projects on constricted sites, you should approach them with caution. The prices for these credits, although currently indicative, provide some guidance for developers. They range from £42,000 for Tier A1 projects with low, medium, and high habitat distinctiveness to £650,000 for Tier A5 projects centred around lakes. Proceeds from the sale of these credits will contribute to the overall BNG scheme. Any surplus will be channelled towards habitat restoration efforts in England.
What are the challenges for businesses?
Amidst these changes, there are several challenges you may need to address. One of the primary challenges is ensuring that developments align with BNG targets, while maintaining economic viability. You’ll need careful planning, stakeholder engagement, and ecological expertise to navigate the complexities of BNG compliance.
Local Planning Authorities (LPAs) have been allocated an additional £9 million in funding to bolster their teams with ecologists and specialists. This is a welcome boost for under-resourced LPAs. It also underscores the importance of green jobs in fostering nature’s recovery, as well as the need for further investments in environmental conservation.
Creating conservation covenants is another challenge. Only designated responsible bodies, including local authorities, public bodies, conservation-focused charities, and similar entities, can initiate these agreements. Conservation covenants, which will be registered as local land charges, add an extra layer of scrutiny to due diligence processes.
What actions should your business take?
1.
Understand statutory credits: familiarise yourself with the statutory credit system, ensuring you know when and how to use them effectively. Make use of the available resources and pricing guidance provided by DEFRA.
2.
Optimize BNG compliance: invest in ecological expertise to ensure that your projects meet BNG targets without compromising their economic viability. Collaborate closely with LPAs and ecologists to navigate the regulatory landscape successfully.
3.
Explore conservation covenants: if applicable, explore the potential benefits of conservation covenants when they come into force. Identify whether your organisation qualifies as a responsible body and consider implementing these agreements as part of your sustainable development strategy.
4.
Navigate Section 106 Agreements: planning agreements are being used to secure BNG obligations, which brings a level of certainty for LPA’s to be able to enforce the obligations. These are legally binding and will continue to be used for habitat management plans.
5.
Stay informed: keep a close eye on upcoming secondary legislation that will clarify exemptions, irreplaceable habitat definitions, the registration process, and integration with the planning system. Stay up-to-date with template guidelines for Habitat Management Monitoring Plans.
6.
Evidence-Based Approach: if you find yourself needing more than the mandatory 10% net gain, ensure you have a well-documented and evidence-based rationale for this request. Be prepared for scrutiny and make a compelling case for why additional net gain is necessary, always considering the project's overall viability.
Expert opinion
The impending shift towards mandatory biodiversity net gain targets in 2024 and 2025 presents both challenges and opportunities for businesses in the development and environmental sectors. By understanding the changes, addressing the challenges and being proactive, businesses can not only comply with regulations but also contribute to the preservation and restoration of biodiversity, fostering a more sustainable and environmentally conscious future.
Claire Petricca-Riding
Partner