On 9 November 2021, the Environment Act 2021 received Royal Assent. A key provision of the Act was the introduction of mandatory Biodiversity Net Gain (BNG), a requirement that aims to leave biodiversity in a measurably better state than before development took place - see our previous Law-Now here and our Planning Ahead with CMS series on BNG here for an overview of the requirements of BNG and how it will work in practice.
There has been a flurry of updates in relation to the implementation of mandatory BNG, including a new timetable announced by the government last month. Below we have summarised what has happened in recent weeks, and what is still to come.
New Timetable – Implementation delayed until January 2024
It was initially intended for the mandatory BNG requirement for major town and country planning applications to come into force two years after the Environment Act 2021 received Royal Assent, i.e. November 2023. However, on 27 September 2023 Defra and DLUHC issued a joint statement announcing that BNG would become mandatory in January 2024, a two month delay.
The updated timetable retains the April 2024 date for small sites, with the implementation of mandatory BNG for Nationally Significant Infrastructure Projects remaining planned for 2025. The government also commits to publishing all guidance and regulations on BNG by November 2023.
The statement also notes that mandatory BNG will only apply to new applications for planning permission for major development made after January 2024. Transitional arrangements are being worked on to ensure that BNG is not applied retrospectively to planning applications that have been submitted or have already been granted permission before the implementation date. It has also been confirmed that where a “section 73” variation permission is applied for after January 2024, but the original permission was applied for before this date, then mandatory BNG will not apply to that application.
Defra have published a blog post confirming that the initial list of irreplaceable habitats for BNG purposes will broadly mirror the list of examples already in the National Planning Policy Framework (NPPF) where they benefit from significant protection. For BNG purposes, the 10% net gain requirement is not applied to irreplaceable habitats, given their high biodiversity value and difficulty in being recreated.
Any impacts to these habitats must be recorded in the biodiversity metric and will be flagged as unacceptable, requiring bespoke compensation to be agreed with the local planning authority (LPA) as part of the planning application process. Off-site biodiversity units and statutory biodiversity credits cannot be used for this compensation. If there are no impacts, then any enhancement of these habitats can contribute towards a development’s BNG requirement.
The initial list which will support the launch of mandatory BNG is as follows:
- Ancient woodland
- Ancient and veteran trees
- Blanket bog
- Limestone pavements
- Coastal sand dunes
- Spartina saltmarsh swards
- Mediterranean saltmarsh scrub
- Lowland fen
The list will be set out in secondary legislation and aims to provide certainty for developers and LPAs during the first phase of implementation of BNG. This will be reviewed following a consultation next year, to allow the government to incorporate any learnings from the initial first months of BNG into a final list of applicable irreplaceable habitats.
Off-Site BNG – What can you do after 30 years?
One of the ways that developers can achieve the 10% net gain is through the off-site delivery of biodiversity. This will be done by developers purchasing off-site biodiversity units from landowners who have carried out habitat enhancement on their land (as opposed to enhancements being carried out by the developer on the development site). These off-site enhancements will need to be managed for a minimum of 30 years and be legally secured through either a s106 agreement (a planning obligation with the LPA) or a Conservation Covenant (entered into with a ‘responsible body’).
The latest blog post by Defra looks at what happens once the minimum 30 years required to manage the habitat ends, noting that, while landowners will be free to make their own choices, there are likely to be a range of financial incentives to keep the land under sympathetic management and to contribute to nature recovery in England.
The options include the following:
- Agree to enhance the habitat further and sell those benefits as additional biodiversity units. The site would be re-baselined at the 30-year mark using the biodiversity metric, the further enhancements worked out, and then the usual BNG process of legally securing the habitat and registering the units will be followed.
- If the planned enhancements have been achieved before the 30 years are up, an updated legal agreement can be set out which provides new goals, covering the remaining time on the initial agreement plus another 30 years.
- Benefits may be sold to other nature markets, such as voluntary carbon credits and biodiversity credits, through undertaking further habitat creation and enhancement.
- The land may be used for other purposes, however the impact of undoing any habitat works must be considered.
Other Government Guidance
As of the time of writing, the government has also released the following guidance in relation to BNG:
- What actions land managers can take ahead of January 2024 to prepare to sell biodiversity units;
- Combining environmental payments with BNG, including nutrient mitigation credits, grant payments or selling to other voluntary markets (e.g. carbon markets);
- What developers can count towards BNG (i.e. additionality);
- Statutory biodiversity credit prices;
- How to use the biodiversity metric to calculate the biodiversity net gain of a project or development; and
- 10 actions LPAs can take to prepare for BNG.
The government has also announced £16 million funding for LPAs to allow them to expand resource and upskill teams, increasing their capacity to work with developers and communities to ensure that the BNG requirement is met when it becomes mandatory.
Meanwhile, the application process for applying to become a responsible body is open, with the government issuing guidance on who can apply and the assessment criteria which will be used to determine applications.
As set out in the government’s updated timetable, the government have committed to publishing the following by the end of November:
- the legal regulations underpinning BNG;
- the statutory biodiversity metric (which is not expected to change much from the current version 4.0);
- the draft biodiversity gain plan template;
- a Habitat Management and Monitoring Plan template; and
- a package of BNG guidance that sets out further advice for landowners, developers and LPAs around their role and responsibilities in delivering mandatory BNG.
It is likely that this ‘package of BNG guidance’ will include guidance on whether variations of planning permissions are to attract the BNG requirement, whether any changes are required to national policy e.g. the NPPF, how the conservation covenants are to work, the list of responsible bodies for the purpose of the conservation covenants, and details on the registration fee to register land on the biodiversity gain register (used in relation to the selling of off-site biodiversity units). This biodiversity gain register, whereby landowners will register any biodiversity gain land they are offering and record the allocation of enhancements, must also open before BNG becomes mandatory in January 2024.