The Biodiversity Net Gain Planning Condition
Planning consent granted for most applications submitted after 12 February 2024 (from 2 April 2024 for “small sites”) is deemed to be subject to a mandatory biodiversity net gain (BNG) pre-commencement condition, unless an exemption applies (schedule 7A of the Town and County Planning Act 1990). An approved development cannot be lawfully implemented without discharge of the BNG condition.
The BNG condition stems from the “nutrient neutrality” principle which seeks to neutralise the adverse effects of development projects on protected sites as high levels of nutrients (specifically nitrates and phosphates) pollute watercourses and vulnerable catchment areas.
To discharge the BNG condition, a developer must provide at least a 10% BNG as part of the development, so that a positive net gain is achieved from the consented development on completion. BNG can be provided on site, off site or via the purchase of statutory credits – whichever way, it will be additional expense that developers (and their funders) must consider from the outset.
The price of statutory credits is known to be exorbitant and is intended to be a “last resort”, after the developer has unsuccessfully explored on site and off site mitigation. Only once a developer has determined that providing BNG within the boundaries of the development is not achievable may they explore providing mitigation off site.
For off site mitigation, a developer may pull in other land in which they have an interest (but which does not form part of the development) or buy “credits” from the private market. In respect of the latter, a developer will typically enter into an “allocation agreement” to purchase nitrate and/or phosphate credits from a landowner with land designated to accommodate BNG. Such designated land is bound to remain in such designated use for at least 30 years, usually pursuant to conservation covenants or a section 106 agreement.
The allocation agreement should clearly set out what is payable and when, and whether or not the purchase is site/development specific. It should also include an obligation on the landowner to allocate the purchased credits upon receipt of the allocation fee, to notify the relevant authority about the purchase and to procure the registration of the purchase on the biodiversity gain sites register.
Lastly, it is prudent to obtain from the relevant planning authority confirmation that the purchase will discharge the BNG condition.
A note that the BNG condition does not currently apply to nationally significant infrastructure projects but this is expected to change this year, 2025.
For further information, please do get in touch.