Scope of biodiversity net gain requirements for new developments becoming clearer with UK government consultation

Hogan Lovells

Hogan Lovells

The government has launched a consultation on the implementation and proposed regulations to implement mandatory biodiversity net gain (BNG) introduced under the Environment Act 2021. When these come into effect, virtually all new developments will be required to provide for at least 10% BNG.  The consultation explores the scope for exemptions, minimum thresholds, offsite BNG and the use of credits. It also considers how to apply the new requirements to outline permissions, phased developments, and planning variations. We explore some of the main proposals directed at traditional Town and Country Planning Act applications. The consultation, which closes on 5 April 2022, also seeks views on how the BNG requirements will apply to the Nationally Significant Infrastructure Projects

The long awaited Environment Act 2021 was granted Royal Assent on 9 November 2021 (see our earlier article in Related Materials).   However, many of the new requirements and associated targets will only come into effect at a later date through additional regulations.  A new provision in the Town and Country Planning Act 1990 will require all new developments to demonstrate a 10% BNG which must be maintained and managed for at least 30 years. The government’s latest consultation, published on 10 January 2022, looks at the requirements for BNG for both conventional developments under the Town and County Planning Act 1990 and development consent orders for Nationally Significant Infrastructure Projects under the Planning Act 2008.    

Possible exemptions

The Environment Act included exemptions from BNG for permitted development and urgent Crown development, but also anticipated the introduction of further exemptions. The government now proposes to add householder applications (single home alterations and extensions), and changes of use would also be exempt.  Conversely, the government seeks views on including self-build/custom house-building and development within the BNG regime. It is also considering whether or not to include certain types of development which were previously proposed as exempt.  These include: certain qualifying brownfield sites; temporary permissions; and development in conservation areas and national parks where permitted development rights are not otherwise applicable.  The suggestion is that these now remain subject to mandatory BNG and are not exempt. 

To ensure BNG requirements are proportionate, a minimum threshold is still proposed which will be based on the total number of habitat types within the development site rather than the size of the site, meaning developers won’t know whether the requirement applies until certain surveys are complete. Further threshold-based exemptions would apply in relation to development which has negligible impact on the existing habitat, or minimal impacts on habitats with low or medium distinctiveness scores (based on Natural England metrics). 

Phased and outline permissions and later variations

The government acknowledges the need for flexibility for more complex developments. It proposes that additional information will be required when making outline or phased applications.  This additional information must set out the intended delivery strategy across the entirety of the development and demonstrate how this would be achieved on a phased basis. The cumulative BNG commitments would be secured through planning conditions which would require approval and implementation of BNG plans for each phase.

For variations of planning permissions, approved BNG plans would only need to be updated and re-approved where the proposed changes resulted in a change to the post-development biodiversity values of the on-site habitat.  The same baseline would be applied to any revised BNG plan. It is hoped this would avoid authorities seeking increased gains over those already agreed in relation to the development, which is good news for developers.

Off-site gains and biodiversity credits

Applications for new development will need to establish baseline levels and set out, through a biodiversity gain plan, the combination of on-site mitigation and enhancement. Where this is not sufficient to reach the required BNG, proposals can include gains off-site. These are confined to England and are also subject to the 30 year maintenance period. In effect, it is a biodiversity credit system that would allow developers to bank additional BNG on one site and then apply those credits (or ones bought from other owners) on a development where it is not otherwise possible to fully achieve BNG.

The Environment Act enables landowners (including local authorities) to create or enhance habitats for the purpose of selling biodiversity credits, which can then be included to supplement on-site and off-site gains.  The consultation makes clear that the government is not interested in creating a centralised trading platform, or to take responsibility for brokering, and expects unit prices to be commercially agreed. Market analysis on potential supply and demand has been published alongside the consultation, and the government confirms it is continuing to work on developing an approach for regulating this market as part of other environmental markets.

For larger developers and investors this trading market will be an important component, especially where they wish to maximise commercial development from a site which would not be possible because of the on-site BNG requirements, and where they do not have an alternative site that could fully accommodate the off-site BNG requirements.

Higher targets and early delivery

Local authorities will not be prevented from setting higher BNG targets at a local level, but they are expected to present these early in the local plan or development process and also carefully consider the feasibility of such proposals. Impacted developers and land owners need to consider making suitable representations to the authority before such increased targets are formally adopted. Only last week, Cambridge City Council agreed to proceed with the adoption of the Greater Cambridge Biodiversity Supplementary Planning Document, which will seek 20% BNG, though this remains subject to testing within the evidence of the emerging Greater Cambridge Local Plan.

The government expects that BNG commitments will be delivered within 12 months of commencement of the development and only where not possible, would this be extended to prior to occupation. Where delivery of on-site gains is delayed, it is proposed that this would be reflected in the metric calculation associated with the value of the biodiversity units.

Looking ahead

The consultation seeks views through a hefty 55 questions, but it is hoped that this will be constructively used to influence the subsequent regulations and guidance. Once those are in place, BNG requirements are intended to come into effect in November 2023, although the consultation seeks views on a ‘slightly extended transition period’ of up to 12 additional months in relation to smaller development sites. BNG requirements for Nationally Significant Infrastructure Projects, which are also explored in the consultation, are not proposed to come into effect before 2025. The consultation can be found here and closes on 5 April 2022.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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