Biodiversity Net Gain: A new concept and a new opportunity
What is Biodiversity Net Gain?
Embedded deep within the Environment Bill is the requirement for most types of development to secure measurable 10% gains in biodiversity. Put simply, prior to development the biodiversity value of the land upon which the development is sited will be measured; developers will need to show post-development that biodiversity loss is fully compensated and that there has been a 10% net gain.
While some BNG will be secured within the development, in most cases off-site compensation will be needed through the creation of new habitats elsewhere. The BNG value of these new habitats will be measured as ‘BNG Units’ which can be sold to developers to off-set the losses arising from their development.
What does BNG mean for landowners?
The introduction of this new legal requirement is the most significant change in nature conservation law for over 40 years. The implications spread much wider than restoring biodiversity, with knock on effects for land prices, the development industry, land management and farming. Legislation will create a market in BNG units where BNG providers will be looking for opportunities to purchase land upon which BNG units can be created, as well as seeking out those who can manage existing BNG units. There are evidently commercial opportunities for those that can provide and manage BNG, and once enshrined in law, demand will be high.
What are the economics of BNG?
When the government set out its plans for the Environment Bill it published an economic impact assessment (IA) which set out the government’s thinking and offered indicative figures for the cost of delivering a BNG unit. It’s clear that the government expects local markets to develop for BNG units, governed by supply and demand. The IA report offered an indicative cost of £11,000 per unit. Our rule of thumb is that a hectare of land can create 10 BNG units, other organisations have however given other values for a BNG unit.
In Warwickshire and some surrounding counties, Planning Authorities have been trialling BNG, developing their own metric for measuring BNG loss and gain. The Warwickshire metric values them at £43,000. Once the market has become established, market forces will dictate the value of a BNG unit but it’s clear that the figures involved are not insignificant.
There will also be a significant influence on where the units will be created. BNG providers will be seeking to get as big an uplift in BNG units as possible. Land that currently has high biodiversity value, such as woodland or species-rich hay meadows will be avoided as they will offer a low level of gain. The greatest uplift is likely to be achieved on lower grade agricultural land that does not generate high agricultural values but currently has low ecological value.
When will it be introduced?
Although there will be a grace period before BNG will become mandatory it’s already a policy requirement under the National Planning Policy Framework for developments to provide ‘measurable net gain’ for biodiversity. In short BNG is happening now and the demand for BNG units is already there.
Andrew Baker is an ecologist with over 30 years’ experience working on large scale infrastructure and land management projects. A fellow of the Chartered Institute of Ecology and Environmental Management, he will be speaking on BNG at the Farm Business and Innovation Show in November 2021.
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