BNG Explained
For Developers
Introduction
Since BNG became mandatory for developments in England, understanding its intricacies has been crucial for project success. This comprehensive guide builds on our expertise in brokering high-integrity BNG units, offering in-depth insights into the regulations, processes, and strategies to help you navigate this new landscape efficiently.
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1. Understanding BNG: The Fundamentals
What is Biodiversity Net Gain?
Biodiversity Net Gain is a mandatory approach to development that requires projects to deliver a measurable improvement in biodiversity value. Introduced under the Environment Act 2021, BNG mandates a minimum 10% increase in biodiversity compared to pre-development levels, maintained for at least 30 years post-completion.
Broadly, net gain can be achieved through three compensatory measures:
1. On-site interventions
2. Off-site interventions (on developer land or through a third-party with purchased units)
3. Purchasing statutory credits.
How is biodiversity value quantified?
Biodiversity value is measured in standardised 'biodiversity units' using the Defra Biodiversity Metric (currently version 4.0). This tool assesses:
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Habitat type and size
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Distinctiveness and condition
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Strategic significance
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Connectivity to other habitats
A qualified ecologist typically conducts this assessment, providing a baseline for your BNG calculations.
When does BNG become mandatory?
Mandatory BNG already applies to most of England and is being rolled out in phases:
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From January 2024: Large sites (10+ dwellings or 0.5+ hectares)
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From February 12, 2024: All non-exempt developments
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From April 2, 2024: Small sites
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November 2025: Nationally Significant Infrastructure Projects (NSIPs)
Are any developments exempt from BNG requirements?
Yes, certain types of developments are exempt from mandatory BNG. These include:
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Householder applications (e.g., extensions, loft conversions)
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Projects impacting <25m² of habitat or <5m of linear features
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Self/custom builds (≤9 dwellings on <0.5 ha)
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Some brownfield sites meeting specific criteria
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Permitted development and urgent Crown development
However, local policies may still require biodiversity considerations for exempt projects, so we advise confirming specific requirements with your relevant LPA .
How does BNG affect the planning process?
BNG introduces additional steps into the planning process, including early ecological surveys, integration of biodiversity enhancements into project design, submission of BNG information with planning applications, preparation and approval of a Biodiversity Gain Plan, and long-term management commitments. These requirements necessitate early consideration of BNG in the development process and may impact project timelines and budgets.
2. The Biodiversity Gain Hierarchy
What is the Biodiversity Gain Hierarchy?
The Biodiversity Gain Hierarchy is an approach developers must follow when planning and implementing biodiversity improvements. It outlines a series of steps in order of priority, emphasising on-site measures before exploring off-site options. This ensures developments make the most effective contributions to local biodiversity while achieving the mandatory 10% net gain.
The hierarchy is designed to guide decision-making and ensure that biodiversity is considered at every stage of the development process, from initial site selection through to post-development management.
What are the steps involved?
The Biodiversity Gain Hierarchy consists of the following steps:
1.
Avoid Adverse Affects
Developers must preserve existing habitats where possible, especially area areas with medium, high, or very high distinctiveness.
2.
Mitigate & Minimise Unavoidable Affects
Where impacts can't be entirely avoided, developers must minimise and mitigate them as much as possible.
3.
Enhance Habitats On-Site
Once impacts have been minimised, developers must enhance the quality of existing habitats within the development site.
4.
Create Habitats On-Site
If further action is needed to achieve a 10% net gain, developers should explore creating new habitats within the development area.
5.
Secure Off-Site Biodiversity Units
If on-site measures fall short, developers can secure off-site biodiversity units, which represent habitat creation or enhancement elsewhere. At Wellshead Natural Capital, we facilitate this process, offering access to a network of verified Biodiversity Gain Sites across the South West and beyond.
6.
Purchase Statutory Credits
As a last resort, if all previous options have been exhausted, developers may purchase statutory biodiversity credits from the government.
How must I demonstrate adherence to the Biodiversity Gain Hierarchy?
Developers must demonstrate their adherence to this hierarchy in their Biodiversity Gain Plan (BGP). This involves documenting decision-making at each stage, justifying progression to subsequent steps, quantifying biodiversity outcomes using the metric, and showing consideration of local ecological networks, stakeholders, and strategies.
What are the implications of not following the hierarchy?
Failure to demonstrate adherence could result in planning approval delays, increased costs if off-site compensation is required unnecessarily, potential legal challenges to planning decisions, and reputational damage.
It's crucial to document your approach thoroughly and justify any deviations from the hierarchy.
How can developers best prepare to implement the Biodiversity Gain Hierarchy?
Effective implementation requires several elements:
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Early ecological assessments
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Integration of biodiversity considerations into initial site designs
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Early engagement with ecologists and local authorities
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Comprehensive documentation of decisions
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Exploration of on-site solutions before considering off-site options.
3. Calculating BNG Requirements
How do I calculate my BNG requirements?
Calculating BNG requirements involves several steps:
1.
Baseline Assessment
Conduct a habitat survey of the development site using UK Habitat Classification.
2.
Input Data
Use the statutory biodiversity metric tool (currently Biodiversity Metric 4.0) to calculate pre-development biodiversity units.
3.
Assess Development Impact
Assess the post-development scenario, including any on-site habitat retention or creation.
4.
Calculate Net Change
Determine the difference between pre- and post-development biodiversity units.
5.
Achieve 10% Net Gain
Ensure the post-development value is at least 10% higher than the pre-development baseline.
Who should conduct my BNG calculations?
A qualified ecologist should conduct the assessment. Their expertise is crucial for accurately classifying habitats, assessing their condition, and using the metric tool correctly.
However, for small sites (<10 dwellings), developers can use the simplified Small Sites Metric. This version can be completed by someone familiar with the site, such as a project manager or landscape architect.
If you're unsure about which approach is best for your project, our team can advise based on your specific circumstances.
What factors can affect BNG calculations?
BNG calculations are influenced by several key factors:
1.
Habitat Condition
This refers to the overall health and quality of the existing habitats on your site.
2.
Habitat Distinctiveness
This measures how rare or ecologically important a habitat type is.
3.
Strategic Location
This considers how well the habitat connects to other natural areas or aligns with local conservation priorities.
4.
Temporal Risks
This accounts for the time it takes for newly created habitats to reach their 'target condition'. Longer establishment times increase risk and reduce the initial habitat value.
5.
Spatial Risks
This factor considers how far the compensatory/offsite habitat is from the development site. Greater distances typically reduce the value of the compensation.
6.
Additionality
This ensures that BNG gains are genuinely new and wouldn't have happened anyway. Only additional improvements count towards your BNG target.
Understanding these factors helps optimize BNG strategies, potentially reducing costs. For instance, enhancing an existing poor-quality habitat may offer greater value and be more cost-effective than creating a new habitat entirely.
How often should BNG calculations be updated during the development process?
BNG calculations should be reviewed at key stages:
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During initial assessment and design
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When submitting the planning application
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If significant changes are made to plans
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When preparing the final Biodiversity Gain Plan
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Periodically during the 30-year management period
Regular reviews ensure the strategy remains accurate and achievable throughout the development process.
4. Planning & Documentation
What BNG documentation do I need for my application?
Planning applications must include confirmation of BNG applicability, pre-development biodiversity value, proposed approach to achieving 10% gain, and details of significant on-site enhancements.
A draft Biodiversity Gain Plan (BGP) is often beneficial, though not mandatory at this stage.
What must a Biodiversity Gain Plan Include?
A comprehensive Biodiversity Gain Plan should contain pre and post-development biodiversity values, detailed habitat creation/enhancement proposals, off-site gain details (if applicable), a 30+ year Habitat Management and Monitoring Plan, and evidence of adherence to the mitigation hierarchy.
This plan is crucial for demonstrating BNG compliance and must be approved before development can commence.
When should I submit my BGP?
Submit your Biodiversity Gain Plan to your Local Planning Authority (LPA) after receiving planning permission but before starting development.
The LPA then has 8 weeks to approve or refuse your plan. Early preparation and submission can help avoid delays to your project timeline.
Can I start development before my BGP is approved?
No, you cannot start development until the LPA has approved your BGP. This approval is a pre-commencement condition of your planning permission.
How can I ensure my Biodiversity Gain Plan is approved?
To increase the likelihood of approval, ensure your plan is comprehensive, clearly demonstrates adherence to the Biodiversity Gain Hierarchy, provides robust evidence for your biodiversity calculations, and outlines a feasible long-term management strategy.
Early engagement with the LPA can also help align your plan with local biodiversity priorities.
5. Off-Site Units, Trading Rules & Pricing
How do off-site biodiversity units work?
Off-site units represent biodiversity improvements made outside your development. They can be created on other land you own, purchased from third-party providers, or acquired through habitat banks.
All off-site gains must be registered on the national biodiversity gain sites register to ensure transparency and prevent double-counting. These units are measured using the same biodiversity metric as on-site measures, allowing for standardised comparisons.
If you're considering off-site compensation as part of your net gain plan, Wellshead Natural Capital offers access to a diverse portfolio of verified, high-quality off-site units across the South West and beyond.
What are the trading rules for biodiversity units?
Trading rules ensure "no net loss" of biodiversity. Key principles include:
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Trading up or like-for-like: Replace lost habitats with similar or higher value ones.
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Habitat distinctiveness matters: Very High Distinctiveness Habitats are considered irreplaceable.
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Spatial risk: Units created further from the impact site are less valuable.
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Additionality: Gains must be new and not already planned or funded.
What is the current price range for biodiversity units?
As of 2024, prices for offsite units range from £10,000 to £45,000 per unit, though outliers exist on both ends of the spectrum. Here are some examples:
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Woodland units in strategically significant locations near major cities might command up to £60,000/unit.
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Grassland units in less competitive areas may be available for around £15,000.
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Wetland and intertidal habitats often sit at the higher end of the price range due to their ecological importance and the challenges in their creation.
It's important to note that these prices are for the units themselves and don't include long-term management costs.
How is the market expected to evolve?
The market for biodiversity units is still maturing, with regional variations and fluctuations based on supply and demand. As the market evolves and more data becomes available, pricing is expected to become more standardised. However, local factors will likely continue to play a significant role in determining unit costs.
Early engagement with unit providers and consideration of bulk purchases can sometimes lead to more favourable pricing for developers. As more habitat banks are established and the supply of units increases, this could potentially lead to more competitive pricing in some areas.
It's also worth noting that future policy changes, such as adjustments to the required net gain percentage or the introduction of new habitat types into the metric, could impact unit pricing and availability.
Are there strategies for optimising BNG unit purchases?
Developers can employ several strategies to optimise their BNG unit purchases:
1.
Early Engagement
Source units early in the planning stage for better options and pricing.
2.
Bulk Purchasing
Consider aggregating requirements across multiple projects for volume discounts.
3.
Local Research
Align purchases with Local Nature Recovery Strategies for added value and potential premium reductions.
4.
Hybrid Approaches
Balance on-site measures with off-site purchases to optimize costs and ecological outcomes.
5.
Market Analysis
Monitor regional market trends and consider less competitive areas where appropriate.
6.
Long-Term Partnerships
Establish relationships with landowners or brokers for preferential terms on future purchases.
7.
Phased Acquisition
For long-term projects, consider securing options on future units to hedge against price increases.
Engaging with experienced BNG brokers like Wellshead Natural Capital provides access to market insights, established networks, and tailored strategies to maximise the value of your BNG investments.
How can I find suitable off-site biodiversity units?
Off-site units can be sourced through:
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Local habitat banks
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Direct agreements with landowners
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Brokers
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Trading platforms
The new national biodiversity gain sites register provides a central database of available units.
Early engagement with potential providers is advisable to secure suitable units for your project at the most competitive price.
What legal agreements are required for off-site gains?
Off-site gains require legal agreements to secure long-term management and monitoring of the habitat. Broadly, these take the form of either a:
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Section 106 agreements with an LPAs
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Conservation Covenants with a 'responsible body'
They outline responsibilities for habitat creation and maintenance, implementation timelines, reporting schedules, financial provisions, and contingency measures. These agreements may also address public access, educational opportunities, and integration with wider ecological networks.
Wellshead Natural Capital can guide you through these legal requirements, ensuring your off-site BNG solution is secure, compliant, and optimised for both ecological and planning outcomes.
What factors influence the pricing of off-site units?
Pricing for off-site biodiversity units is dynamic and varies significantly based on several factors.
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Habitat type: Rarer or more ecologically valuable habitats command higher prices. For example, woodland units are typically more expensive than grassland units.
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Location: Units closer to urban development areas are often priced higher due to increased demand and higher land values.
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Strategic significance: As defined in Local Nature Recovery Strategies, this can add a 15% premium to unit prices.
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Supply and demand: The availability of units in a particular area and the level of development activity can impact prices.
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Complexity of habitat creation: Habitats that are more challenging to create or restore may be priced higher.
Can I combine approaches to achieve my 10% net gain?
Yes, you can use a combination of on-site improvements, off-site units, and statutory credits (as a last resort) to meet your BNG requirement. This flexible approach allows you to optimise your strategy based on site constraints, costs, and local ecological opportunities.
Can I sell excess biodiversity units from my development?
If you create surplus units beyond your BNG requirement, you may be able to sell these. However, this needs to be proposed during the planning process and secured through appropriate legal mechanisms.
Our team can advise on the potential for creating saleable units within your development.
6. Legal & Financial Considerations
What happens if I do not meet BNG requirements?
Failing to deliver on BNG commitments can have serious consequences:
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Breach of planning conditions or obligations
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Enforcement action or financial penalties
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Requirements for additional compensatory measures
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Reputational damage
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Difficulty obtaining planning permission for future projects
To mitigate these risks, it's crucial to have robust plans and contingencies in place.
How might BNG affect the viability of my development?
BNG can impact development viability in several ways:
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Increased land requirements for on-site habitat creation
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Costs for purchasing off-site biodiversity units
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Long-term management and monitoring expenses
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Potential planning process delays
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Restrictions on developable area to protect existing habitats
However, well-planned BNG can also add value through improved amenity, increased property values, and enhanced corporate social responsibility. Early consideration of BNG in your project planning can help optimise costs and benefits.
Can BNG costs be factored into land valuations?
Yes, BNG costs are increasingly considered in land valuations and transactions. Developers should factor potential BNG requirements into site viability assessments and land purchase negotiations.
The Wellshead Difference
What Sets Us Apart
Access to a network of high-quality, verified BNG sites
Vetted Sites & Suppliers
Deep understanding of South West ecosystems and planning landscape
Local Expertise
Tailored solutions for developments of all sizes and complexities
Versatile Options
Links with local conservation organisations and forward-thinking landowners
Conservation Network
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