Mandatory biodiversity net gain requirements present opportunities for landowners and developers

The requirement to provide 10% biodiversity net gain will become mandatory when part six of the Environment Act 2021 (“the Act”) comes into force in November 2023. Developers will be required to demonstrate measurable improvements for biodiversity by creating or enhancing habitats in association with their proposals, presenting opportunities for landowners and facilitating sustainable development.

The Act will introduce a statutory planning condition requiring developers to submit a biodiversity gain plan demonstrating that the post-development biodiversity net gain is at least 10% more than its pre-development value.

This will be quantified by reference to ecological appraisals carried out before and after the development using a recognised metric in “biodiversity units”. These are the product of the size of an area, and the distinctiveness, condition and strategic significance of the habitat it comprises.

The migration hierarchy

The Act sets out a “mitigation hierarchy” which encourages developers to first seek to avoid harm by mitigating and enhancing biodiversity measures on site. If this is not possible, the developer should aim to secure local compensatory habitat creation, which may be on land owned by a third party. As a final option, the developer must buy statutory credits to fund cost-effective habitat creation projects according to local and national conservation and natural capital priorities. The government’s intention is that these credits will be priced unattractively so as to ensure that they are used as an option of last resort.

Where habitat is created or enhanced either on or off-site, this will need to be secured by the landowner and the developer, either entering into a s106 planning obligation or conservation covenant to manage that land for 30 years.

Conservation covenants are a new concept introduced by the Act and are private, voluntary agreements between a landowner and a “responsible body”, such as a conservation charity or government body, that can secure long-term conservation and environmental benefits. They will be capable of binding not only the initial landowner but also subsequent landowners.

This mandatory biodiversity net gain requirement clearly presents opportunities for landowners to create long-term conservation projects that will deliver biodiversity units that can be sold to developers, which will be particularly attractive where land is underused or difficult to farm.

On larger development sites, there are benefits to incorporating habitat creation and management as part of the wider stewardship of the site. This will be more attractive to the local planning authority in the determination of the planning application as well as being beneficial to the development and those who ultimately occupy it. Where the 10% net gain requirement is exceeded, there may even be opportunities to allocate units to future development.