Biodiversity Net Gain - Navigating the New Legislation Borrower Tips

Biodiversity Net Gain - Navigating the New Legislation

We know from our recent white paper research that 96% of developers are not confident in how to achieve BNG. But with the requirements that came into play in February 2024, it’s essential to understand what is expected of developers. Read our quick guide to understand the basics.

What is Biodiversity Net Gain (BNG)?

Biodiversity Net Gain (BNG) is a way of ensuring that any development and/or land management doesn’t have an adverse effect on the natural environment. The aim of biodiversity net gain is to leave the natural environment and biodiversity in a measurably better state than it was before the development.

Developers have to deliver a BNG of 10%, meaning every new development will increase or improve the quality of the natural habitat by 10% in comparison to what was there before.

Is Biodiversity Net Gain mandatory?

Yes. In England, BNG became mandatory on 12th February 2024, under The Environment Act 2021.

The Government initially consulted on biodiversity net gain assessment in 2018, where a two-year implementation period for mandatory BNG was agreed after the Environment Act came into force in 2021.

Who does the biodiversity net gain legislation affect?

It applies to all new developments, less exemptions (see details below). For small sites (defined below), there was an extended transition period to meet biodiversity net gain requirements, but since 2nd April 2024, the new legislation has applied. This delay was to lessen initial burdens and allow a longer period for developers and local planning authorities to adapt and prepare for the high volume of minor applications. 

Implementation for Nationally Significant Infrastructure Projects is planned for November 2025.

All of the following need to know the rules:

  • developers of:
    • major developments since Feb 2024
    • small sites since April 2024
    • large scale infrastructure projects from Nov 2025
  • land managers who want to sell in the BNG market
  • local planning authorities (LPAs)

Small sites are defined as:

  • Residential development where the number of dwellings is between 1 and 9 on a site of less than one hectare, or if the number of dwellings is unknown the site area is less than 0.5 hectares
  • Commercial development where floor space created is less than 1,000 square metres or the total site area is less than 1 hectare

The BNG provisions are only applicable in England; Scotland has yet to determine what measurable target to set for BNG, with CIEEM publishing a briefing note on the issue. Likewise, in Wales and Northern Ireland, there is no set metric for BNG - it works on a voluntary basis, emphasising the need for proactive consideration of the environment. The Welsh briefing note details how they plan to achieve this.



Exempt developments

Some developments are exempt from biodiversity net gain requirements. These include:

  • Developments below the threshold, that don’t impact priority habitat and impacts less than;
    • 25 square metres (5m by 5m) of habitat 
    • 5 metres of linear habitats such as hedgerows
  • Householder applications, including small projects such as home extensions, conservatories or loft conversions
  • Self-build and custom build applications, when all of the following conditions apply;
  • Biodiversity gain sites: developments undertaken for the purpose of fulfilling the BNG planning condition for another development are exempt.
  • High speed rail transport network: any development forming part of, or ancillary to, the high-speed railway transport network, comprising connections between all or any of the places or parts of the transport network specified in section 1(2) of the High Speed Rail (Preparation) Act 2013

Swan and Water Lilies, Castle Moat; Copenhagen; Denmark

Do mandatory BNG rules apply to planning applications submitted prior to 12th February?

No. The BNG requirements only apply to applications submitted after the legislation took effect in February. This also includes any applications made under Section 73 where earlier permission was granted prior to 12th of February.

BNG information will need to be provided at the application stage to support an LPA to determine whether or not the BNG objective will be met. Whilst LPAs will assess BNG after planning permission is granted through the mandatory conditions, they will still need clarity on a development’s proposed BNG position prior to granting permission in order to lay-out any necessary planning conditions and obligations to secure it.

How do you calculate biodiversity?

Biodiversity units can be lost through development or generated through work to create and enhance habitats.

The ecological impacts of developments have previously been assessed as part of the planning process, with a degree of measurement of the areas of habitat lost or gained. But these measurements don’t fully consider key aspects such as habitat quality or connectivity. BNG is different because it defines a transparent measurement of the likely ecological outcomes from proposed developments. 

For the purposes of BNG, biodiversity is measured in standardised ‘biodiversity units’ which are used to measure biodiversity value. There are three types of biodiversity units:

  • Habitat units
  • Hedgerow units
  • Watercourse units

A habitat will contain a number of biodiversity units, depending on things like its:  

  • size  
  • quality  
  • location   
  • type

Each is calculated in separate ‘modules’ of The Biodiversity Metric.

The Biodiversity Metric

The Department for Food, Environment and Rural Affairs (DEFRA) have outlined a habitat based approach to determining a proxy biodiversity value, developed by Natural England. The Biodiversity Metric is designed to provide ecologists, developers, planners and other interested parties with a means of assessing changes in biodiversity value (losses or gains) brought about by development or changes in land management. 

Mandatory BNG requires the use of the latest version of the Biodiversity Metric (version 4.0, published March 2023), an essential biodiversity net gain calculator for developers. No other metric is accepted.

The statutory Biodiversity Metric is used to measure: 

  • how many units a habitat contains before development 
  • how many units are needed to replace the units of habitat lost and to achieve 10% BNG

The statutory tool must be used to prove you have accurately calculated the number of biodiversity units for existing habitat, or habitat enhancements to achieve BNG.

The government has provided guidance on its use.

Irreplaceable Habitats:

There are certain types of habitats that the regulations deem ‘irreplaceable’. This includes ancient trees and woodland, saltmarsh, blanket bog, lowland fens, limestone pavements and coastal sand dunes. For these habitats, alternative arrangements must be made to minimise any negative impacts from development.

How can you achieve BNG?

Through site selection and layout, developers should seek to avoid or reduce any negative impact on biodiversity and improve the existing biodiversity by 10%.

There are three ways a developer can achieve this 10% biodiversity net gain:

    1. on-site units – enhancing and restoring the biodiversity within the red line boundary of a development site.
    2. off-site units – where developers can only achieve part of the 10% BNG on-site, they can make up the shortfall off-site, either on their own land outside of the development site or by buying off-site biodiversity units on the market (to explore this further, see Natural England or
    3. biodiversity credits -  if a developer cannot achieve on-site or off-site BNG, they then must buy statutory biodiversity credits form the government. This should only be considered as a last resort. The government will use the revenue to invest in natural habitat in England.

All three options can be combined, but they must be followed in this order. Following the steps in this order is known as ‘the mitigation hierarchy’ and is considered a key element of achieving BNG.

Avoid biodiversity loss Minimise biodiversity loss Compensation on site Compensation off site

                      ⇒                  ⇒                  ⇒

It’s important to be aware that any false or misleading information submitted for biodiversity net gain planning can lead to fines imposed by Natural England.

Country Track, Upper Slaughter; Cheltenham; England; UK

We know from the research we carried out for our white paper Solving the UK’s Housing Shortage, that in 2023 96% of developers were not confident in how to actually achieve BNG. As the new regulations came into force, there are more habitat banks, in conjunction with Natural England offering help and advice as well as off-site solutions, so it’s worthwhile talking to someone who understands the processes involved.

BNG is of course an extra consideration and cost for developers. Before you commit to a site, take time to consider your biodiversity net gain requirements, and above all, ensure your figures still stack up for your project. A 2 minute search on Brickflow will give you live borrowing costs and instantly determine whether or not your project is viable.


For further details on BNG, visit the Government’s website, where you can also find the Environment Act 2021 in full and the essential Biodiversity Metric.


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