Biodiversity net gain (BNG)

Biodiversity (short for Biological Diversity) refers to the diversity of living organisms (plants, animals, fungi and microorganisms) from terrestrial, aquatic and marine ecosystems that make up our natural environment. Biodiversity includes diversity within species, between species and across ecosystems, representing the genetic makeup of living organisms and the complexity of the ecosystems they are found in.
The individual components of biodiversity—genes, species, and ecosystems—can provide us with a wide array of goods and services, both directly (such as foods and medicines) and indirectly (through the benefits we derive from healthy ecosystems – such as clean air and water, flood management and carbon storage). Biodiversity also has an intrinsic inherent worth, regardless of the use or benefits to us.
Biodiversity loss occurs when there is a temporary or permanent reduction in genetic, species or ecosystem diversity, through natural and human-induced factors including habitat loss, development, climate change and pollution.

Although many people immediately think of tropical rain forests and coral reefs as important areas of biodiversity (which of course they are), the UK itself contributes to global biodiversity through rare and important habitats, such as Atlantic rainforests and chalk streams, and species such as the great crested newt (over 50% of the world’s population may be in the UK). So conservation of biodiversity should start ‘at home’, and this is where the concept of Biodiversity Net Gain (BNG) comes into play.

Biodiversity Net Gain (BNG) is an approach to development in England that aims to leave the natural environment in a measurably better state than it was prior to the development taking place. It does this by encouraging developers to provide an increase in natural habitat and ecological features over and above those being affected. The Environment Act 2021 came into effect in February 2024, and most new developments going through the planning process prior to this date need to provide at least a 10% “net gain” in biodiversity. A tool – the Statutory Biodiversity Metric – is used to “measure” the biodiversity value of a site before a development, as well as the expected value post development. The difference in value is given as a net gain (or loss) in biodiversity “units”, and is often provided as a percentage.

BNG is only mandatory in England. Scotland, Wales and Northern Ireland have different laws around biodiversity uplifts:

• In Wales the ‘Net Benefits for Biodiversity’ approach aims to deliver an overall ‘qualitative’ improvement in biodiversity without using a ‘quantitative’ metric.
• In Scotland, the concept of BNG is being considered and integrated into the planning system through the National Planning Framework (NPF), with the primary focus on securing ‘positive effects for biodiversity’ and ensuring that developments contribute to nature’s recovery. The Scottish Government is currently developing a biodiversity metric to support this.
• In Northern Ireland there is currently no formal legislation for biodiversity enhancements.

The UK’s wildlife is continuing to decline according to the State of Nature (2023) report, and the UK is considered one of the most nature-depleted countries globally. Furthermore, so much habitat has been lost already in the UK, with only one in seven habitats in the UK in ‘good condition’, with this figure being one in 14 for woodlands, according to the report. As a country we have a responsibility to go ‘above and beyond’, and start increasing the area of important and biodiverse habitats, rather than just maintaining the status quo. Habitat loss is a key driver for many declining species in the UK, such as the turtle dove which has declined by 97% since 1970 (JNCC, 2023).
Although certain sites (such as National Nature Reserves and Sites of Special Scientific Interest) and species are protected under our environmental legislation, there are limited mechanisms to value, maintain, enhance and create wildlife habitats beyond these protected sites. So BNG provides a new, specific mechanism to address the issues of biodiversity loss in the context of development projects, through enhancing existing habitat and creating new habitat.
Having a mechanism that deters development of habitats of high ecological value (or ‘distinctiveness’), such as woodlands or meadows, will help reduce the ongoing declines in these habitats and the species that live in them. The BNG legislation also puts a higher responsibility on developers to maintain the newly-created habitats for at least 30 years, helping to ensure their success long-term.

BNG has a focus on habitats rather than species, as a ‘habitat’ is effectively the environment an organism requires to provide the resources and conditions it needs to survive and reproduce. So the benefits of encouraging the creation or maintenance of biodiverse habitats will in turn boost species abundance and diversity at the same time. When designed well, schemes can create a network of habitats that can provide a whole ecosystem for plants and animals.
Encouraging habitat creation and preventing habitat loss through BNG, can also help with an ecosystem services approach to tackling climate change, reducing greenhouse gas impacts, increasing resilience to flooding events, and benefitting important pollinator species, amongst others. Upland management and restoration is being used by the water industry to improve flooding resilience downstream. Re-afforestation and new wetland habitats can take more carbon dioxide out of the atmosphere. Encouraging developers to achieve BNG on-site (at least partially) can also bring more greenery to our urban spaces, which has been shown to be beneficial for both our mental and physical health.

The Environment Act 2021 sets out the following key components of mandatory biodiversity net gain:

• amends Town & Country Planning Act (TCPA);
• requires a minimum 10% gain calculated using the Biodiversity Metric and approval of a biodiversity gain plan;
• significant on-site habitat and all off-site habitat secured for at least 30 years via conditions, planning obligations or conservation covenants;
• BNG is delivered on-site, off-site and/or via a new statutory biodiversity credits scheme; and
• A National Gain Sites Register now exists for net gain delivery sites.

BNG will also be mandatory for Nationally Significant Infrastructure Projects (NSIPs) from late mid-2026. Small sites (such as residential developments where the number of dwellings is less than 10 on a site of an area 1 hectare or less) have a separate Small Sites Metric to use, which is simpler than the standard Statutory Biodiversity Metric. BNG will not be applied to marine habitats in the short term. Some projects are exempt depending on size, scale and impact; see Government Guidance to find out if it applies to your project.
The BNG process does not change existing legal protections for important habitats and wildlife species, and maintains the mitigation hierarchy of avoid impacts first, then mitigate and only compensate as a last resort.

The DEFRA Statutory Biodiversity Metric is a tool that has been developed by ecological experts to generate a value for habitats, based upon a range on “multipliers”, including the habitat’s ecological value or distinctiveness, its condition (i.e. does the habitat have a good diversity of indicator species, lack of damage, and variety in structure, for example), and the time it would take to create that habitat from scratch. The metric will calculate the biodiversity baseline value of the site, and how a development, or a change in land management, will change the value based upon inputting the proposed habitats into the metric.
For example, the metric can measure the impact of building houses, planting a woodland or sowing a wildflower meadow. Our experienced ecologists here at RSK Wilding, can use the Metric to work through different proposal options, to determine the best way to achieve the desired uplift in biodiversity, whilst creating a functional space for nature and/or people.
The DEFRA website provides more information, a user guide and the various metrics.

• ‘On-site’ includes all land within the boundary of a project. In a planning context, this usually means within a red line boundary. On-site does not include land within the ‘blue line’ boundary.
• ‘Off-site’ is all land outside of the on-site boundary, regardless of ownership. It can include land within a ‘blue line’ boundary adjacent to the site (and part of the scheme), where no development impacts will be incurred and only positive interventions are proposed to offset the impacts of the development.

Statutory biodiversity credits are different from off-site biodiversity units sold in the private BNG market. Statutory credits are a last resort, a way of acquiring biodiversity units needed to achieve BNG when all other options have been exhausted. If developers buy statutory credits, this is because it is not possible to restore habitats on-site or by buying off-site units close enough to the scheme. Developers wanting to buy statutory credits must prove why they cannot meet BNG using on-site and off-site options.

There are two main legal mechanisms for securing BNG.
On-site BNG requirements can be secured using a section 106 (S106) agreement. This is an agreement with the Local Planning Authority as part of the planning permission.
Off-site BNG can be secured through S106 agreements also, but owing to restrictions in the legal mechanism, a new system of ‘conservation covenants’ has been introduced. Conservation covenants are agreements on how an area of land can be used, and can include positive obligations as well as restrictive ones. They have to be for the public good and have a conservation purpose. Once a covenant has been agreed, it is registered as a local land charge and becomes binding for all future owners of the land for the duration of the agreement (normally 30 years in the case of BNG). The agreement must be between the landowner and a ‘responsible body’ (e.g. a local authority, public body or charity, or a private sector organisation) that is essentially the BNG regulator ensuring successful delivery of biodiversity uplift.

Responsible Bodies are the essential counterparty to the landowner or covenantor in a conservation covenant. The Responsible Body will ensure that the objectives of the conservation covenant are secured and delivered. They will be under a duty to monitor compliance and enforce any breaches as necessary. RSK Wilding is the driving force behind RSK Biocensus’s role as a Responsible Body.

A BNG Design Stage Report (sometimes referred to as a BNG Strategy, or similar) is submitted with your planning application and should set out what the baseline biodiversity is, how the development will affect this, and how you intend to deliver an overall 10% biodiversity net gain (generally through a combination of on- and off-site measures). It needs to include sufficient detail and commitment to provide the consenting body with the assurance that a 10% BNG associated with the proposed development is deliverable. A Biodiversity Gain Plan is submitted post-consent (primarily to discharge the Standard Biodiversity Condition, a planning condition imposed on all projects with a BNG component) and prior to commencement on site. It is a document which sets out how a development will actually deliver BNG, and where, and allows the Planning Authority to check whether the proposals submitted meet the biodiversity gain objectives. For example this may include demonstrating that off-site units from a habitat bank have been found and secured.

The Biodiversity Gain Site Register provides a publicly accessible source of information about off-site gain sites (often referred to as ’habitat banks’ across England. Natural England is the ‘Register Operator’ on behalf of Defra.

The recent legislation has created a new market for biodiversity units, similar to carbon offsetting. Landowners can create and/or enhance areas for habitats on their land and register the resultant uplift in biodiversity (along with a legal agreement) on the government’s new Gain Site Register. These biodiversity units can then be sold to developers that need to secure off-site BNG.
The units are calculated using the Statutory Biodiversity Metric, which is used to measure the value of habitat features (not species currently) on the land both before and after development (or change in land use, in the case of the creation of a habitat bank). These can be habitat area units (measured in hectares or square metres), or watercourse or hedgerow units (measured in km or metres). As an example: a hectare of good condition meadow comprises 27.6 biodiversity units, whilst a hectare of poor condition arable land is only 2 units; through habitat management, creating a meadow on this arable field will generate an uplift of 25.6 units.
There are ‘trading rules’ to be aware of (units of ‘high distinctiveness’ habitats need to be offset on a like-for-like or like-for-better basis), but units can be created or provided via a habitat bank, by a landowner with some excess land on which they have registered a BNG uplift, or by a statutory credit provider. Units so created (and approved) can then be sold to ensure that a development meets the minimum mandatory net gain in the planning system. These trading rules – whereby there are some habitats of higher distinctiveness that cannot be compensated for by lower or even equal distinctiveness habitats – mean that for some habitat losses a loss of a large area of low distinctiveness habitat (such as a monoculture arable field) can be compensated for with a smaller area of more ecologically valuable habitats.

Biodiversity Units are calculated on the basis of the Multipliers listed in “how do you measure BNG” above. There are three types of biodiversity units, which are calculated in three separate ‘modules’ of the metric (area units, where habitats are measured in hectares or square metres; hedgerow units; and watercourse units, where habitats are measured in Km or metres).

For those that own land and want to create a Habitat Bank, this means selling the uplift gained from improving the habitat condition or distinctiveness on site. Upfront costs will be required, covering a site assessment by an ecologist along with other relevant assessments (such as soil testing), and a detailed management plan will need to be written, explaining clearly how the habitats will be created and managed for the next 30 years. There is also a cost associated with registering the site and setting up a legal agreement, such as a Conservation Covenant.

The number of biodiversity units achieved when uplifting on-site or off-site can vary considerably. The current price of a biodiversity unit is approximately £30,000 (Spring 2025); however, unit price depends on the habitat’s condition, distinctiveness and size.

The price will be defined by the ownership model of the land (leased or bought outright), the habitat type to be created (a grassland will be cheaper to create than a wetland), the management regime to achieve the desired the condition of the habitat (this could be grazing with cattle, cutting twice yearly, managing water levels in wetlands), the monitoring of the habitat, and the additional legal (Conservation Covenant) and insurance (liability on the land) costs for 30 years. Given that there are upfront cost associated with setting up a habitat bank, as well as ongoing costs associated with managing it for 30 years, the unit sale price will need to cover all of these costs as a bare minimum and will ideally have contingency and a profit margin built in.

The payment from the developer to deliver offsite Biodiversity units are generally a one-off payment. This will be ring fenced for 30 years to pay for the management, monitoring and other costs associated with the habitat bank.