What Does Biodiversity Net Gain Mean for Landowners? 

As Biodiversity Net Gain (BNG) becomes law in 2024, its rollout creates some genuinely exciting opportunities for people who own or manage land. If you are such a person - and you’re interested in enhancing the habitats on your land - BNG offers a brilliant chance to not just measure the improvements you make but also to make a lot of money in doing so by selling off-site Biodiversity Units (BUs). 

In this blog, we will explore what BNG means for landowners, and how they can benefit from the new regime that will be rolled out over the course of 2024.

So what does BNG - and all these other acronyms - mean? 

There’s no getting around it, there is a lot of technical jargon when it comes to BNG. Navigating the world of environmental conservation and management as a landowner involves understanding a range of key terms and concepts. These terms not only shape the regulatory landscape but also influence the opportunities and responsibilities of landowners. Let’s explore what these essential terms mean and their implications for landowners in the realm of biodiversity and habitat conservation.

• Biodiversity Net Gain is a new policy that is being rolled out in England that will require nearly all property development to secure a 10% uplift on how much biodiversity there is on their site. We have all the details you need here.
• Biodiversity Units (BUs) and statutory biodiversity credits, while interconnected, serve different roles in environmental conservation. BUs are measured via the Biodiversity Metric, which is used to quantify the ecological value of a habitat. They are the ‘currency’ of the metric and are what is used to see if a site has reached the required uplift. Statutory biodiversity credits, on the other hand, are effectively tariffs that a developer must pay if they are unable to secure the necessary uplift on their site or purchase the needed off-site BUs. 

• Conservation Covenants are legally binding agreements between landowners and a ‘responsible body’ (in most cases, a local planning authority). They establish the commitment to protect and preserve biodiversity on a specific piece of land. The covenant sets restrictions and obligations for land use, such as prohibiting development or mandating habitat maintenance. The enforcement of these covenants is overseen by the responsible body, which also conducts regular monitoring to ensure compliance. 

• Habitat Banking is a conservation tool that involves the creation, restoration, enhancement, or in some cases, preservation of habitats for the purpose of generating BUs. 

• Nature Markets (also known as environmental or ecosystem markets) are markets where ecological services like carbon sequestration, biodiversity enhancement, and water purification or alleviation are quantified and traded. These markets allow for the buying and selling of credits (such as BUs or nutrient credits) which represent a measurable environmental benefit.

• Nutrient Credits might sound similar to biodiversity credits, but they are a wholly different policy - a set of market-based tool used to address the issue of nutrient pollution, particularly in water bodies like rivers, lakes, and estuaries. For those interested in nutrient credits and their role in the BNG market, detailed information is available here.

There are a lot more terms (and you can read more about the BNG policy in detail here). But now that we have the basics covered, let’s look at what the creation of a market for BUs means for landowners!

The need for BUs will be a big opportunity!

From April 2024, nearly all property developments in England will need to comply with BNG. This means that they will need to either create or source BUs. If they don’t get the BUs that the Biodiversity Metric says they need, they won’t be allowed to commence development. This is a new, legal requirement… and it’s going to apply to tens of thousands, if not hundreds of thousands, of applications across England. 

From small-scale family farms to large estate owners, creating and selling BUs offers a new revenue source for all landowners. The market for biodiversity units is anticipated to be worth £135m - £274m annually, offering a significant chance for landowners to diversify their income streams and tap into a new and exciting asset class for building wealth. 

Once you know what the situation is on your site - and how many BUs you can create, Joe’s Blooms’ tools (which are being rolled out from January 2024) will allow you to complete all the stages you need to access this new and exciting market:

• The Explore Tool will help you find out how many BUs you can create on your site
• The Biodiversity Net Gain Tool (coming soon) will allow you to complete the metric sheet with an ecologist and all necessary documentation to get approval from the LPA. 

Once you have been approved by your LPA and registered with Natural England, we can - working with our partners - also help you take your freshly minted BUs to market. These tools will be ready soon, and if you’re interested in keeping in touch, please drop us an email!

But, you need to be committed to BNG

Of course, creating BUs comes with its own responsibilities - not least the fact you will need to commit to looking after the enhanced habitat for at least 30 years and have plans in place for all the expenses related to monitoring the enhancements and reporting on whether you’re complying with your duty. Also, creating habitats will come with costs - off-site providers will need to plan for operational expenses like staff and machinery. All of these things should inform the price you set for the BUs that you create. 

(It is also important to note that landowners cannot create and sell BUs on land where they are already obliged to create or enhance habitats for specific regulatory purposes like tree restocking, marine licensing, or remediation under environmental regulations). 

In conclusion…

BNG is clearly a very exciting opportunity for landowners all over England. No matter who you are, if you have land that is eligible for off-site enhancement, you can create substantial new capital by enhancing and/or creating biodiversity enhancements on your site. And, more importantly, you will be doing your bit to restore nature in England. 

It’s a really exciting new opportunity - and we hope you will join us!