Date 22 February 2022
Hing Kin Lee, Environmental Impact Manager, NextEnergy Capital
The Government’s response and summary of responses to the January 2022 Biodiversity Net Gain (BNG) regulations and implementation consultation was released yesterday (21 February 2023), together with guidance notes on what BNG is; the selling of biodiversity units as a land manager; and combining environmental payments (stacking).
Much of the response offers confirmation on the approach provided during consultation. In summary and by way of a recap, here are some key points to take away:
There are still some unanswered questions, definitions, and further information that will be clarified as part of the secondary legislation and accompanying guidance.
Facilitating the potential to trade additional units will really make a difference to biodiversity in the world of business. Conservation costs money. By allowing developers to sell excess credits, this has the potential to be a positive mechanism whereby we are incentivised to redirect finance back into nature, where it is needed the most in order to reverse the decline in biodiversity loss.
To unlock this potential, the devil will be in the detail. The consultation response clarifies that in order for developers to sell excess biodiversity units, we must ensure the excess gain is registered and that there is genuine additionality for the excess units sold. This means that in any given development, the units that could be traded will be those that are over and above the gains required by the original development, which would be delineated by the planning requirements for a given scheme. A large emphasis would then be on the development’s biodiversity gain plan to ensure additionality is properly documented, separating out habitats that are intended for species/protected site mitigation, from habitat gains over and above the Local Planning Authority permission requirements.
Whilst this position is under review with regard to whether or not this approach would impose an artificial ceiling on the gains achieved, it provides a potential way forward to deal with the challenges of additionality when it comes to biodiversity. The question raised would then be that of integrity. Given the Gain Register would not act as a verifier or validator of units, standards would then be regulated through the legal agreements to secure the land, the planning obligation (S106) or conservation covenant and/or third-party habitat banks, brokers or trading platforms that may enter the market.
As a solar investor, developer and operator, we act as land managers across extensive portfolios. We know what we need to do to ensure that we are improving biodiversity value across our sites and there is growing clarity on how we can really unlock that potential to maximise BNG across our portfolio.