The concept of mandatory Biodiversity Net Gain (BNG) has been a transformative force in the realm of environmental sustainability and development. More than 12 months on since its introduction in England and there is a steadily increasing number of offsite habitats being added to Natural England's Biodiversity Gain Site Register. There's also approximately 30 responsible bodies currently in place for securing conservation covenants. Now, two government consultations are underway to refine and expand on the regime further.

How might BNG policy evolve following these latest consultations and who will the proposed changes apply to? Our Natural Capital team outlines the key points for developers engaged in minor, medium and brownfield developments, plus what to expect for larger infrastructure projects in the future.

Where are we now with mandatory BNG?

When BNG came into effect in February 2024 it established a requirement in England for developers to ensure a 10% improvement in biodiversity on new developments (compared to pre-development conditions). This requires a baseline calculation of a site's pre-development biodiversity using the statutory biodiversity metric tool and a Biodiversity Gain Plan, setting out how the 10% net gain will be delivered, to be approved prior to development works commencing.

The policy is mandatory under the Town and Country Planning Act 1990 (TCPA), and seeks to ensure a consistent approach to mitigating impacts on biodiversity within the planning system, and improve habitat creation. Unless exempt, habitat enhancements must be delivered in line with the biodiversity net gain hierarchy, with the delivery options being: onsite (i.e. within the development site); offsite – whether on a developer's own land or by buying biodiversity units from third parties who undertake biodiversity improvements themselves; or by purchasing statutory biodiversity credits.

In its first year of operation, the policy has reportedly resulted in some 680-hectares of offsite habitat creation or enhancement by Local Authorities being recorded on the Biodiversity Gain Site Register as at the beginning of 2025. It has also seen a large number of developers (possibly more than might have been expected) seek to enhance existing habitats, or create new habitats as part of their development proposals onsite. There is increasing activity and with a growing number of responsible bodies to support the offsite habitat creation process, investment in this market is expanding. According to the National Audit Office, for example, the biodiversity units market is estimated to be worth between £135 million and £274 million annually, supporting conservation efforts.

There are lots of positives to highlight, while at the same time some areas where practical questions have arisen as part of the implementation process, and which these consultations consider. For example, in relation to the timing of baseline assessments to avoid double-counting of gains; the application of exemptions; and how to protect developers when contracting for biodiversity units in the commercial market.

One particular area that has prompted the first of the two consultations highlighted here is around cost challenges for those focused on smaller developments, as well as site constraints and access to the required environmental/ecological knowledge and expertise.

What are the proposals under the BNG consultations?

For minor, medium and brownfield developments

Some of the key areas where potential improvements are discussed are:

Exemptions

The consultations consider the extent of exemptions for minor developments to ensure the scope of BNG is more proportionate to the scale of development and impact on biodiversity.

Among these, one option presented is an exemption for all single dwellings to replace existing exemptions for self and custom build development. Another consultation proposal tests options for a higher de minimis threshold, so more minor development would be exempt in practice – currently any proposals impacting less than 25 square metres of habitat is exempt from BNG and the consultation considers raising this to 50, 100 or even 250 square metres. While this would provide relief to some of the challenges smaller developers may face in trying to deliver onsite enhancements by removing the BNG requirement, there is a danger that in setting the de minimis too high, large amounts of biodiversity could be lost, in aggregate, without compensation.

Under the Government's planning reform working paper on reforming site thresholds there is a proposal to introduce a new medium development threshold for sites between 10 and 49 homes. These sites will most likely face similar challenges to minor developments and so could also benefit from an increase in the de minimis threshold.

Full exemption from mandatory BNG for all minor developments (one to nine residential units) is also considered by the consultation. Similar to the affordable housing exemption for small developments this would help to simplify the planning process and reduce cost for smaller developers. The consultation notes that these sites can contribute to BNG through good practice and complying with policies that already encourage the retention of habitat (especially trees) on site, alongside delivery of green infrastructure.

Options are also set out for new exemptions for some specific types of development – including parks, public gardens, and playing fields, for example – which could mean exemptions might apply to non-minor development, if certain criteria are met.

Simplifying the small sites metric (SSM)

Feedback referenced in the consultation points to several challenges around the current SSM, including: complexity of the BNG calculation process for minor, low impact developments; variations in unit outputs between the SSM and the statutory biodiversity metric tool; and the need for a clearer definition of a 'competent person' who can carry out the SSM. Suggested options for improvement are:

  • Extending the use of SSM to the new medium development category mentioned above, which would increase the scale of use of the SSM from sites with one to nine dwellings on up to 1.0 hectares to those with up to 49 homes on up to 1.0 hectares.
  • Amendments to the SSM to increase flexibility to meet the BNG requirement through onsite enhancements. This would entail amending the biodiversity metric trading rules so that any habitat loss is compensated more generally rather than by the broad habitat type onsite or a higher distinctiveness habitat from offsite biodiversity units.
  • Simplifying and amalgamating habitats used in the metric to reduce misidentification. This would remove the level of technical expertise needed to differentiate between similar habitat types. Additionally, the use of image analysis could remove the need for ecological expertise in order to classify habitats.
  • Providing more guidance to aid identification of habitats for small site developments and clarify the definition of a 'competent person' for the purpose of SSM.

Increasing ease of access to offsite delivery

The consultation considers relaxing the biodiversity gain hierarchy for minor developments – an approach which prioritises onsite habitat improvements to contribute to biodiversity, followed by offsite gains, before then the option of purchasing statutory biodiversity credits.

While onsite gains play a crucial role in BNG, it is recognised that minor developments may be more constrained when it comes to this option. The suggested improvements discuss placing offsite gains on the same preference as onsite gains, for minor developments only; with statutory credits remaining a last-resort option. This change might allow developers to go straight to the commercial market to address their BNG requirements, rather than providing habitat enhancements onsite and needing to make arrangement for 30 years or more management and maintenance.

In addition, the consultation proposes changes to the Spatial Risk Multiplier (SRM) – a mechanism used within the Statutory Biodiversity Metric to account for the distance between a development site and the offsite BNG delivery location – insofar as it relates to minor developments. In particular, it considers whether it should be disapplied in order to make it easier for minor developments to access the offsite biodiversity unit market for a range of habitat types – this would have the effect of reducing costs for developers.

This proposed relaxation of the rules could help to lower BNG costs for smaller developers and make it easier to source offsite units to meet BNG requirements. At the same time, it may help to open up habitat banking for some parts of the country that are 'nature degraded' but don't necessarily have the development sites nearby to which biodiversity units can easily be sold.

A further simplification to the process could include the use of Local Nature Recovery Strategy (LNRS) areas for the assessment of spatial risk. The use of LNRS would increase access to a wider range of offsite providers, meaning offsite delivery may be further from the development site.

Addressing brownfield challenges

In line with the Government's commitment to delivering 1.5 million Homes by the end of this year, changes to how BNG is delivered for brownfield sites are also explored and include:

  • Updating metric definitions, guidance, and condition assessment to support ecologists in identifying open mosaic habitat (OMH) – a priority habitat that mainly exists on previously disturbed brownfield sites and supports a wide range of invertebrates.
  • When OMH habitat is not available offsite, allowing the loss of OMH habitats to be compensated with alternative habitat mosaics that offer similar ecological benefits.

For nationally significant infrastructure projects

Alongside the consultation for minor, medium and brownfield development, a further consultation is also being run on the implementation of mandatory BNG for nationally significant infrastructure projects (NSIPs). Yet to be introduced, this policy looks at a broader range of reforms to improve the efficiency of the planning system and environmental obligations – including measures set out in the Planning & Infrastructure Bill, such as the Nature Restoration Fund and updates to relevant National Policy Statements, discussed in our earlier article following the publication of the draft legislation in March.

Originally expected to be implemented in November 2025, the introduction of BNG for NSIPs is now set for May 2026. While it will apply the framework of the existing regime for TCPA developments, there are a number of key areas of difference brought out in the proposals.

This separate consultation on NSIPs provides an opportunity to comment on how the proposals take final shape when they come into effect in a year's time. Notable points in the proposal include:

Mandatory BNG for NSIPs

The proposals put forward the intention to make BNG a mandatory requirement for all NSIPs from May 2026. This would apply to onshore projects in England up to the mean low-water mark, including all temporary, permanent, and associated development within the Development Consent Order site boundary.

Implementing through BNG statements

A core biodiversity gain statement will be introduced to ensure consistency across different NSIP types, as well as help reduce complexity for developers and decision makers. As part of this approach a 'model text' is proposed for biodiversity gain statements and which aims to clarify the relevant biodiversity gain objective for the development the statement applies to. Once the wording is agreed, this statement will be replicated and applied to each NSIP sector and these are intended to have the same effect as if they were in the National Policy Statement. The separate statements will then be incorporated into the relevant National Policy Statement at its next review point.

Calculation and implementation

BNG for NSIPs will follow the statutory biodiversity metric used for calculating biodiversity value for other developments under the TCPA. This is to provide consistency across the planning regimes and ensure that NSIPs are able to purchase biodiversity units from the offsite market.

Some minor updates are proposed to the statutory biodiversity metric user guide before May 2026 in order to provide additional clarity for developers on how the metric can be applied for NSIPs. One example here is around how to apply the metric to a scheme that includes associated development separate from the main site.

What is consistent with the existing BNG regime is that developers will be required to demonstrate a minimum 10% biodiversity gain through a Biodiversity Gain Plan. Additionally, it's recognised that NSIPs may need to use some 'temporary land' during construction and that this land would be included in a site's 'pre-development biodiversity value' – and so will be subject to the 10% BNG requirement.

Addressing unique NSIP challenges

The consultation acknowledges the scale and complexity of NSIPs compared to TCPA schemes, including post-consent design changes, as well as the temporary land use point above and other issues. While the same biodiversity gain hierarchy applies, some flexibility is proposed to allow for onsite or offsite delivery in the first instance, without being required to prioritise onsite. The proposals aim to balance biodiversity improvements with the practicalities of large-scale infrastructure development.

What will the BNG proposals mean for you?

While the implementation of BNG for NSIPs will now be next May, changes to the BNG regime for minor and medium developments could follow later this year. For those developers operating at that end of the sector, it will be important to consider how the changes might impact your development pipeline and the projects you are taking forward. The good news is that experience and progress gained to date is informing changes that will help streamline the real world application of BNG to these types of developments – which is both positive for business and will bring even greater benefits for the environment.

Both consultations are open until 24 July 2025 and feedback is being sought from developers, environmental groups, planners and local authorities. It provides an opportunity for those working under the existing BNG regime, and those who it will impact when it's translated for NSIPs next year, to put their views forward and help shape the changes being made.

We continue to monitor changes in this area closely and work with clients to support them in their overall strategy for incorporating nature and biodiversity into their developments – considering both current and potential future BNG requirements. For more insight into this topic, visit our webinar on 'Biodiversity net gain – 12 months in' and sign up to receive future related articles and updates.