Habitat creation
The next iteration of BNG as allowed for in the Environment Act 2021 is a ratcheting up of this process demanding not only the replacement of habitat but an increase in biodiversity before and after a development of 10% with some local authorities requesting a 20% increase.
The creation of BNG sites will result in a tradeable accredited unit. With BNG Units only being required at the point of achieving planning permission most of these trades will be on an Option basis rather than an outright sale and because of the way the Biodiversity metric calculates BNG until the donor site and the specific development are identified the actual calculation of net gain cannot be finalised.
See our latest research piece about those local authorities where BNG policies have been adopted.
How is BNG calculated?
There are a number of ways that biodiversity can be calculated, from direct on site counting of flora and fauna through to high level web-based assessments including the use of the DEFRA Biodiversity Net Gain Metric as a proxy which equates land use with biodiversity. Where we are asked to value the biodiversity of a site there are a number of different calculation basis that can be used. The approach we have adopted is to use the Biodiversity Net Gain metric and the nascent market values within this arena to provide a proxy value. It should be noted that this element of the green puzzle cannot yet be traded but could be used by some entities to describe the monetary value of the biodiversity on their property.
Timescales
Biodiversity projects are typically 30 to 40 year arrangements which include arrangements to bind the land for the agreed use. Those purchasing the units usually pay an option arrangement fee and the balance of the agreed sum on receipt of planning permission. Those land managers entering the biodiversity market should be aware that their land will be bound into the specific land use for a period of up to 40 years with this being secured on their land title via a Land Charge registered at the Land Registry.
Trade
Where it is possible to identify a donor site now we will create an Option based relationship between the donor and developer so that the planning application can progress with certainty over the off-site provision.
Do you have land that could be used to provide BNG? The Natural Capital Exchange allows you to register that site with us so that when we get a requirement within your locality we can match the two together.
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