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Biodiversity Net Gain (BNG)
This page serves as your essential resource for navigating the core concepts, compliance requirements, and practical implementation of Biodiversity Net Gain (BNG) in England.
Section 1: The Basics & Legal Requirements
BNG is an approach to land use and development that mandates habitats are left in a measurably better state than they were before the development took place. Legally, BNG is enshrined in the Environment Act 2021 (and implemented via amendments to the Town and Country Planning Act 1990) and is a mandatory condition of planning permission for most new developments in England.The requirement to deliver a 'net gain' formalises a new market for natural capital investment by quantifying environmental value into tradeable units.
Mandatory BNG for 'major' developments applies to all planning applications made from February 12, 2024. It was extended to 'small sites' from April 2, 2024. The mandatory requirement is to achieve a minimum of 10% increase in the site's biodiversity value post-development compared to the pre-development baseline. The 10% target drives the demand for off-site biodiversity units, creating a clear commercial opportunity for landowners to supply this demand. However, many Local Planning Authorities (LPAs) have higher requirements of up to 20%.
BNG applies to almost all development under the Town and Country Planning Act 1990. The key distinction is between 'major' and 'small sites', which use different metrics.The list of exemptions is intentionally narrow, but includes: Householder development (e.g., small extensions), development below a de minimis threshold (very small impacts, e.g., less than 25 sq. m. of non-priority habitat), and Irreplaceable Habitats (which require a separate, bespoke compensation strategy).
BNG must be legally secured for a minimum of 30 years from the date the development is substantially completed. This long-term commitment is vital to ensure the ecological gains are stable and reach maturity.On-site BNG is usually secured via a planning condition. Off-site BNG is secured through one of two primary methods: 1) A Section 106 Agreement (S106) between the developer, landowner (if different), and the Local Planning Authority (LPA). 2) A Conservation Covenant, a newer legal agreement that is managed by a responsible body.The requirement for a legal agreement and the 30-year term provides the contractual basis and long-term stability necessary for investing in and trading biodiversity units.
Section 2: The Process & Calculation
The 10% net gain is measured in Biodiversity Units using the Statutory Biodiversity Metric (currently version 4.0 or the Small Sites Metric). This is the only official mechanism accepted by Local Planning Authorities (LPAs).
The Mitigation Hierarchy is a four-step sequence that developers must follow to ensure that biodiversity loss is avoided wherever possible before any offsetting or compensation is considered. Compliance with this hierarchy is mandatory and must be documented in the Biodiversity Gain Plan.1. Avoid: Design the project to completely avoid impacting high-value or irreplaceable habitats (e.g., ancient woodland). This is the most effective and preferred step.2. Minimise: Where avoidance is not possible, take measures to reduce the duration, intensity, or extent of the negative impact (e.g., careful construction timing to avoid breeding seasons, creating protective buffers).3. Restore: Restore or improve any habitats that have been degraded or damaged on-site by the development process.4. Offset: Compensate for any residual, unavoidable loss of biodiversity units by creating or enhancing habitats either on-site or off-site to achieve the net gain.
Once the Mitigation Hierarchy is applied, the Biodiversity Gain Hierarchy dictates the order in which the 10% gain must be sought. Developers must pursue options sequentially, only moving to the next step if the previous one is proven unfeasible.1. Onsite: Creation or enhancement of habitats within the red-line boundary of the development site. This is favored to ensure local benefits.2. Offsite: Purchasing biodiversity units from a land manager or Habitat Bank who has registered their land on the national Biodiversity Gain Sites Register.3. Statutory Biodiversity Credits: Purchasing credits directly from the Government (Defra). These are deliberately priced at a higher rate than private off-site units to ensure the private market is used first.
The Biodiversity Gain Plan (BGP) is the definitive document that outlines how the development will achieve the mandatory 10% net gain.The BGP pulls together all the evidence, demonstrating how the BNG target is met and ensuring long-term ecological commitments are secured.The BGP is usually submitted after planning permission is granted but must be approved by the LPA before the commencement of development (as a pre-commencement planning condition).The BGP must include: the completed Statutory Biodiversity Metric calculation (pre- and post-development), detailed site maps showing habitat creation/enhancement areas, and the Habitat Management and Monitoring Plan (HMMP) for the 30-year term.
Section 3: Commercial Opportunities & Investment
A Habitat Bank is a strategic parcel of land where a landowner or specialised operator, for example Connected Habitat, proactively creates and enhances habitats to generate certified Biodiversity Units before a buyer (developer) needs them. This mechanism forms the backbone of the off-site BNG market. The process begins with habitat creation, often converting low-quality agricultural land into higher-value ecosystems like species-rich grassland or woodland. This ecological uplift is quantified using the Statutory Metric. To formalise the bank, the land must be legally secured for a minimum of 30 years using a land covenant (Section 106 Agreement or a Conservation Covenant), and the site must be entered onto the national Biodiversity Gain Sites Register to prevent units from being double-counted. The units are then sold to developers who need to meet their off-site BNG requirements. This market mechanism is scalable, allowing a single habitat bank to sell units to multiple development projects, guaranteeing the landowner a reliable, long-term income stream to fund the habitat's 30-year maintenance and monitoring obligations.
There is no fixed price for a biodiversity unit. The valuation is determined by a complex interplay of the supplier's costs and market demand influenced by the BNG Metric’s risk factors. The price a habitat bank charges must first and foremost cover all costs over the 30-year term, including legal fees, initial capital works (e.g., planting, groundworks), long-term management, monitoring, and a sufficient profit margin and risk buffer. The market value is heavily shaped by the Metric’s spatial and temporal risk factors. Units derived from rarer or harder-to-create habitats tend to be more financially valuable due to their scarcity. Furthermore, the Metric applies a Spatial Risk Multiplier that penalizes developers for securing units far from their development site; this makes locally sourced units significantly more desirable. Finally, the price ceiling is set by the Statutory Biodiversity Credits sold by the government, which are deliberately priced at a high premium (ranging from tens to hundreds of thousands of pounds depending on habitat type) to ensure the private market remains the primary source for meeting BNG obligations.
For developers, BNG is simultaneously a mandatory project cost and a new market opportunity. The cost of compliance begins with significant upfront investment in specialist services, including ecological surveys, metric calculations, legal agreements, and detailed design for the Biodiversity Gain Plan (BGP). If the 10% gain is achieved on-site, the developer accepts a non-negotiable 30-year liability for managing those new habitats, requiring long-term funding and monitoring. If off-site solutions are needed, the cost shifts to purchasing biodiversity units from the private market or, as a last and most expensive resort, buying Statutory Credits from the government.Conversely, BNG has established a clear, long-term commercial opportunity, primarily through Habitat Banking. Landowners can proactively create, enhance, and legally secure habitats on non-development land, generating certified biodiversity units to sell on the open market. Crucially, this opportunity extends to developers with large land portfolios who can establish their own Developer-led Habitat Banks on separate land they control. This strategy converts an external purchase cost into an internal delivery mechanism, providing cost certainty while enabling the sale of surplus units to other developers, thereby establishing a new profit centre and long-term asset base. The 30-year legal commitment underpinning BNG creates a stable, fundable asset class and a reliable, diversified income stream for land managers.
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