Since mandatory biodiversity net gain (BNG) became a legal requirement for most developments in England, developers have had to take a far more strategic approach to ecology during the planning process. Biodiversity is no longer something that can be considered once site plans have been finalised. Instead, it must be embedded into development proposals from the outset to achieve planning success and comply with current legislation.
Introduced through the Environment Act 2021, biodiversity net gain requires most qualifying developments to deliver at least a 10% uplift in biodiversity value compared with the site’s existing biodiversity. This uplift must be demonstrated using the statutory biodiversity metric, supported by a Biodiversity Gain Plan, and maintained for a minimum of 30 years.
For developers unable to achieve sufficient gains on-site, understanding the trading rules surrounding off-site biodiversity gains, off-site biodiversity units and statutory biodiversity credits has become increasingly important. However, biodiversity trading is tightly regulated and follows a clear hierarchy designed to protect the natural environment while improving biodiversity across England.
In this guide, we explain how biodiversity net gain trading works, when biodiversity units can be purchased, and how expert ecological advice can help your project progress through the planning system with confidence.
Understanding Biodiversity Net Gain
Biodiversity net gain is an approach to development that ensures projects leave biodiversity in a measurably better state than before work begins.
Since February 2024, mandatory biodiversity net gain has applied to planning permissions granted for most major developments, with qualifying small sites also becoming subject to the legislation shortly afterwards. While some developments remain exempt, including many householder applications, developments submitted before 12 February 2024, certain self-build projects and specific infrastructure schemes such as the high-speed rail network, the majority of development proposals must now comply with biodiversity net gain requirements.
To demonstrate compliance, developers must calculate both the pre-development biodiversity value and the anticipated post-development biodiversity value using the statutory biodiversity metric. The Biodiversity Metric assesses habitat size, habitat type, habitat condition and the strategic significance of habitats to generate biodiversity units that can be compared before and after development.
Planning authorities expect every qualifying scheme to demonstrate at least a 10% biodiversity uplift before development begins, making biodiversity net gain BNG an essential part of modern planning.
Why Biodiversity Trading Rules Exist
Many people assume biodiversity trading simply involves purchasing biodiversity units whenever ecological losses occur. In reality, the system is designed to ensure that biodiversity improvements happen in the right places and only after every reasonable opportunity has been taken to retain and enhance biodiversity on the development site itself.
Trading rules stipulate a directional manner in which habitats can be traded based on their rarity and inherent ecological value; in simplified terms, it ensures that common habitat types can be replaced with rare habitat types, but not the other way around. The most common habitats may be offset by creation of any other habitat; less common habitats must be replaced on a roughly like-for-like basis or better; rare habitats still (those with high distinctiveness) must be replaced on a like-for-like basis; and the most valuable habitats must be replaced on a like-for-like basis and with bespoke compensation and consideration required for any loss.
The biodiversity trading rules are intended to deliver genuine environmental improvements rather than allowing biodiversity losses to be offset too easily. Habitat improvements must represent measurable gains beyond what would have happened naturally, while biodiversity trading should contribute towards wider ecological networks and support local nature recovery strategies.
For this reason, planning authorities carefully assess how developers have applied the Biodiversity Gain Hierarchy before considering proposals that rely on off-site solutions.
The Biodiversity Gain Hierarchy Comes First
The biodiversity gain hierarchy sits at the centre of biodiversity net gain policy and underpins every biodiversity gain plan submitted as part of the planning process.
Before developers can consider purchasing biodiversity units, they must demonstrate that they have followed the hierarchy correctly.
The first priority is to avoid biodiversity loss wherever possible by protecting existing habitats, preserving ecological features and designing development around areas of ecological importance. Early master planning gives developers the best opportunity to retain valuable habitats while reducing environmental impacts.
Where habitat loss cannot be avoided, the next step is to minimise impacts through sensitive site design before delivering on-site gains using habitat enhancement and habitat creation measures. Examples include creating species-rich grassland, native woodland planting, wetlands, green infrastructure, wildlife corridors and sustainable drainage systems that provide both environmental and community benefits.
Only once these opportunities have been fully explored should developers consider off-site biodiversity gains. Planning authorities will often scrutinise proposed site plans to ensure the hierarchy has been followed correctly before approving any reliance on off-site units or biodiversity credits.
Calculating Biodiversity Value Using the Statutory Biodiversity Metric
Understanding biodiversity trading begins with understanding how biodiversity value is measured.
The statutory biodiversity metric, published by Natural England, calculates changes in biodiversity by comparing the pre-development biodiversity value of a site with its expected post-development biodiversity value.
The Biodiversity Metric generates biodiversity units by assessing several key characteristics, including habitat size, habitat type, habitat condition and strategic significance. Different habitat categories, such as woodland, grassland, wetlands or linear habitat, are assessed separately because habitat units cannot be traded between different habitat types.
For example, biodiversity units lost from woodland cannot simply be replaced with grassland units elsewhere. Like-for-like or better compensation is generally required to ensure habitat losses are addressed appropriately and ecological function is maintained.
The statutory biodiversity metric must be completed by professionals with appropriate ecological expertise, helping to ensure biodiversity metric calculations accurately reflect the ecological value of the site and comply with current guidance.
Preparing a Biodiversity Gain Plan
A compliant biodiversity gain plan is fundamental to achieving planning success.
Although planning permission may already have been granted, developers cannot commence work until the Biodiversity Gain Plan has been submitted and approved by the relevant planning authority. The plan must demonstrate how the development will achieve at least a 10% biodiversity uplift while complying with biodiversity net gain requirements.
The Biodiversity Gain Plan includes the site’s baseline biodiversity value, biodiversity metric calculations, details of habitat creation and habitat enhancement proposals, expected post-development biodiversity value and long-term management arrangements.
Where off-site gains are required, the Biodiversity Gain Plan must also explain how these biodiversity units will be secured and managed. It should include a detailed habitat management and monitoring plan, setting out how biodiversity improvements will be maintained throughout the required 30-year period.
Local planning authorities generally have up to eight weeks to determine whether the Biodiversity Gain Plan satisfies the biodiversity gain condition, although they may request additional information where further ecological evidence is required.
Protecting Existing Habitats Before Considering Off-Site Solutions
One of the most important principles within biodiversity net gain is that protecting valuable habitats should always take priority over replacing them elsewhere. The habitat trading rules (which categorise habitats by distinctiveness: low, medium, high and very high) give a good initial measurement for where to especially prioritise retention and safeguarding/enhancing over loss and replacement: the higher the distinctiveness, the more important it is likely to be to avoid impacts on that habitat parcel.
Developers are encouraged to integrate ecology into master planning from the earliest stages of project design, identifying opportunities to retain mature vegetation, protect existing biodiversity and incorporate enhanced habitats into development layouts.
Particular attention is given to priority habitats, ancient woodland and other areas of exceptional ecological importance. Some irreplaceable habitats are excluded from the standard 10% biodiversity net gain requirement because they cannot realistically be recreated elsewhere. Instead, developments affecting these habitats require careful consideration and may be subject to separate planning policies.
Urban development sites often face greater challenges in delivering sufficient onsite habitat creation due to space constraints. However, planning authorities still expect developers to demonstrate that all reasonable onsite opportunities have been explored before proposing offsite options.
By embedding biodiversity into site design from the outset, developers frequently reduce their reliance on biodiversity trading while creating developments that contribute positively to local ecosystems and the wider natural environment.
Purchasing Off-Site Biodiversity Units
Where a development cannot achieve the required biodiversity uplift through onsite habitat creation alone, developers may need to consider purchasing offsite biodiversity units.
However, this option should only be explored after the Biodiversity Gain Hierarchy has been fully applied. Planning authorities expect developers to demonstrate that opportunities to protect existing biodiversity, retain valuable habitats, minimise habitat loss and deliver onsite habitat enhancement have been exhausted before relying on off-site biodiversity gains.
Offsite biodiversity units are generated through habitat banks or dedicated biodiversity gain sites where landowners create, enhance and manage habitats specifically to provide measurable biodiversity gains. These biodiversity units can then be allocated to qualifying developments that are unable to achieve their required net gain on site.
Choosing appropriate off-site units requires careful ecological assessment. The habitats being created should provide like-for-like or better ecological compensation wherever possible, taking account of habitat type, ecological importance, strategic significance and local planning priorities.
Working with experienced ecological consultants ensures developers purchase the correct biodiversity units while avoiding unnecessary costs or delays during the planning process.
Biodiversity Gain Site Register and Habitat Banks
Before off-site biodiversity units can contribute towards a development’s Biodiversity Gain Plan, they must generally be secured from an approved biodiversity gain site.
Eligible sites are entered onto the Biodiversity Gain Site Register, providing transparency over where off-site biodiversity gains are being delivered and ensuring they meet the legal requirements established under biodiversity net gain legislation.
Many habitat banks create new habitats, restore degraded land or enhance existing habitats to generate biodiversity units that can be allocated to future developments. These projects not only help individual developments achieve compliance but also support wider ecological networks and local nature recovery strategies.
Selecting the right biodiversity gain site is about more than simply purchasing enough biodiversity units. Developers should also consider habitat categories, ecological connectivity and whether the proposed habitat contributes positively to local biodiversity priorities.
When Are Statutory Biodiversity Credits Used?
If suitable offsite biodiversity units cannot be secured, developers may be able to purchase statutory biodiversity credits from the government.
Statutory biodiversity credits are intentionally designed as a last resort rather than a routine solution. Developers must first demonstrate that they have fully explored opportunities to achieve biodiversity gains on site and investigated appropriate off-site solutions before statutory biodiversity credits will be considered.
This approach reinforces the principle that biodiversity improvements should ideally be delivered as close as possible to the affected development site while supporting meaningful ecological recovery.
A biodiversity net gain consultant can advise whether statutory biodiversity credits are appropriate for a particular scheme and help developers demonstrate compliance with the relevant trading rules where their use becomes necessary.
Securing Biodiversity Gains Through Legal Agreements
Purchasing biodiversity units alone is not enough to satisfy biodiversity net gain requirements.
The long-term delivery of off-site gains must be legally secured to ensure habitats are created, managed and maintained for the required period. This is typically achieved through legal agreements, planning obligations or a conservation covenant.
These legal mechanisms ensure that habitat creation and habitat enhancement are protected for a minimum of 30 years, providing certainty for developers, landowners, planning authorities and local communities.
Without appropriate legal security, off-site biodiversity units cannot normally be relied upon when preparing a biodiversity gain plan.
Experienced ecological advisers can work alongside legal teams to ensure biodiversity commitments are properly documented and meet current planning requirements.
Long-Term Habitat Management and Ongoing Monitoring
Biodiversity net gain does not end once planning permission has been granted or construction has finished.
Developers must demonstrate that biodiversity improvements will continue to deliver measurable ecological benefits throughout the required management period. Every biodiversity gain plan should therefore include a detailed monitoring plan and habitat management and monitoring plan explaining how habitats will be maintained for at least 30 years.
Long-term habitat management may include vegetation management, invasive species control, ecological surveys, water management, grazing regimes or woodland management depending on the habitat type being created.
Regular ongoing monitoring allows habitat performance to be assessed over time and helps identify any issues that could affect compliance with planning conditions. If habitats are not developing as anticipated, corrective management measures can be implemented before biodiversity value is affected.
Effective monitoring provides reassurance to planning authorities that biodiversity improvements remain genuine, measurable and capable of delivering lasting environmental benefits.
Common Biodiversity Trading Mistakes
Navigating biodiversity trading rules can be challenging, particularly for developers unfamiliar with mandatory biodiversity net gain.
One of the most common mistakes is leaving biodiversity assessments until late in the planning process. This often limits opportunities to redesign development proposals, resulting in greater reliance on expensive off-site solutions.
Another frequent issue is assuming biodiversity units are interchangeable. Because habitat units are assessed separately across different habitat categories, losses in one habitat type cannot simply be replaced with unrelated habitats elsewhere.
Developers may also underestimate the importance of strategic significance, habitat quality or existing biodiversity when completing biodiversity metric calculations. These factors directly influence biodiversity value and therefore affect how many biodiversity units are required.
Finally, failing to secure legal agreements or prepare a robust monitoring plan can delay planning approval even where sufficient biodiversity units have already been identified.
Engaging ecological expertise at the earliest opportunity helps developers avoid these issues while improving planning outcomes.
How Civity Can Help
At Civity, we help developers, landowners and project teams confidently navigate the complexities of biodiversity net gain and biodiversity trading.
Where on-site enhancements alone cannot deliver the required biodiversity uplift, we help clients identify appropriate off-site biodiversity units, assess suitable habitat banks and advise on statutory biodiversity credits where necessary.
We also assist with habitat management and monitoring plans, conservation covenants and the legal arrangements required to secure biodiversity gains over the long term, helping clients progress projects efficiently while remaining fully compliant with biodiversity net gain requirements.
Conclusion
Understanding biodiversity trading rules is now an essential part of achieving planning success.
Mandatory biodiversity net gain has introduced a structured framework that prioritises protecting existing biodiversity, enhancing habitats on site and using off-site solutions only where necessary. By following the biodiversity gain hierarchy, preparing a robust biodiversity gain plan and applying the statutory biodiversity metric correctly, developers can satisfy planning authorities while delivering meaningful environmental improvements.
Working with experienced ecological consultants from the earliest stages of a project allows biodiversity to be integrated into development proposals rather than treated as a planning obstacle. This reduces planning risk, supports compliance with current legislation and helps create developments that contribute positively to both local ecosystems and wider nature recovery objectives.
At Civity, we provide the ecological expertise and practical guidance needed to navigate biodiversity net gain trading rules with confidence, helping developers secure planning permission while delivering measurable, long-term benefits for the natural environment.
