CIVITY NGE Blog

Since the Environment Act made biodiversity net gain (BNG) mandatory in February 2024, we’ve received numerous queries about the distinction between BNG units and statutory biodiversity credits. As experts in delivering biodiversity net gain solutions, we’re here to clarify these crucial concepts and help you navigate the BNG market effectively. The Fundamentals of Biodiversity Net Gain The concept of biodiversity net gain has transformed how we approach development in the UK. At its core, BNG requires development projects to enhance natural habitats and increase biodiversity value by at least 10% compared to pre-development levels. This improvement can be achieved through several approaches within the biodiversity gain hierarchy, starting with on-site habitat creation and enhancement, moving to off-site biodiversity gains through habitat banks, and finally, using statutory biodiversity credits as a last resort. Biodiversity Units (BUs) Explained BNG units represent the cornerstone of biodiversity net gain, serving as a measurable currency for habitat improvement. As authorised sellers of BNG units, we work closely with land managers and developers to facilitate these improvements through carefully planned habitat creation and enhancement projects.  Exactly how much land one BNG unit equates to depends on three things for existing habitats:  – distinctiveness (the type of habitat); – condition (what kind of state is that particular habitat parcel in); and – strategic significance (the habitat contained within a strategic area for biodiversity). One hectare of arable land is usually valued at around 2 biodiversity units; while a hectare of top quality lowland mixed deciduous woodland in a strategic area could be worth as many as 20.7 BUs. The creation of BNG units involves a comprehensive process that begins with detailed biodiversity metric calculations. These calculations help us understand the baseline biodiversity value and potential for improvement. We then establish conservation covenants and develop long-term habitat management plans, ensuring that the enhanced biodiversity value is secured and maintained for generations to come. All of our units are registered on the Biodiversity Gain Site register, providing transparency and accountability in the private market. Speaking of the private market, BNG units offer several distinct advantages over statutory credits. They’re more cost-effective, they can be produced locally, and by working with a provider such as ourselves, you can see exactly where your money is going. Perhaps most importantly, they directly contribute to local nature recovery and support natural ecosystems, often leading to significant on-site gains that benefit both the developer and the local environment. Understanding Statutory Biodiversity Credits Statutory biodiversity credits, provided by Natural England, serve a different purpose in the BNG framework. These credits are designed as a last resort within the biodiversity gain hierarchy, coming into play only when other options have been exhausted. They’re characterised by fixed pricing set by the UK government and typically come at a premium compared to private market units. At the time of writing, statutory credits start at £42,000 per credit, which means an effective start price of £84,000 each (since two must be purchased for every one unit required). This compares with a market-led pricing for BNG units which generally fall between £20,000-£35,000 per unit for the same type of habitat. There are specific circumstances where statutory credits might become necessary. These include situations involving irreplaceable habitats, time-sensitive projects, or nationally significant infrastructure projects. They also serve as a backup option when local BNG units aren’t available in a particular area. The Process of Purchasing BNG Units Our approach to selling BNG units prioritises clarity and efficiency. We review your metric results and provide a simple quote. Our quotes allow for partial units (to 4 decimal places). All reporting and registration costs necessary to discharge your planning obligations for the offset are included, and no ongoing commitment, liability, or payment is required following purchase. Working with Local Planning Authorities Our extensive experience working with local authorities has taught us that early engagement is crucial for success. Different authorities may have varying requirements, and we are well-versed in working with local authorities to guide them through the offsetting process along with developers. We’ve found that securing planning permission is made easier by having robust BNG arrangements in place from the outset. The Growing BNG Market The introduction of mandatory biodiversity net gain requirements has created a dynamic market for off-site biodiversity units. We’re witnessing increasing demand for habitat banks and the development of new off-site BNG land. As the market evolves, pricing structures are becoming more sophisticated, and there’s an enhanced focus on sustainable habitat restoration practices. See our current price list here.  Special Considerations for Developers The decision between on-site BNG, off-site gains, or statutory credits carries significant implications for developers. Timeline considerations are particularly crucial, as different approaches can impact planning application requirements, development site constraints, and habitat creation timeframes. Financial planning must account for unit costs versus credit prices, as well as long-term management commitments and potential returns on investment. Future of BNG Units and Credits Looking ahead, we anticipate significant evolution in the BNG market. We expect to see increased availability of off-site units, accompanied by more sophisticated habitat management approaches. Enhanced monitoring systems will likely emerge, and we may see greater integration between BNG units and other environmental markets, such as nutrient credits. How We Can Help At Civity, we’ve positioned ourselves at the forefront of the BNG market, specialising in providing off-site biodiversity units and facilitating habitat creation projects. Our expertise extends to supporting biodiversity gain objectives, managing habitat banks, and advising on BNG requirements. We understand the complexities of the system and work diligently to find the most effective solutions for our clients. Conclusion The distinction between BNG units and statutory biodiversity credits represents more than just a technical difference in how biodiversity net gain is achieved. While both mechanisms serve to deliver biodiversity net gain, units from the private market often provide more cost-effective solutions and the ability to ensure that those solutions are local to your development site. The choice between units and credits should ultimately weigh heavily in favour of units, with credits generally only to be used as a last resort when no units of the required type are available. If you’re seeking to achieve BNG requirements for your development site or are interested in creating habitat banks, we’re here to help. Our team of specialists can guide you through biodiversity metric calculations, habitat creation planning, legal agreements, and long-term management strategies. Contact us today to discuss your BNG needs and explore the most effective path forward for your project. Frequently Asked Questions About BNG Units and Credits What’s the difference between BNG units and biodiversity credits? BNG units are created in the private market through habitat creation and enhancement projects, typically offering more cost-effective solutions for developers. Biodiversity credits, on the other hand, are provided by Natural England as a last resort option when private market units aren’t available.  How much do BNG units cost compared to statutory credits?  BNG units from the private market are typically more cost-effective than statutory credits. At the time of writing, statutory credits start at £42,000 per credit, which means an effective start price of £84,000 each (since two must be purchased for every unit required). This compares with market-led pricing for BNG units, which generally fall between £20,000 and £35,000 per unit for the same type of habitat. While exact prices vary based on location, habitat type, and market conditions, private market units often provide better value for money as they’re subject to market competition. Statutory credits are fixed-price and generally more expensive to encourage private market solutions. Can I mix BNG units and statutory credits for my development? Yes, you can use a combination of both BNG units and statutory credits to meet your biodiversity net gain requirements. However, the biodiversity gain hierarchy encourages developers to first maximise on-site gains, then seek off-site biodiversity units, and only use statutory credits as a last resort. How long does it take to secure BNG units? The timeline for securing BNG units varies depending on unit availability, location, and specific project requirements. If creating your own biodiversity units, the process takes several months to complete, including initial assessment, legal agreements, and registration. We recommend starting the process early in your development planning to ensure smooth integration with planning applications. When purchasing from a provider such as Civity, full costs can usually be confirmed on the same day, and the entire process can be completed within a few days. We also have long-term conditional sale options for both projects and habitat banks that are still in the pipeline. What happens to BNG units after purchase? Once purchased, BNG units are legally secured through conservation covenants and planning obligations. The habitat improvements that generate the units must be maintained for at least 30+ years, with regular monitoring and management to ensure biodiversity gains are achieved and maintained. If units are purchased from Civity, we take care of the ongoing monitoring and management requirements; there is no need for ongoing involvement or commitment from the developer. Can I sell BNG units from my own land? Yes, landowners can create and sell BNG units from their own land if they meet certain criteria. This requires registering the land on the biodiversity gain site register, creating a habitat management plan, and entering into necessary legal agreements. We can guide you through this process to maximise your land’s potential. How are BNG units calculated? BNG units are calculated using the statutory biodiversity metric, which considers factors such as habitat type, condition, size, and strategic significance. The calculation process requires ecological expertise and must be carried out by qualified professionals using the latest version of the metric tool. Do small development sites need BNG units? Yes, since April 2024, most development sites, including smaller ones, require biodiversity net gain. However, the approach to achieving BNG may vary depending on the site size and circumstances. Small sites might find off-site solutions through BNG units that are particularly practical. Note: This article reflects the current state of BNG regulations as of February 2024. As the market continues to evolve, specific details may be subject to change. Always consult with BNG specialists for the most up-to-date information and guidance.