Biodiversity Net Gain: what happens after 30 years

There are many aspects to consider when looking at a Biodiversity Net Gain (BNG) agreement, including the economics and impact on tax reliefs. However, one of the most frequently asked questions about land for off-site BNG is what happens at the end of the 30-year agreement.

If you are planning to sell off-site biodiversity units for mandatory BNG, you need to commit to managing the habitat for 30 years. The habitat works need to be legally secured through either a Section 106 (S106) agreement or a conservation covenant. When this finishes, there are several options you can pursue.

Selling units into the off-site BNG market is a good way to secure long-term nature recovery on your land and could be the first step towards a long-term alternative income source. Landowners can make their own choices, but there will likely be a range of financial incentives to encourage them to keep the land under sympathetic management and contribute to vital nature recovery if they choose to. Defra hopes landowners will see the benefit of keeping the land in BNG or in an alternative nature market or other conservation agreement.

At the end of your agreement, you could agree to enhance the habitat further and sell those benefits as biodiversity units. To re-enter the site into the off-site BNG market, you would have to re-baseline it after 30 years using the Biodiversity Metric, work out the enhancements you want to make and then follow the usual BNG process of legally securing the habitat and registering the units.

You may not need to wait until the end of the 30-year agreement to start this process. Where planned BNG habitat enhancements for the first agreement have been achieved before 30 years have elapsed, an updated legal agreement can be set that provides new goals and covers the remaining time on the initial agreement plus another 30 years. For this to be permissible, the enforcing body would have to verify the achievement of the first planned enhancement in terms of quantity, habitat type and condition.

Opportunities for nature markets are growing, including voluntary carbon credits and biodiversity credits. This is being boosted by demand from investors and corporates to account for their carbon and biodiversity impacts. You may be able to sell the benefits to these markets after your legal agreement has ended by undertaking further habitat creation or enhancement.

After the 30-year period is complete, the land does not technically need to be kept for further biodiversity improvements, however, the availability of different income streams to further maintain or enhance the habitat may make this the most attractive option. The process and implications of undoing habitat works include the expense of clearing the land and any relevant environmental legislation at the time.

The end of an S106 or conservation covenant may not mark the end of all legal obligations regarding biodiversity retention. Where landowners have stacked a BNG project with other environmental schemes, the legal agreements for these other schemes may outlast BNG and require that habitats continue to be managed.

Biodiversity sites could also accrue additional protections over 30 years as their conservation value grows. The government has no intention to designate BNG sites by default.

Woodland creation is considered a permanent land use change. A new broadleaved woodland is likely to achieve ‘poor’ or ‘moderate’ condition during a 30-year BNG agreement because of the time it takes for trees to grow. At the end of this agreement, a new baseline can be calculated for a new management plan to generate additional biodiversity value and more BNG units to vend in a new 30-year BNG agreement. Woodlands can also offer more than one income stream. A woodland with a BNG agreement could also produce wood products throughout its lifetime, such as through thinning, which fells some trees to make room for remaining trees to grow to full size.

Once land has been converted to woodland, a felling licence is required to fell the trees; the Forestry Commission generally issues felling licences with a requirement to restock, meaning that once created, woodlands are permanent.

Defra has confirmed that the introduction of mandatory 10% BNG for new housing, industrial or commercial developments will now be January 2024. This will provide time for remaining government guidance to be published and for local planning authorities to finalise their processes.

From April 2024, BNG will be introduced for small sites – developments of less than 10 residential units on a site area of less than 1ha, or non-residential units of under 1,000 square metres. The CLA has a guidance note for members planning developments that will require BNG and those wishing to explore the opportunities for supplying biodiversity units in our BNG hub below.

For members who have already created or plan to create off-site biodiversity units and would like to link with potential buyers, the CLA has worked with the Future Homes Hub on a non-commercial, free online Biodiversity Unit Finder. This will enable homebuilders to contact local landowners. Please contact your local CLA office if you would like to register land on the Biodiversity Unit Finder.