Need a Biodiversity Net Gain Plan?

What are Statutory Biodiversity Credits?

Statutory biodiversity credits play a critical role in achieving biodiversity net gain (BNG) requirements, which became mandatory from February 12, 2024. This article explains what statutory biodiversity credits are, their purpose, and the process for developers and local planning authorities.

Statutory biodiversity credits are a financial mechanism that allows developers to contribute their fair share to biodiversity enhancements across England when on-site or off-site biodiversity solutions are not feasible. BNG was introduced to combat the effects of development projects and climate change on the natural world, and over recent years has led to an emerging market for biodiversity offsets.

The statutory biodiversity credits system ensures compliance with the requirement for development schemes to achieve a 10% improvement in biodiversity and for effective monitoring of the nature recovery for a fixed period of 30 years. The aim is to realise significant differences in the biodiversity of the area in question, with relevant species protected and land conserved appropriately. As a result, biodiversity markets have developed and to ensure a scheme’s success, advice from conservation practitioners is likely to be required. Here are the key points:

Purpose: BNG credits can be used for funding biodiversity projects across England when solutions on or off a site are insufficient.

Pricing: This is based on the habitat created, maintenance, and monitoring costs, with a mark-up to avoid undercutting the off-site market in the private sector.

Last resort option: These credits should only be used if solutions are not viable on the site in question or a nearby site.

Who needs to know about this?

Statutory biodiversity credits are relevant for developers with responsibility for delivering mandatory BNG as part of planning applications, and Local Planning Authorities (LPAs) which oversee and advise developers on achieving BNG and approve biodiversity gain plans.

Steps to achieve mandatory biodiversity net gain

Developers are required to follow the biodiversity gain mitigation hierarchy for measuring biodiversity and achieving the 10% BNG when making planning applications. The steps are as follows:

1. On-site biodiversity enhancement

Enhance and restore biodiversity within the development site’s red line boundary: this is the preferred method to reverse biodiversity net loss and secure a biodiversity equivalent, and should be prioritised.

2. Off-site biodiversity units

If solutions on a site prove insufficient, developers can enhance biodiversity on their own land away from the site, or purchase off-site biodiversity units from the market to compensate for habitat loss and achieve the required biodiversity outcomes. Habitat banks may provide a solution if the required amount of units are available.

3. Statutory biodiversity credits

If neither on-site nor off-site solutions work, developers can buy statutory biodiversity credits. This last resort option requires proof that other possibilities for habitat creation near the site have been exhausted.

All three of the above options can be combined, but must be followed in order and this order is referred to as the biodiversity gain hierarchy. Statutory biodiversity credits differ from off-site biodiversity units sold in the off-site private market.

How Statutory Biodiversity Credits work

Statutory biodiversity credits are distinct from off-site biodiversity units. Here’s what you need to know:

Purpose: To fulfil BNG requirements when other options for enabling nature recovery are unavailable.

Usage: Can complement solutions for on and off a site, or fulfil the entire BNG requirement if needed.

Proof required: Developers must demonstrate why all other options are not viable.

When to buy Statutory Biodiversity Credits

Purchasing statutory biodiversity credits requires careful planning:

Non-refundable: Purchases are final, so developers should be certain of their requirements from biodiversity offsets.

Timing: Only buy credits when ready to submit the biodiversity gain plan and discharge the biodiversity gain condition.

How to buy Statutory Biodiversity Credits

1. Estimate costs

Use the statutory biodiversity metric tool to calculate the number and type of credits needed.

2. Consult with the local authority

Discuss your BNG strategy and confirm that statutory credits are appropriate to fulfil biodiversity targets.

3. Apply to the statutory biodiversity credits scheme

Submit an application, which may take up to eight weeks for approval.

4. Payment and proof

Once approved, pay for the credits and include proof of purchase with your biodiversity plan.

Determining Credit needs

The number and type of statutory biodiversity credits required depends on:

The Biodiversity Metric Tool: This calculates the shortfall in biodiversity units after accounting for on-site and off-site solutions.

Calculation details:

• Include biodiversity values before and after development.
• Use the metric tool’s ‘unit shortfall summary’ tab for precise requirements.

Key terms in the Metric Tool

Understanding the terminology in the metric tool is essential:

Tiers: Credits are priced in tiers based on habitat type:

• Area habitats (A1 to A5)
• Hedgerow habitats (H)
• Watercourse habitats (W)

Spatial Risk Multiplier (SRM): A credit is worth 0.5 biodiversity units. Developers must buy two statutory credits for every biodiversity unit needed.

Proving the need for Statutory Credits

Developers must provide evidence to justify purchasing statutory biodiversity credits:

On-site constraints: Show why delivery of BNG is not possible on a site.

Off-site options: Document attempts to secure units away from the site from at least three suppliers or habitat banks or trading websites.

Exemptions for Small Requirements: If less than 0.25 biodiversity units are needed, a developer can buy statutory credits without providing evidence of approaching three suppliers as above: detailed evidence for off-site options is not required.

Statutory Credit pricing

Price list: Statutory credit prices are published and reviewed every six months.

Notification of changes: Developers will receive at least 10 weeks’ notice of price changes.

Separate from Private Market: Prices are not guidelines for off-site biodiversity units in the private market.

Special considerations

Phased developments

For developments completed in phases, the biodiversity gain plan must outline credit usage for the entire project. Future phases should reference prior credit purchases.

Transfer limitations

Credits are tied to specific planning permissions. Section 73 applications to vary permissions can include previous credit purchases.

Who sells Statutory Credits?

Natural England, on behalf of the Department for Environment, Food and Rural Affairs, sells statutory credits. The revenue gained supports habitat delivery and nature conservation projects under the Environment Act.

Further guidance for developers

Developers looking to buy or sell statutory biodiversity credits should:

Plan early: Use the biodiversity metric tool to calculate needs and estimate costs.

Consult experts: Work closely with the local authority to develop a robust BNG strategy that results in a net positive impact.

Understand biodiversity markets: Follow the required steps and provide detailed evidence when purchasing credits.

Statutory biodiversity credits ensure that even when other solutions fall short, development schemes still contribute to biodiversity conservation and are nature positive. By following the outlined process, developers can achieve compliance, reverse biodiversity losses and support meaningful conservation and restoration improvements for long term benefit.