A renewable energy investment outfit is already achieving biodiversity net gain as a result of the UK’s compliance scheme, but they’re now expecting a similar process across the European continent, according to the company’s chief investment officer.
London-based Next Energy Capital manages a number of investment funds that target investment in renewable energy infrastructure across the continent and now are stepping into the biodiversity investment space, having achieved biodiversity uplift on many of their UK solar farms.
“We are advocating for this to happen at a broader level in Europe,” Aldo Beolchini, chief investment officer at NextEnergy Capital, told Carbon Pulse on the sidelines of the EU Business and Nature Summit in Milan on Wednesday.
“In Italy, we have a number of other projects that play like us, we will do the same thing in any way, credit or not. But you cannot count on the few individuals that are doing [biodiversity net gain] for a mission. You need to create a systemic business [and] create incentives for all of these businesses.”
The investment boss said that the company’s UK’s projects are already achieving biodiversity uplift voluntarily through the country’s biodiversity net gain (BNG) mechanism.
BNG was recently delayed by the UK national government, although it has still been adopted by several local councils for planning permissions.
Solar farms often remove land from agricultural production and can create improved grassland habitats underneath the panels. However, it’s not a given that solar farms inherently achieve the 10% biodiversity uplift needed under BNG rules.
The EU’s flagship common agricultural policy looked for more ways to pay for biodiversity, according to Beolchini, but he said the policy lacked the political will for implementation.
In June, the EU Council added an exception for renewable energy and defence for their contribution to bring 20% of the EU’s land and sea into restoration management by 2030 under the EU’s Nature Restoration Law. The Council passed the responsibility to member states to determine how they restrict applications for projects and interpret these exemptions for their own national context under national restoration plans.
Investment firms like Next Energy are now hedging their bets on biodiversity as an opportunity. They expect the value of biodiversity to bear fruit in the coming years, but there is currently a lack of clarity on nature’s price for investors to achieve a return, according to Beolchini.
The investment director told Carbon Pulse that he has also spun out his own forestry business to capitalise on the future market for biodiversity uplift in woodland habitats.
At a panel event at the conference, Beolchini said he would like to see a level playing field for all businesses in his space, but that this would require government regulation to be up to scratch.
“You’re going to be able then to move from voluntary market one day to more structured markets, where businesses need to account for their net gain,” he told Carbon Pulse.
“I hope one day that businesses will have to demonstrate whatever their activity they are not consuming nature, but are nature positive.”
By Tom Woolnough and Tom Cox – tom@carbon-pulse.com
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