An English farm has committed almost all of its biodiversity net gain (BNG) units in sales to local housing developers, Carbon Pulse has learned.

The Iford Estate farm in the South Downs National Park has confirmed sales for most of its 211 BNG units over 32 hectares of grass and scrubland, according to the estate.

“A good proportion of [the units] are committed, or nearly committed. Enquiries are coming in fairly regularly … We’re selling out,” said Ben Taylor, estate manager at the company.

“We’ve been selling for about 12 months. Initially in a fairly small way, the demand is ramping up,” he told Carbon Pulse.

The UK’s BNG mechanism was slated to become mandatory this year, but the government announced that it will be delayed until Jan. 2024.

Under the rules, development projects need to achieve a net improvement of 10% biodiversity through purchasing units from offsite land managers, onsite improvements, or using the government’s statutory credit mechanism as a backstop.

HUNDREDS OF HECTARES

The estate has plans to expand its BNG programme to 3,000 units and over 800 ha in total.

The process of developing the credits at Iford Estate began in 2020. Drawing up management plans, baselining, landscape appraisals, and hydrology reports, have taken time, but “we’ve done it now, so we’re able to sell”, Taylor said.

Selling each unit to a developer can take around a year from enquiry to completion, he said.

Although the BNG rules are not yet mandatory, most of the local authorities in the Sussex area are already looking for building developments to show overall biodiversity improvements, he said.

UNITS AND CREDITS

Taylor was unable to share the total value of BNG unit sales, saying the price for each one varies.

The prices for statutory biodiversity credits range from £42,000 for grassland activities up to £650,000 for lakes, though being a ‘last resort’ option for developers, they are more expensive than units.

Iford Estate is considering generating credits, alongside BNG units, though it has not yet produced any. Credits can be bought by developers, towards their 10% gain as a backstop, should units not be viable.

Although unit sales are happening, Natural England will not register them until January so it has no transaction data, a spokesperson told Carbon Pulse. The public body will begin to sell credits that same month, as BNG launches.

EARLY BIRD

Part of the attraction for the Iford Estate in investing in BNG is the early-bird benefits, with the units to increase in value over time, according to a report by Natural England on the farm.

This is due to the “temporal multiplier” in Natural England biodiversity metric 4.0 for measuring improvements.

“The habitat will have had additional time to establish, and there is clear delivery of the habitat rather than just an action plan to do so,” the public body said.

“For example, starting with ‘poor’ grassland and then selling some biodiversity units once they reach ‘moderate’ condition … means the same investment is worth more the later it is cashed in.”

Iford Estate invested early in beginning the habitat enhancement process before selling the units in a process called ‘habitat banking’.

“This is a clear benefit for the early movers,” Taylor said.

A SCRUBBY MOSAIC

The BNG metric has defined which habitats are most profitable for land owners to pursue given their local conditions.

“We’re always asked why we’re not delivering chalk grassland. The answer is the metric rightly disincentivises this habitat because it is so hard to deliver. We’re looking at what will really work in this landscape,” said Taylor.

Anthony Weston, technical lead for the Iford Estate biodiversity project, said tree-planting “rightly doesn’t work in the metric because of how long trees take to grow”.

“Instead, we’re looking at scrubby mosaic, with the idea that some of this may become open woodland further down the line,” Weston said. Patches of scrub in habitats like grassland are described as a ‘mosaic’.

STILL A FARM

BNG has catalysed a new approach to the land management principles at Iford Estate, Weston said.

“It has prompted a whole different way of thinking.”

The estate is still farming alongside its BNG projects. Having allocated the best-quality land to arable farming, it will also graze animals on other land in “a very low intensity way, and with the environment as the focus, not the livestock”, Taylor said.

“As the agricultural side of things becomes more marginal, the hope is that BNG will fill the void of demand,” Taylor added.

The UK government is replacing traditional agricultural subsidies with payments for nature improvements.

By Thomas Cox – t.cox@carbon-pulse.com

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