Local authorities could expose developers to exploitation from landowners, with worse outcomes for nature and housing, if they force the purchase of nature offsets nearby rather than sourcing them from more distant areas under England’s biodiversity net gain (BNG) legislation, an expert has said.
Local Planning Authorities (LPAs) may be able to reject applications from developers to buy off-site BNG units that are not local, following government responses, said Jack Potter, head of BNG and nutrient neutrality at project developer Wild Capital.
“When the local authorities create policies which back developers into corners, where they have to pay potentially unreasonable costs, or they have no control of those costs because there’s such a limited pool of suppliers that can supply them with the units … it’s commercial ransom,” Potter told Carbon Pulse.
Limiting the purchase of off-site units to local areas could reduce the supply to a small number of landowners, triggering large unit cost increases, said Potter. In turn, this could lead to housebuilding delays and a dampening of demand for conservation initiatives.
Under the BNG legislation, developers must increase biodiversity by at least 10%. One unit represents the biodiversity value of habitat in an area dependent on its size, quality, location, and habitat type.
BIG IMPLICATIONS
A few LPAs who imposed net gain rules before BNG came into force, under separate legislation, have said developers will have to purchase off-site units locally, according to Potter.
For them, this would mark a continuation of their stance before BNG came into force, but would go against the grain of the intent of the legislation of creating nature markets, he said.
“It has quite big implications on how liquid and efficient the market can become,” he said. The government has not yet issued a clear decision on the topic, he stressed.
In response to a question from Wild Capital, the government’s nature agency Natural England said LPAs should seek legal advice on whether they could enforce a requirement for local delivery of off-site units, while the housing and local government department said the outcome would depend upon the case.
One of the first biodiversity gain plans to emerge has proposed purchasing off-site BNG units from a project about 220 miles away after struggling to find anything closer, Carbon Pulse reported last week.
FLURRY OF ACTIVITY
Wild Capital has seen a spike in enquiries recently for its BNG projects in England as more developers seek to push ahead with planning permission proposals.
“We’re absolutely rushed off our feet. We’re anticipating that we’re at the base of a very steep curve of demand. There’s going to be a flurry of activity, probably quite soon, where small sites go through the system much quicker,” said Potter.
“For the larger developments, we’re anticipating it’s going to be quite a while before they need to actually put money down and reserve them.”
The national BNG register has only published nine sites so far, most of which are in Southern England. Not enough sites with legal agreements have been published on the register due to local authority delays.
Wild Capital is now ditching the legal agreements with local authorities in favour of quicker and more certain legal agreements with other responsible bodies such as public bodies or charities, Potter said.
Market participants have expressed diverging perspectives on demand prospects for BNG over the last few months, with one manager of a large conservation project saying selling their units could take up to a decade, if they trade at all, while Environment Bank said it was on track to meet its unit target sales this year.
On Tuesday, the UK government published a blog on three BNG lessons learned with LPAs:
- Being strategic on delivering benefits for nature
- Sharing good practice
- Knowing the difference between need-to-do and nice-to-do
The same day, the government updated the BNG metric, following user feedback, with a version history of each document in a bid to improve transparency. Minor updates will be completed on a quarterly basis, it said.
By Thomas Cox – t.cox@carbon-pulse.com
*** Click here to sign up to our twice-weekly biodiversity newsletter ***
