The UK government is selling its first batch of statutory biodiversity credits under the biodiversity net gain (BNG) scheme to a developer for an estimated total of £35,120.

One developer is buying 0.7 units of the biodiversity credits in the ‘A1’ tier for low-medium distinctiveness (£29,400), and 0.13 units in the ‘H’ hedgerow tier (£5,720), said Angus Walker, partner at London-based law firm BDB Pitmans.

“We can confirm there has been one accepted sales credits application, for 0.7 ‘A1’ tier credit and 0.13 ‘H’ tier credit,” said Natural England in response to a Freedom of Information (FOI) request from Carbon Pulse.

The government has not confirmed the value of the credits sold under the accepted application. The figures have been calculated from the government’s prices page.

The environmental department said it could not reveal the details of the buyer due to confidentiality issues.

Developers in England have had to plan to boost biodiversity by 10% since February. Most have done so through off-site or off-site gains following the legislation’s order of priority of actions.

No developers had previously successfully applied to buy the most expensive last-resort biodiversity credit option.

The prices for these credits range from £42,000 per unit for grassland up to £650,000 for lakes, depending on their distinctiveness.

THREE APPLICATIONS

Between February and the beginning of August there were just three applications for statutory biodiversity credits, Walker said.

“Of these, one was rejected. One has been accepted. One is still being processed but will be accepted if/when payment is received,” Walker added.

The in-process application was for 0.46 units of the ‘W’ tier for streams. Under the government’s prices, this purchase would cost the developer £106,007.

Walker said the results show there has not been much demand for statutory credits yet.

“There isn’t supposed to be much demand, as they are a last resort. I think the lack of demand is more that not very many projects have got this far, than they are all going for on-site and off-site units,” said Walker.

Demand for BNG has been slow to take off, with 40 key challenges raised this month in one report.

Nevertheless, demand for statutory biodiversity credits is likely to increase, especially while there are few off-site unit options on the government’s register, said Walker.

The BNG register has only listed a handful of projects so far, but it will list another 16 sites from project developer Environment Bank on its website over the next month.

NO PROJECTS UNDER DEVELOPMENT

The money raised from the credits has not yet been allocated to any particular conservation projects – one of the key criticisms of the scheme – though the law requires that it should be spent on biodiversity enhancements, said Walker.

“The Department for Environment, Food and Rural Affairs (Defra) will consider the level of income that we receive from credit sales, and the habitats that are required, and will invest accordingly,” the government told Carbon Pulse.

“Natural England is not currently developing any projects dedicated to statutory biodiversity credits.”

Last month, the Green Finance Institute (GFI) said a medium-priority issue was providing greater clarity on the statutory biodiversity credit scheme’s use of funds.

Defra is required to report on how it has spent its income from the sale of statutory biodiversity credits, in February 2025, GFI said.

“However, there is no provision within the Environment Act that compels government to reinvest the money within a particular timeframe,” the organisation added.

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

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