Biodiversity Net Gain: Legal issues for farmers

Julie Robinson, Agriculture Partner at Roythornes Solicitors, explains why putting land into a biodiversity net gain project is not a walk in the park for farmers.

Following the Government’s announcement on 27 September, we now have confirmation that the new regime is set to be implemented in January 2024. With Biodiversity net gain (BNG) becoming a statutory requirement for most developments in England from that point, farmers may be wondering whether to create long-term biodiversity enhancement on their land to supply ‘biodiversity units’ to developers. On the face of it, it may seem like a tempting option, particularly in the light of the headline prices being reported for biodiversity units. But it is not for the faint-hearted, and there is a lot of groundwork to be done before additional net income is secured. 

BNG regime and developers

Under the mandatory regime, developers will need to deliver a minimum of 10% BNG before their developments can begin. That requirement will be imposed as a planning condition at the point planning permission is granted.

To discharge the planning condition, developers will need to have a ‘biodiversity gain plan’ approved by the local planning authority (LPA). It is this biodiversity gain plan that spells out how the BNG requirement will be met.

The plan will be supported by a calculation using the statutory biodiversity metric; prepared by an ecologist, this will show the level of biodiversity before the development (the baseline) and how the minimum 10% uplift in biodiversity will be achieved. This can be by on-site or off-site enhancement or a mix of the two, or - as a last resort - by the purchase of statutory biodiversity credits from Natural England. If the developer is using off-site habitat creation/enhancement, a detailed habitat management and monitoring plan will need to be submitted with the biodiversity gain plan. That is where the farmer providing that off-site BNG comes in.

Outline steps for a farmer

1. Before settling on your BNG land parcel, check local nature designations to see whether any of the farm is strategically located in terms of nature recovery. An early conversation with conservation bodies or the LPA may be useful.
2. Identify your BNG site. Check your registered title and any other constraints (see checklist below).
3. Engage an ecologist to carry out the baselining of the site and agree habitat creation/enhancements and the projected number of biodiversity units that will be delivered.
4. Create a formal habitat management and monitoring plan.
5. Secure the project, via a planning obligation (‘s106 agreement’) or a conservation covenant with a responsible body. Other legal agreements may also be needed.
6. Register your BNG site on the national biodiversity gain register and on any local register.
7. Find a purchaser for all or some of the biodiversity units.
8. The developer will then submit your habitat management and monitoring plan, details of your national site registration and biodiversity metric assessments to the LPA as part of their biodiversity gain plan submission.

The above steps may happen in a different order. For example, you may make contact, and design your project, with a developer earlier in the process. But whatever order, the developer cannot make use of the biodiversity units you sell them until the corresponding BNG site has been secured by a legal agreement and registered on the national biodiversity gain register.

Deliverability checklist

1. Who has legal title to the freehold? This may seem obvious but is important to check at the outset. Any planning obligation to secure the biodiversity enhancement will need to be signed up to by the freehold owner(s) of the land title, and, except in situations where someone has a long enough lease to commit to a 30-year biodiversity project will also be needed in a conservation covenant.
2. Is there a charge against the land to secure borrowing? If there is, your lender will need to be a party to the planning obligation or conservation covenant to give its consent. Contact them early.
3. Is anyone else in occupation? Again, an obvious point, but you will need to check that there is no-one with rights to occupy or use the site who could put the project at risk. That includes those with shooting or mineral extraction rights.
4. Are you already signed up to an environmental scheme? If so, you will need to ensure that the biodiversity enhancements do not conflict with, and are additional to, your environmental obligations under the scheme.
5. What are the risks to the project? For example, is there public access, with associated risks to newly emerging meadow or grass growth?
6. Decide when you are going to begin the habitat creation/enhancement. This is a key decision. You can wait until you have secured a buyer for your biodiversity units, saving on upfront speculative investment, or you can opt to begin the work ahead of selling – this may help achieve a better price for your units but will need financing.
7. Who is actually going to carry out the biodiversity enhancement work? If you are planning to use a third-party contractor, you should make sure there is an agreement in place with them and appropriate provisions to cover unsuccessful establishment (who will be liable for the costs of re-planting, for example?).
8. Who will be responsible for monitoring reports 20 years into the project? Clearly anyone buying or inheriting the legal title will be bound by the planning obligation/conservation covenant, but – in practical terms – do you know where you will be in 20 years’ time? If retired from the farming business, do you have a successor lined up and will they have access to funds to fulfil their obligations?
9. How are you going to ensure that the required management and monitoring/reporting will be done? This will be of interest to the LPA, and the developer who is paying you for the biodiversity units. You could set aside part of that payment (for example, in a secure account held by a third party) to give reassurance on this point; you may well be required to do this under any s106 agreement.p
10. Finally, you will want some assurance on the tax implications of the project. You should take specialist advice so that any downsides are accounted for.

Making your BNG offering stand out

• Consider partnering with a well-regarded broker or habitat developer who is familiar with your area – upcoming development, the LPA’s approach to BNG, opportunities to add value by connecting your project with other nature sites (a key value added).
• Use experienced and competent ecologists.
• Ensure that your BNG project is carried out in line with BS8683 (this is one of the questions in the draft template biodiversity gain plan published by NE).
• Invest time in understanding the implications and risks associated with the project (including generation change) so that you can allay any doubts about its deliverability.

If you have any questions about this article, or for more information about how we can assist, please do get in touch with Julie Robinson in our Agriculture team or Ben Arrowsmith in our Planning team.