An update on Biodiversity Net Gain (BNG) since it became mandatory a year ago
The month of February 2025, which marks a year since Biodiversity Net Gain (BNG) became mandatory in England for major developments, has been a mixed bag of views and opinions about the future of this legislation. Most recently it was reported that the government were questioning the scheme, but news then followed that more than forty housebuilders, investment firms, and environmental groups have reaffirmed their commitment to the initiative by signing an open letter calling on the government to champion BNG. The letter, which stresses the vital role that BNG plays in ensuring “nature recovery, growth, and sustainable investment can thrive together,” has been signed by major players, including Barratt Redrow, Bellway, Related Argent and the UK Green Building Council. It also outlines that BNG should serve as a model for green investment in the future and that it is an essential component in allowing private finance to support funding for nature and achieving 2030 targets.
So, for the moment, the BNG industry can feel encouraged and plough on with creating new habitat banks across the country, selling BNG credits and developing reliable biodiversity metric tools, all with the promise of a brighter, more sustainable future.
At Kingwell, we are continuing to receive enquiries about our Keyhaven Natural Capital Scheme. The scheme is the first in the New Forest and demonstrates a unique partnership with a local authority, a national park authority, and a leading wildlife trust. Keyhaven Natural Capital Scheme is a unique model we hope to replicate in other regions. We have also received approval for our habitat management and monitoring plan (HMMP) for the Keyhaven site, which is an important milestone.
Where is the market after one year?
According to a study commissioned by Defra and taking information from the National Audit Office, BNG was initially expected to establish a BU market of between £135m - £274m annually, with 50% of the 4300-hectare habitat delivered annually coming from off-site projects.
After nine months of going live, Defra revealed in their blog released in November 2024 that 19 sites were registered for off site, totalling 554 hectares. This figure has now increased. Angus Walker, who specialises in the planning and authorisation of nationally significant infrastructure projects, reported in his LinkedIn post (19th February) that there are now 45 registered sites and that the number of allocations of developments to sites is increasing.
This is positive news for BNG providers like us, but there are undeniably reasons why the government strategy is underperforming, which has been highlighted by organisations such as the Office for Environmental Protection, including:
On-site BNG prioritisation does not support the establishment of off-site schemes
Exemptions mean development falls outside of scope. According to the Planning Portal data, ‘de minimis’ exception accounted for 75 per cent of exemptions between July and December 2024
Little to no enforcement
Lack of resources from Local Planning Authority departments (LPAs)
Another observation from the market after one year is that price is everything. Developers are not driven by habitat quality, but understandably by the cheapest units available and readily available habitats that are registered and can deliver all their biodiversity needs.
The future of BNG
As BNG enters its second year, much of the education and competency within the industry has been done. Developers, landowners, solicitors and local authorities are resourcing and improving systems. There are more innovations emerging to support participants and improved familiarity with the technical aspects, such as spatial and temporal risk multipliers. As BNG progresses, there will also hopefully be more transparency about the cost of BNG units and that added-value activities such as project management and marketing are genuine, reinforce an ethos of higher integrity and build confidence in the market.
If you are seeking advice about BNG, please get in contact.