Biodiversity Net Gain and nationally significant infrastructure projects

The Environment Act 2021 (Act) was given Royal Assent on 9 November 2021. The Act, heralded as world-leading, contains provisions for the protection and improvement of the environment, including in relation to air quality, water, biodiversity and conservation covenants. This applies with particular force to infrastructure projects where impacts – and land required benefits – can be extensive.

Biodiversity Net Gain in planning

An area of significant interest in the build up to Royal Assent was the introduction of the requirement for biodiversity net gain (BNG) in planning. Few will have missed the well-publicised development of the BNG proposals as the Bill passed between the Commons and the Lords. However, the position as crystalised in the Act, and currently the subject of ongoing consultation, benefits from a closer examination.

Initially, it was envisaged that the requirement for BNG would be limited to applications under the Town and Country Planning Act 1990 (1990 Act). The rather protracted passage of the bill enabled policy in relation to infrastructure projects to catch up with other developments. Consequently, an amendment to the Environment Bill in June 2021 extended the scope to include applications in respect of nationally significant infrastructure projects (NSIPs) under the Planning Act 2008 (2008 Act). The result is a wide-ranging BNG regime, with separate mechanisms for 1990 Act applications and 2008 Act applications. While this Article focuses on the BNG regime as it applies to NSIPs, a further article exploring BNG for developments under the 1990 Act will follow.

Under the Act, amendments to the 2008 Act provide that the Secretary of State may not grant an application for a development consent order (DCO) for an NSIP development where a “biodiversity gain statement” applies unless satisfied that the “biodiversity gain objective” is met. To understand what this means in practice, we need to understand the meaning of these phrases.

Biodiversity Gain Objective

The biodiversity gain objective is that the biodiversity value attributable to the development in question must exceed the pre-development value by at least 10%. This post-development biodiversity value may comprise onsite habitat, any offsite biodiversity gain and any biodiversity credits purchased for the development. As the name implies, the effect has to be “net” – gain is offset against harm to biodiversity, meaning the increase in biodiversity achieved can be in excess of 10%.

Biodiversity Gain Statement

All applications for a DCO in relation to an NSIP have to be decided in accordance with a National Policy Statement (NPS) if there is one in force. A new Schedule to the 2008 Act provides that, on the first review of a NPS setting out the planning policies applicable to that type of infrastructure, the government must include a biodiversity gain statement. Where a category of development does not have an associated NPS, or the relevant NPS does not yet provide for BNG, the government may (subject to consultation) issue a separate biodiversity gain statement. The biodiversity gain statement sets out the biodiversity gain objective and requires that this objective it is met by applications for DCO development in England. Once issued, the biodiversity gain statement will apply and any application for a DCO must be determined in accordance with the statement expressed in the NPS or separately.

In addition to setting the biodiversity gain objective, biodiversity gain statements may specify:

• requirements to be included in a DCO to counter any adverse impacts of development on onsite habitat; and
• the evidence required in a DCO application to demonstrate that the biodiversity gain objective has been met.

The biodiversity gain statement will set out the biodiversity value calculation, by reference to a biodiversity metric to be published by the government. While not specified in the Act, it is likely that the Biodiversity Metric 3.0, published by Natural England in July 2021, will fulfil this role at least at first, subject to any necessary amendments to account for its application to NSIPs.

BNG requirements

The government intends that the BNG requirement should apply across all terrestrial infrastructure projects, or terrestrial components of projects, accepted for examination by the Planning Inspectorate through the NSIP regime by November 2025. Projects accepted for examination before the specified commencement date would not be required to deliver mandatory biodiversity net gain (though they might deliver it in response to policy or voluntary commitments).

While these provisions are not yet in force, they warrant consideration ahead of time to ensure any impact on viability caused by BNG requirements can be accommodated in future development proposals. At present, developers can expect that even where the Act is not in force, examining authorities will still ask searching questions about biodiversity net gain – the new regime presents a template for responding to such questions.

If you have any questions about the potential implications of the biodiversity net gain regime for your business, please contact Henry Jeffreys, an associate in our Planning and Land Use team / Infrastructure, Construction and Transport Sector.