Biodiversity Net Gain in England: Who Decides When Habitat Becomes a Planning Condition

The instrument, not the slogan

Biodiversity Net Gain (BNG) in England is often described as a market in nature. The statutory record is more specific, and more useful. BNG is a condition of planning permission: developers of sites requiring planning permission must deliver a 10% net gain in biodiversity, measured by a statutory metric, under Schedule 7A of the Town and Country Planning Act 1990 as inserted by Schedule 14 of the Environment Act 2021. For nationally significant infrastructure projects, the equivalent sits in Schedule 2A of the Planning Act 2008, inserted by Schedule 15 of the same Act (Defra BNG guidance collection).

That architecture matters because it tells you where decisions are actually made. A developer does not simply buy nature. A developer must first avoid or mitigate habitat loss on site; if that is not possible, buy biodiversity units from third parties such as habitat banks; and only if suitable off-site units are unavailable, buy statutory biodiversity credits from government (Defra statutory credits annual report 2024 to 2025). The hierarchy is a decision pathway, and each step allocates costs and risks differently.

What Part 6 of the Environment Act 2021 actually creates

Three provisions in Part 6 do most of the work.

Section 98 makes biodiversity gain a condition of planning permission in England through Schedule 14. The legislation.gov.uk page records commencement for specified purposes on 3 November 2023 (S.I. 2023/1170), 12 February 2024 (S.I. 2024/44), and 1 May 2025 (S.I. 2025/447) (Environment Act 2021, Part 6).

Section 100 provides for a biodiversity gain site register. A biodiversity gain site is land where a person is required under a conservation covenant or planning obligation to carry out habitat enhancement works, and that or another person must maintain the enhancement for at least 30 years after completion. Regulations under the section must make register information accessible to the public. The Secretary of State must also keep under review whether the 30-year period can be increased without adversely affecting the supply of land for registration.

Section 101 allows the Secretary of State to make arrangements for developers to purchase statutory biodiversity credits to meet the gain objective. In setting the amount payable, the Secretary of State must have regard to the need not to discourage registration of land in the gain sites register. Section 101(8) requires annual public reporting on payments received, how they were used, and the projected biodiversity value of funded habitat enhancement.

Read together, these provisions distribute authority: developers choose between on-site, off-site and statutory routes; local planning authorities condition and enforce; Natural England sells credits on behalf of the Secretary of State; and the Secretary of State sets prices and must publish annual reports. The power asymmetry is built into the statute, not added later.

The first-year credit report is the accountability document

The first statutory credits annual report covers 12 February 2024 to 11 February 2025. It records total payments of £206,180. It states that the level of receipts is relatively low due to the early stage of the policy’s implementation, and that this also suggests BNG is operating as expected, with statutory credits being used for their intended purpose as a backstop for the market.

The same report states that Natural England has not yet spent income from the sale of statutory credits on habitat creation or enhancement because income has not reached a high enough level for efficient large-scale investment. It expects to spend around £300,000 of credits revenue in financial year 24/25 on administering sales, including processing sales and answering queries.

Those two figures sit awkwardly together, and the awkwardness is the story. In the first year, expected administration spending exceeds total receipts. That is not proof of failure. It is a structural feature of a backstop deliberately priced so it does not undercut the off-site market, combined with the fixed cost of standing up a new sales function. But it does mean that anyone claiming BNG is already delivering habitat through the statutory route is claiming more than the published account shows. The report itself says the money has not yet been spent on habitat works.

Who gains, who loses, who decides

The documents name the roles but do not measure the distribution. That distinction should be kept sharp.

Who decides. The developer decides which route to use, subject to the mitigation hierarchy and to local planning authority scrutiny of the biodiversity gain plan. The Secretary of State decides credit prices, constrained by the statutory duty not to discourage land registration. Local planning authorities decide whether to grant permission and what conditions to attach. Natural England administers credit sales.

Who gains. Land managers who register gain sites can sell biodiversity units, subject to a 30-year maintenance obligation. Developers gain a compliance route that lets schemes proceed. The public gains a register that must be accessible, and an annual report that must be published.

Who bears risk. The 30-year maintenance floor shifts long-term stewardship onto gain-site landowners and covenant or obligation holders. Communities near development sites bear the immediate habitat loss; whether they receive proximate compensation depends on where off-site units are located, which the retrieved sources do not establish. That is a question the register is designed to answer, not a finding this article can assert.

The commencement discrepancy worth reconciling

The legislation.gov.uk page records section 99, on biodiversity gain in nationally significant infrastructure projects, as in force at 7 May 2026 by S.I. 2026/492, reg. 2(a). The Defra collection states that BNG will be mandatory for NSIPs from 2 November 2026. These are different dates attached to related but not identical propositions: commencement of the enabling power versus the date from which the requirement bites for development consent applications. A reader reconstructing the decision pathway should treat this as a document-reconciliation task and check the commencement regulations and the NSIP biodiversity gain statements directly, rather than assuming either date settles the other.

What a case-based investigation should ask next

The statute enables a more concrete line of inquiry than the commodification debate usually allows. Three questions follow directly from the primary documents.

First, which developments used statutory credits rather than off-site units, and why? The credit report gives monthly sales totals but not the identity or location of purchasing developments. Planning authorities hold biodiversity gain plans. Reconstructing even one decision pathway from a named application would show whether the hierarchy was applied or stepped around.

Second, where are registered gain sites, and are they near the communities absorbing habitat loss? Section 100(3) requires public accessibility of register information. If off-site gains cluster where land is cheap rather than where ecological harm occurs, the register will show it. The retrieved sources do not contain register contents, so this remains an evidence gap, not a conclusion.

Third, is the 30-year maintenance obligation being monitored? No retrieved source establishes monitoring performance either way. The obligation is real in law; whether it is real in practice is an empirical question for local authority enforcement records and Natural England oversight.

Why the line-item framing undersells the problem

Calling BNG a developer’s line item is rhetorically satisfying and analytically thin. The more consequential finding is that the regime creates a layered decision structure in which the cheapest compliant route tends to win, and the statutory backstop is priced to lose gracefully. The first-year accounts show a backstop that has collected £206,180 and spent nothing yet on habitat, while budgeting more on administration than it received. That is a fact about institutional design, not a scandal. But it is exactly the kind of fact that gets lost when the argument stays at the level of metaphor.

The evidence supports a narrower and stronger claim: England has built a mandatory offsetting regime with a public register, a 30-year stewardship floor, and an annual reporting duty, and in its first year the statutory route functioned as a small backstop whose administrative costs outpaced its habitat spending. Who gains, who loses, and who decides can be traced through the statute and the accounts. Whether the outcomes are ecologically adequate is a separate question that the published record does not yet answer.

FAQ

Is Biodiversity Net Gain mandatory in England?

Yes, for developers of sites that need planning permission, under Schedule 7A of the Town and Country Planning Act 1990 as inserted by Schedule 14 of the Environment Act 2021. The requirement is a 10% net gain, measured by the statutory biodiversity metric. For nationally significant infrastructure projects, the equivalent provision is Schedule 2A of the Planning Act 2008.

What are statutory biodiversity credits?

They are a government-sold backstop under section 101 of the Environment Act 2021, available when a developer cannot meet the gain objective through on-site measures or off-site units. The Secretary of State must set prices with regard to not discouraging land registration, and must publish annual reports on receipts, expenditure, and projected biodiversity value.

How long must a biodiversity gain site be maintained?

At least 30 years after completion of the enhancement works, under section 100(2)(b). The Secretary of State must keep under review whether that period can be increased without adversely affecting land supply.

How much did statutory credits raise in the first year?

£206,180 between 12 February 2024 and 11 February 2025, according to the first statutory credits annual report. The report states that Natural England had not yet spent credit income on habitat creation because revenue had not reached a level for efficient large-scale investment.