Clients: Lifescape & Wildlife and Countryside Link, The Wildlife Trusts
Year: 2025
eftec team: Ian Dickie, Ally Couchman, Angus Beattie and Ece Ozdemiroglu
Service Area: Policy design and advisory
Location: England
Full reports:
BNG in Small Developments, commissioned by the Lifescape Project & Wildlife and Countryside Link
A well-functioning BNG market, commissioned by the Wildlife Trusts:
Labour housing plans could destroy 215,000 hectares of nature in England, The Guardian
In February 2024, Biodiversity Net Gain (BNG) was launched to compensate for losses from development and restore biodiversity in England. The policy requires developments to have a net positive (at least 10%) effect on biodiversity by enhancing biodiversity on or off the damaged site.
These two projects analysed the data from the first year of BNG operation to provide evidence for the government’s consultation on the subject. We used planning application data provided by The Planning Portal and interpreted the data based on our original BNG model for Defra and the expectations on how a well-functioning BNG market should work.
Both projects established that with stricter implementation and further resources from Government, misuse of exemptions would reduce and lead to improved biodiversity as well as economic gains.
The first project was on the treatment of ‘small sites’ in the first year of the BNG market. We analysed the distribution of BNG demand and exemptions in different application site sizes to demonstrate how BNG is being currently implemented (the Business-as-Usual scenario). The research found:
86% of planning applications claimed they were exempt from BNG (far above the expected amount);
56% of all applications for exemption claimed a de minimis exemption, which applies when a planned development has an insignificant impact on any natural habitats; and
~30% of applications for large developments (over 1 hectare) claimed this de minimus exemption. This again is far above the credible proportion of applications that could claim this exemption.
The analysis demonstrated the widespread misuse, either intentional or otherwise, of the ‘de minimis’ exemption by large developers. One of the proposals the UK government consulted on was to make all sites smaller than 1 hectare exempt from BNG. Our analysis shows that this would mean 97% of applications in England would be exempt, rendering the market unnecessary and missing out on the chance of providing compensation worth £250 million a year. However, it is possible to make the system more efficient by limiting the exemptions to much smaller (up to 0.1 hectare) sites, which would result in reduced costs to small developments.
In the second study, we explored what a well-functioning BNG market may look like and whether current and future (up to 2028) supply could meet demand in the Business-As-Usual (BAU) and well-functioning market scenarios from the Lifescape project. We found that
In the BAU model, supply of Biodiversity Units is more than enough to meet demand nationally beyond 2026, except for in London, where spatial constraints affect the market. The well-functioning market mimics this trend, with scarcity becoming more widespread in other regions from 2027.
The potential future scarcity is based on currently available supply data from only a portion of the market. If there is market confidence, future supply will likely enter the market to address this scarcity. Market confidence is achieved through better implementation and enforcement of exemptions, which policy certainty and improved local government resourcing can provide.
Habitat creation and enhancement needed to meet development demand contributed £135 million in economic output and 1,300 jobs to the economy annually in the BAU scenario. This has the potential to increase to £250 million and 2,450 full time jobs, respectively, in a well-functioning market.