Statutory biodiversity credits

Overview 

Guidance on statutory biodiversity credits may be relevant to you if you are a: 

• developer 
• local planning authority (LPA) 

Buying statutory credits means that as well as, or instead of, creating and enhancing biodiversity on or off a development site, developers can make a financial contribution which counts towards their mandatory 10% BNG. . This contribution will be used to fund biodiversity enhancements across England.  

Prices are based on the cost to create, maintain and monitor different habitat types. There is also a mark-up to prevent statutory credit prices undercutting the off-site market.

Buying statutory credits is a last resort option for developers who are unable to use on-site or off-site units to deliver biodiversity net gain (BNG).  .

Developers buy statutory credits using the credit sales service. There is no minimum or maximum purchase for statutory credits. credits. You can buy fractions of a credit, if it is rounded to 2 decimal places. For example, 0.5 credits, or 3.76 credits.

Before developers buy statutory credits, they can estimate how much they will cost. 

When developers use the statutory biodiversity metric tool, it will tell them if they need to make bespoke BNG compensation, if they are building on some types of habitat. Developers cannot buyuse statutory biodiversity credits if they are required to make bespoke compensation. LPAs will advise developers on bespoke compensation where appropriate. 

Ways to achieve BNG: on-site units, off-site units and statutory biodiversity credits  

Through site selection and layout, developers should avoid or reduce any impact on biodiversity. They must deliver 10% BNG, as measured by the statutory biodiversity metric.  

There are 3 ways a developer can achieve 10% BNG.  

1. Enhance and restore biodiversity on-site (within the red line boundary of a development site).  

2. If developers can only achieve part of their BNG on-site, they can deliver through a mixture of on-site and off-site. Developers can either make off-site biodiversity gains on their own land outside the development site, or buy off-site biodiversity units on the market.   

3. If developers cannot achieve on-site or off-site biodiversity net gain, they must buy statutory biodiversity credits. This must be a last resort.  

Developers can combine all 3 options, but must follow the steps in order. This order of steps is called the biodiversity gain hierarchy. 

Statutory biodiversity credits are different from off-site biodiversity units sold in the off-site private market. Statutory credits are a last resort way of acquiring biodiversity units needed to achieve BNG. If developers buy statutory credits, this is because it is not possible to restore habitats on-site or by buying off-site units. Developers can buy statutory credits to add to on-site and off-site biodiversity units, to meet their total BNG. Statutory credits can also fulfil a developer’s entire BNG if both on and off-site options are not possible. Developers wanting to buy statutory credits must prove why they cannot meet BNG using on-site and off-site options. 

When to buy statutory biodiversity credits: the process to follow credits

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   How ofto anybuy statutory biodiversity credits needed. 

   credits 

   1. AsCheck soon as the developercost identifiesof a need for statutory credits,biodiversity they should discuss any need for statutory credits withinto theirwork overallout strategythe withtotal their LPA.  cost.

   2. TheYou developershould mustcontact prove to the LPA thatto theydiscuss needbuying tostatutory buybiodiversity statutorycredits credits.  as part of your overall BNG strategy.

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   4. OnceApply theto developerpurchase iscredits. satisfiedIt they can dischargetake (fulfil)up allto other8 pre-commencementweeks planningto conditions,approve theyyour can buy statutory credits. The purchase should happen as late as possible in the planning process. application.

   5. DueIf diligenceyour checksapplication willis beapproved, carriedyou outwill andreceive thenan the invoice willfor be sent to the developer.total Onceprice the developer pays, they will receive a combined proof of purchasecredits. 

   6. Pay andfor VATthe receipt.credits.  

   7. Submit Theyour developer needs to provide this proof of purchase with theirthe biodiversity gain plan.  They must also submit to the LPA a biodiversity metric calculation that shows how they will meet their mandatory BNG. plan.

   How to find out the type and number of statutory biodiversity credits needed 

   Developers mustneed to use the statutory biodiversity metric calculation tool to provecalculate the accurate calculation of the number of statutory credits they need.      You should agree this number with the LPA.

   The number of statutory credits for a specific development depends on the number of biodiversity units a development will need to meet its 10% BNG.

   When Once you havecomplete completed your statutory biodiversity metric calculationcalculation, (on-sitethe beforemetric andtool afterwill development,automatically andcalculate off-sitethe beforeremaining andunits afteryou development),need theto statutoryfulfil biodiversitythe metricBNG requirement.  

   Your calculation toolmust willinclude automaticallythe calculatebiodiversity value before and after the remainingdevelopment unitsis neededcomplete. toThis fulfilis yourfor BNGboth requirement.    on-site and off-site.

   The metric tool’s ‘unit shortfall summary’ tab shows you how many statutory credits of each tier you need to purchase and how this ‘unit shortfall’ was calculated. There is also detailed guidance in the statutory biodiversity metric tool’s user guide. guide. 

   Notes on statutory credit terms in the statutory biodiversity metric tool 

   Tiers 

   Statutory credits are priced in tiers. Different habitats are grouped in tiers to reflect the cost and value of different habitats.  

   Tiers ‘A1’ to ‘A5’ refer to area habitats, tier ‘H’ refers to hedgerow, and ‘W’ to watercourse habitats. The ‘habitat deficitunit shortfall summary’ tab in the metric tool automatically sorts your habitat deficit into the right pricing tiers.     

   The spatial risk multiplier 

   If you buy statutory biodiversity credits, a ‘spatial risk multiplier’ (SRM) will apply,apply. whichThis means that a credit is worth 0.5 biodiversity units, so you mustwill buy 2 statutory credits for every 1 biodiversity unitunit. you need to compensate for. The statutory biodiversity metric tool will automaticallyapply calculatethe thisSRM multiplication for you,you inon the ‘unit shortfall’shortfall summary’ tab. 

   TheOne credit is worth 0.5 units. Applying the SRM appliesmeans tothat statutory credits are treated the same as off-site biodiversity units from a different local authority to ensurea theydevelopment.   

   This is so that credits do not compete with the development of the off-site market and(including remainsales aacross lastdifferent resort. local authorities). 

   There is more information about the SRM in the statutorythe metric biodiversity metric tool’s user guide.  guide.  

   What information developers need from the metric tool to estimate the total cost of statutory credits or buy statutory credits 

   DevelopersBased willon need the information fromyou theenter habitat deficit summary in the metric tooltool, tothe work‘unit outshortfall thesummary numbertab’ ofwill statutoryshow how many credits theyyou need andto frompurchase whichat tier.   each tier. 

   ToDevelopers can estimate the total cost of the statutory biodiversity credits theyto willwork need,out orthe tototal buycost credits,of developersstatutory willbiodiversity credits they need. They need to enter the number of area (A1 to A5), hedgerow (H) and watercourse (W) credits from the metric tool’s ‘unit shortfall’ column (column D), to 2 decimal places, for example 3.87.    3.87.

   How to prove statutory credits are needed

   BeforeThe the LPA approves a developer’s use of statutory credits, the developer will need to showinclude the LPA both of the following piecesin oftheir evidence.   gain plan:

   1. TheEvidence developerthat hasthey considered additional on-site on-site BNG and andthe canreasons provide reasoning showing why this is not possible.  possible.  

   2. TheEvidence developerthat hasthe developer approached 3 local or national suppliers, habitat banks or trading websites and can show evidence that noinsufficient off-site options are available in England. EvidenceFor would include, for example, correspondence,correspondence emails,emails or a PDF download showing a marketplace search. search.

   Evidence for small numbers of statutory credits   

   If a developer needs less than 0.25 biodiversity units (area or linear), they can buy statutory credits without following step 2 above (showing evidence that noinsufficient off-site options are available).  They still need to follow step 1 (showing evidence that on-site BNG is not possible). available).

   Statutory biodiversity credit prices 

   There is a price list.  

   Prices will be reviewed every 6 monthsmonths. after BNG becomes mandatory. We will announce any planned price changes in the price list guidance, giving at least 10 weeks’ notice. 

   Statutory credit prices are not guideline prices for off-site biodiversity units.  

   Phased planning applications  development 

   Statutory biodiversity credits canare be purchased as a last resort to meet the the BNG requirement requirement for a phased development.  development.  

   The proposed use of credits must be included in the biodiversity gain plan,plan which must beinclude submittedinformation beforeabout anythe developmentproposed starts. use Developers should include confirmation of anycredits creditfor purchases in the phasedoverall biodiversitydevelopment. Any gain planplans for eachfuture phase. phases Guidancemust oninclude phaseddetails biodiversityof gainprevious planscredit will be available soon. purchases.

   Transfers 

   Statutory biodiversity credits are linkedpurchased tofor thea specific planning referencepermission. numberYou andcannot biodiversitytransfer gainthem plan they are purchased for. They are non-transferable to othera planningdifferent permissions or gain plans.   permission.

   If ayou developermake sells land with a planningsection permission73 andapplication approvedto biodiversityvary gaina planplanning andpermission, theyyou havecan purchasedcount statutoryprevious creditscredit forpurchases it,from the neworiginal ownerpermission maytowards be able to benefit from the statutorynew credits,permission.

   Find ifout theymore wishabout tosection proceed73 withpermissions in the planning permission.  practice guidance.

   Who sells statutory credits and how the funds will be used 

   Natural England is selling statutory credits on behalf of the Department for Environment, Food and Rural Affairs (DEFRA).   

   Funds from the sale of statutory credits will be invested in habitat creation or enhancement, as set out in the Environment Act. You will be able to see how credit investment is spent in annual reports from the Secretary of State for DEFRA, which we will publish on GOV.UK when available. 

   Buying statutory biodiversity credits: further guidance for developers 

   Developers can buy statutory biodiversity credits using a credit sales service, available when BNG becomes mandatory. service.

   BeforeYou you buy statutory credits, you can use another service if you want to estimate howthe muchcost of statutory biodiversity credits willbefore cost.you Thisbuy will also be available when BNG becomes mandatory. them.

   Before using these services, you will need to use the statutory biodiversity metric to understand how many biodiversity units and credits you need.  . You may want to discuss this with the LPA. 

   Statutory biodiversity credits: further guidance for LPAs 

   There is additional guidance for LPAs.LPAs.

   Give feedback on this guidance by completing a short survey.