Biodiversity Net Gain for NSIPs

Our previous briefing looked at what Biodiversity Net Gain (BNG) would mean for developers promoting projects through the TCPA regime.

This second briefing considers BNG in the context of Nationally Significant Infrastructure Projects (NSIPs). We will cover net gain for marine projects - so-called Marine Net Gain (MNG) - in a separate briefing.

Introduction

As originally envisaged in the Environment Bill, the mandatory BNG regime was not intended to apply to NSIPs.

This is because the Government considered that these projects "can have fundamentally different characteristics to other development types" [1] and so the Government believed further work and engagement with stake-holders was required. However, in response to widely expressed concerns that the omission of NSIPs would lead to the potentially most environmentally damaging schemes being excluded from the BNG regime, the Environment Bill was amended to include a BNG requirement for NSIPs. This amendment was secured within what is now section 99 and Schedule 15 of the Environment Act 2021 (2021 Act).

The BNG requirement for NSIPs

The 2021 Act defines the biodiversity gain objective for NSIPs as at least a 10% increase in the pre-development biodiversity value of the onsite habitat (albeit the 2021 Act gives the Secretary of State the power to change this percentage by regulations).

Whilst the 10% objective mirrors the BNG requirement for TCPA regime development, the mechanism for securing BNG is tailored to the NSIP regime and has a different legal framework to that for commercial and residential development.

In summary the 2021 Act applies BNG to NSIPs by introducing into the Planning Act 2008:

the concept of biodiversity gain statements to set out the biodiversity gain objective and calculation method for different types of NSIP, including allowance for offsite biodiversity gain and biodiversity credits; and
a requirement that where there is a biodiversity gain statement (either contained within a National Policy Statement or as a separate statement laid before Parliament), the Secretary of State may not grant a development consent order unless satisfied that the relevant biodiversity gain objective is met.

The implementation of BNG for NSIPs

As covered by our previous briefing, in January DEFRA launched a consultation on the implementation of the BNG requirements in the 2021 Act.

Due perhaps to the BNG requirement for NSIPs being the product of a late amendment to the Environment Bill, it is notable that this consultation paper was focussed primarily on the implementation of the BNG regime for TCPA applications, with the NSIP section essentially exploring high level concepts and the Government committing to, "consult again on the full draft approach" for NSIPs. This is with the intention that BNG should apply to all terrestrial NSIPs accepted for examination from November 2025.

In this context, the consultation paper sought views on the following aspects, providing a preview of what the future regime may look like:

Scope, percentage and exemptions: The Government's preference is for BNG to apply broadly to NSIPs, so that where the 10% requirement is not deliverable, a lower percentage target should be applied rather than an exemption.
Transition arrangements for biodiversity gain statements: Subject to further consultation, the Government intends to bring forward a single 'core' statement in the first instance, which will then be integrated into NPSs as these are reviewed. The first statement(s) will be published no later than November 2023.
Process: The Government envisages developers submitting a biodiversity gain plan with their applications and any enhancements then being secured by Requirements in the DCO.
Demonstrating BNG: Acknowledging that NSIP applications often include large areas for environmental mitigation/compensation, the consultation explores the possibility of distinguishing between onsite habitats in the development area and any dedicated mitigation areas.
A portfolio approach: Whilst offsite gains should work in the same way as for TCPA schemes, the paper floats the possibility of organisations such as National Highways, Network Rail and National Grid being able to use their existing estates in order to meet the BNG requirement.
Maintenance period for NSIPs: The Government is considering whether the minimum maintenance period of 30 years should be extended for NSIPs.
Compulsory acquisition: The Government is also considering the use of compulsory purchase powers for the delivery of onsite BNG.

Commentary

We now await the outcome of the consultation to see what variant of the BNG regime emerges for NSIPs although, as noted above, this will be the subject of further consultation in any event. Given the timetable that the Government has set for the publication of the first biodiversity net gain statements (November 2023) and the need for the same to be laid before Parliament, any further consultations will need to happen fairly promptly if the Government is to adhere to its 2025 target.

What does this mean for developers wishing to bring NSIPs forward over the next few years?

As well as continued participation in any of the Government's further consultations on BNG, any developer planning to advance a DCO application would be well advised to start building BNG into their proposals now. This is because, notwithstanding the Government's proposed timetable for the implementation of the mandatory BNG regime, BNG is, to an extent, already here anyway. By way of example, the draft Overarching NPS for Energy (EN-1) published last year included a new section on net gain which advised that "energy NSIP proposals should seek opportunities to contribute to and enhance the natural environment by providing net gains for biodiversity where possible" [2]. In view of the BNG requirement for NSIPs now in the 2021 Act, one would expect this draft policy wording to firm up to reflect the new legal requirement in the next version of EN-1.

Finally, based on the recent consultation paper, those infrastructure bodies with large property estates/portfolios will have the potential opportunity to develop estate-wide strategies for meeting BNG. This is something for such organisations to start thinking about, particularly where they plan to advance their own NSIP applications in the near future.

Footnotes

[1] From the Government's 2019 response to the Net Gain consultation

[2] See section 4.5 of draft NPS EN-1 (September 2021)