The Environment Act 2021 – Biodiversity net gain and its implementation

On 9 November 2021, after two years as a Bill and a final period of ping pong between the Houses of Parliament, the Environment Bill received Royal Assent and became the Environment Act 2021 (EA 2021). The majority of the EA 2021 is not yet in force – only the Office for Environmental Protection (OEP) has been brought into effect, although it is yet to receive its enforcement powers. However, a consultation was opened today (11 January 2022) by Defra on biodiversity net gain regulations, consulting on how biodiversity net gain will work in practice including how and when it will be applied to Town and Country Planning Act development, and, at a higher level, Nationally Significant Infrastructure Projects (NSIPs).

Here we look at the requirement for the delivery of a mandatory biodiversity net gain under the Town and Country Planning Act 1990 (TCPA 1990) and the Planning Act 2008 (PA 2008), and when it is anticipated this mandatory requirement will come into force for each, as well as consider what steps developers / promoters should be taking now.

What are the biodiversity net gain requirements?

We discussed the requirements for mandatory biodiversity net gain in respect of developments requiring planning permission in a series of podcasts in summer 2020. The relevant provisions are now contained in Part 6 (Nature and biodiversity) and Schedule 14 of the EA 2021 which insert a new section 90A and Schedule 7A into the TCPA 1990.

With one key exception, the requirements discussed in our podcast series have not changed since the previous iteration of the Bill. The exception to this is that nationally significant infrastructure projects (NSIPs) are now also to be subject to a minimum 10% mandatory biodiversity net gain requirement.

Biodiversity net gain and NSIPs

Section 99 and Schedule 15 to the EA 2021 introduce the requirement for biodiversity net gain in relation to NSIPs via the amendment of Section 103 to 105 and the insertion of a new Schedule 2A to the PA 2008.

The amendments to the PA 2008 provide that if a project is subject to a National Policy Statement (NPS) and that NPS includes a "biodiversity gain statement" or if such a "biodiversity gain statement" otherwise applies to the project, the Secretary of State (SoS) must decide the application in accordance with the biodiversity gain statement. The minimum biodiversity net gain to be required is 10%.

When will the biodiversity net gain requirements come into force?

The Part of the Act which contains the provisions in relation to biodiversity net gain is not currently in force. The consultation launched by Defra provides some clarity on when it is intended those provisions will come into force.

For non-exempt TCPA 1990 development the stated intention is for the mandatory biodiversity net gain requirement to commence in November 2023 for new applications, providing a transitional period of two years from the EA 2021 receiving Royal Assent.

For terrestrial development to be consented under the PA 2008, the consultation states that the UK Government intends to commence the mandatory biodiversity net gain requirement by not later than 2025 and that it wants to use the consultation to test whether this provides the right length of time for projects in the pipeline to transition to the new approach. A shorter transitional period may yet be provided for. Projects which have been accepted for examination by the Planning Inspectorate before the specified commencement date are proposed to not be required to deliver mandatory biodiversity net gain, ensuring projects which are at a sufficiently advanced stage do not need to then identify scheme amendments (and potentially additional land) to meet the mandatory net gain requirement.

There is also an important distinction to note in relation to development in the marine environment, which is that projects, or components of projects, in the marine environment beyond the intertidal zone are not included within the scope of the mandatory requirements for biodiversity net gain. However, the EA 2021 does provide options for introducing such a requirement when a suitable approach has been developed and consulted upon, and it is stated in the Defra consultation that Defra are currently working with a wide range of stakeholders towards a consultation on the principles for marine net gain later this year. With this being the case, these timescales for the commencement of mandatory net gain are expressly stated not to apply to development, or components of development, in the marine environment below the low water mark, with any requirement or transition arrangements for marine net gain to follow after the consultation on principles for marine net gain.

What can applicants be doing now?

Depending on what stage a project is at and which regime it is subject to, applicants should be considering how their schemes can achieve the mandatory 10% biodiversity net gain, noting that this is the minimum future requirement. Ideally the gain should be achieved on-site. However, if this is not possible, work should start now to identify other locations which can serve as biodiversity gain sites because the option of buying biodiversity credits is only to be available to applicants as a last resort where they can demonstrate that they are unable to achieve biodiversity net gain through the available on-site and off-site options.

For NSIPs it may also be possible to include additional land within the proposed Order limits to provide the biodiversity net gains required and for such land to be the subject to compulsory acquisition pursuant to the relevant DCO where the relevant statutory tests for this can be shown to be satisfied. Where this approach is taken it will be important that such land is identified as early as is possible in the development of a project, ideally before statutory consultation on proposals commences.

It is also the case that the relevant development plan or national policy may already encourage biodiversity net gains in connection with development proposals and it is apparent that in many cases planning policy is ahead of planning law. The delivery of biodiversity net gains (or the non-delivery of them) is also a politically sensitive topic and will likely be relevant to the determination of many planning applications, particularly for major developments and projects consented through the PA 2008 regime. It is therefore advisable for applicants to already be identifying how they can maximise biodiversity net gains in their development proposals prior to the transitional periods expiring and the legal requirement for mandatory net gains coming into effect.

If you have any questions of this or would like receive our briefing on mandatory biodiversity net gain, please contact us.