BNG Units and Statutory Credits

Biodiversity units and statutory biodiversity credits sound similar, but they are not the same. Biodiversity units are the values generated by the statutory biodiversity metric. They allow the biodiversity value of habitats before and after development to be compared. Statutory biodiversity credits are different: they are a government-operated last-resort mechanism for developments that cannot achieve the required gain onsite or through registered offsite biodiversity gains.

What are biodiversity units

The UK government has introduced a policy of biodiversity net gain (BNG), which means that qualifying developments in England will need to achieve a minimum 10% increase in the biodiversity value of habitats on and around the development site. To measure this, developers use a tool called the statutory biodiversity metric, which calculates the number of biodiversity units before and after the development. Biodiversity units are based on the size, condition and distinctiveness of the habitats. The metric produces separate units for area habitats, hedgerows and watercourses. These cannot be exchanged for one another.

How do developers achieve Net Gain?

Developers have three options to deliver BNG: on-site, off-site or through statutory credits.

• Onsite BNG means creating or enhancing within the development boundary. Retaining and improving existing habitat can often form an important part of the design.
• Offsite BNG comes from habitat created or enhanced on other land. The gains must be properly secured, registered and allocated to the development.
• Statutory credits can be purchased from the government and are used to fund habitat creation projects across England. Statutory credits are more expensive than off-site biodiversity units, to encourage the development of the private market.

Developers must follow the biodiversity gain hierarchy. They should first avoid and reduce adverse effects on habitats before considering compensation through habitat creation or enhancement. For qualifying minor developments, on-site and off-site options may be considered together. Statutory credits remain the final option.

How offsite biodiversity units work

Offsite biodiversity units are generated when land is created or enhanced for biodiversity and the resulting gain is made available to a development that cannot provide all of its required BNG onsite.

The statutory biodiversity metric is used to calculate how many units the proposed habitat improvements could generate. Depending on the habitat, the calculation considers factors such as its area or length, distinctiveness, condition and strategic significance. The location of an offsite gain in relation to the development also affects the number of units available through the metric’s spatial-risk multiplier.

Developers must purchase the appropriate type of units for the habitats affected by their development. Area-habitat, hedgerow and watercourse units are calculated separately and cannot be exchanged for one another.

Who can sell biodiversity units?

Biodiversity units can be sold by landowners or leaseholders who have the legal authority to create, secure and manage habitat on the land. An authorised agent or representative may complete the registration and allocation process on their behalf. Farmers, estate owners, local authorities and habitat bank operators may therefore supply biodiversity units where they own or legally control suitable land. Ecologists, land agents and other advisers may support the process, but they do not own or sell the units unless they also hold the relevant interest in the land.

To sell BNG units successfully land managers should follow these steps:

1. Determine the habitat needs of their area by referencing the relevant Local Nature Recovery Strategy (LNRS) for their land. LNRSs outline priority areas for nature conservation. Provide guidance on restoration and enhancement efforts.
2. Explore opportunities to combine BNG with environmental payment schemes, like credits or agri environment schemes. Nutrient credits offer a way to reduce water pollution by creating or restoring wetlands of absorbing nutrients from agricultural runoff or sewage. Agri environment programs are incentives provided to farmers as a reward, for adopting land management practices that contribute positively to the environment, wildlife preservation, landscape conservation and climate mitigation.
3. To determine the number of BNG units, on their site they should consult with an ecologist and utilise the biodiversity metric. They have two options for habitat management; either create or enhance habitat before selling it (known as habitat banking) or do so after finding a buyer (known as contract growing). If any habitat improvement was undertaken on their land prior to January 30, 2020, they must recalculate their BNG units.
4. In order to secure the land, they need to enter into an agreement committing them to managing the habitat for a minimum of 30 years. This agreement could take the form of a planning obligation (section 106) with the planning authority (LPA), a conservation covenant with a body (such as a charity or public organization) or a combination of both. Additionally, they are required to establish and agree upon a habitat management and monitoring plan (HMMP) that outlines how they will maintain and enhance the quality of the habitat over time in collaboration with their LPA or responsible body.

Land managers have options for selling BNG units:

1. Directly sell them to developers either independently or through intermediaries like brokers or trading platforms.
2. Collaborate with their LPA to allocate BNG units from their land to developers in exchange for compensation. This arrangement assists LPAs in fulfilling their obligation to secure BNG for developments within their jurisdiction.
3. A habitat bank operator allows individuals to purchase BNG units from their land and then sell them to developers or LPAs. These habitat banks consist of areas of land that offer BNG units, for development projects. They are regulated by Natural England and need to meet certain standards of quality and security.

BNG statutory credits differ from these units because they are issued by the UK government not by land managers or local planning authorities. They are more expensive and should only be used as a last resort after consultation with an ecologist.

How are statutory biodiversity credits different?

Developers may purchase statutory biodiversity credits only when they cannot meet their BNG requirement through appropriate on-site or off-site habitat gains. Before purchasing credits, the developer must have planning consent and a completed statutory biodiversity metric calculation showing the number and type of credits required. The use of credits must be included in the Biodiversity Gain Plan and approved by the local planning authority before development begins.

BNG stands for Biodiversity Net Gain, which means that the credits are generated by projects that enhance the natural environment and its wildlife.

The Bottom Line

Biodiversity units provide the common measurement behind BNG. Onsite and offsite units relate to measurable habitat outcomes, while statutory credits provide a final route where those options cannot meet the requirement. Understanding the distinction helps make BNG proposals clearer and more transparent.

Related guidance: Current BNG regulations and exemptions | How BNG assessments work