Biodiversity Net Gain: an opportunity for Landowners
The Biodiversity Net Gain regime – part of the Environment Act 2021 – has applied to virtually all commercial developments in England since April 2024. The new scheme, which requires land developers to remediate the harm they cause to biodiversity, will greatly benefit nature restoration in England and provide landowners with an opportunity to diversify their income streams by creating, packaging, and selling units off-site Biodiversity Units (‘Offsite BUs’) to land developers.
What are Offsite BUs?
Offsite BUs are created when landowners enhance the biodiversity value of their land through the creation of new habitats or enhancement of existing ones. With the help of an ecologist, and by using a metric produced by Defra, the landowner can determine the number of BUs that a particular enhancement or creation plan would create, and subject to securing certain approvals from the planning authorities and registration with Natural England, the landowner should be able to then sell these Offsite BUs to developers.
How easy is it to sell Offsite BUs?
Once the Offsite BUs have been created and registered with Natural England they will be ‘fit for purpose’ and can be sold to land developers. The challenge for the supplier, however, is to work out how they can match their supply to an individual developer’s demand – and this is more difficult than one might expect. First, the supplier is likely to have no direct line of sight of the buy-side of the market – the supplier just won’t know who the buyers are. Second, there are circa 150 types of BUs, and individual developers will require different combinations of BUs to meet biodiversity net gain requirements. Third, the Offsite BU needs of many developers will be very small indeed, so the friction costs involved in selling to such developers will outweigh the economic value of such transactions. And fourth, even if all the other issues can be managed, the buyer and seller will still need to transform the enhancement data associated with the Offsite BUs from the seller’s metric file to the buyer’s metric file – not an easy or risk-free task.
How can BNGx help?
BNGx addresses these problems and offers landowners an easy, fast, and efficient way to sell their Offsite BUs. Landowners simply upload their metric files to the exchange, set their price parameters, and confirm how much of their inventory they’d like to make available for sale, and BNGx will do the rest. BNGx will make the landowner’s Offsite BUs available for sale to the nationwide market of developers. When the seller offers the optimal units for a particular buyer, those units will then be matched with that buyer, and if the buyer then wishes to buy the units, BNGx will document, execute, and process the transaction – and update the seller’s portfolio records accordingly. BNGx does all the paperwork, and the trade is processed in minutes.
If you’d like to know more about what BNGx can do for you visit our website at BNGx.com