Biodiversity net gain statutory credits: annual report 2024 to 2025
Published 14 March 2025
Applies to England
© Crown copyright 2025
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Headline summary
The total payment received for statutory credits was £247,416 from the introduction of mandatory Biodiversity Net Gain (BNG) for Town and Country Planning Act (TCPA) development on 12 February 2024 to 11 February 2025.
Scope of report
This report is the first annual report, which forms the Secretary of State’s reporting duty under section 101(8) of the Environment Act 2021. This requires the Secretary of State to publish report at least annually on income received from the statutory credits system for the previous year, how the income was spent and the projected biodiversity value of the measures funded by that expenditure.
Biodiversity net gain and statutory credits
BNG is a statutory requirement under the Environment Act 2021. BNG became mandatory on 12 February 2024 for large TCPA developments and on 2 April 2024 for small sites. BNG requires that new developments secure a net 10% gain in biodiversity, as quantified by a statutory biodiversity metric, between the pre and post development baseline.
The mitigation hierarchy sets out our preference for how developers should achieve BNG:
- A developer should first avoid or mitigate habitat loss on the development site.
- If that is not possible, the developer can purchase biodiversity units from third parties such as habitat banks.
- If suitable off-site biodiversity units are not available, they can purchase statutory biodiversity credits from government to achieve BNG and allow their development to proceed.
Developers wanting to buy statutory credits must prove why they cannot meet BNG using on-site and off-site options, as purchasing statutory credits is a last resort option for developers who are unable to use on-site measures or off-site units to deliver BNG. This report refers to the sale of statutory credits only.
Credits sales - overview
Natural England sells statutory credits on behalf of the Secretary of State. Funds from the sale of statutory credits and all credits payments are ring-fenced by HM Treasury and will be invested for the purposes set out in the Environment Act 2021 s.101(6):
- Carrying out works, or securing the carrying out of works, for the purpose of habitat enhancement (within the meaning of Part 7A of the Town and Country Planning Act 1990) on land in England.
- Purchasing interests in land in England with a view to carrying out works, or securing the carrying out of works, for that purpose.
- Operating or administering the arrangements.
The total value of credit payments received in the first year of operation February 2024 – February 2025 was £247,416 (see table 1).
The level of receipts is relatively low due to the early stage of the policy’s implementation. It also suggests BNG is operating as expected, with statutory credits being used for their intended purpose as a backstop for the market.
Natural England has not yet spent income from the sale of statutory credits on habitat creation or enhancements as the income has not yet reached a high enough level for efficient large-scale investment. A credit investment strategy will be put in place once revenues are at a level to achieve efficiencies of scale. Government’s intention is that this strategy funds habitat creation and enhancement whilst supporting the emerging biodiversity net gain off-site unit market for developers.
We expect to spend around £300,000 of credits revenue in the financial year 24/25 on administering sales of statutory credits – this includes business as usual costs such as processing sales and answering queries.
We will outline more details of our approach to credits investment later this year.
Table 1: Statutory credit sales 2024 / 2025
| Month | No of sales (cumulative) | Monthly sales £ | Total sales £ | |
|---|---|---|---|---|
| February | 0 | 0 | 0 | |
| March | 0 | 0 | 0 | |
| May | 0 | 0 | 0 | |
| June | 0 | 0 | 0 | |
| July | 1 | 42,144 | 42,144 | |
| August | 1 | 0 | 42,144 | |
| September | 2 | 126,960 | 169, 104 | |
| October | 3 | 2,760 | 171, 864 | |
| November | 4 | 2,520 | 174,384 | |
| December | 6 | 50,952 | 225,336 | |
| January 2025 | 8 | 20,080 | 247,416 |
Source: Natural England