Combining environmental payments: biodiversity net gain (BNG) and nutrient mitigation
How land managers can combine biodiversity units and nutrient credits, and sell them alongside other environmental payments.
Applies to England
Biodiversity net gain (BNG) is mandatory from 12 February 2024.
You can view all of the BNG guidance in the BNG collection.
Nature markets are at an early stage of development. This guidance is for the first phase of the biodiversity net gain (BNG) and nutrient credit markets, up to March 2025.
Selling biodiversity units and nutrient credits
You can sell biodiversity units or nutrient credits, or both, from a piece of land if you are:
- the landowner
- the long-term leaseholder
- the tenant farmer
- a business or organisation that carries out habitat creation or enhancements
Biodiversity units
Biodiversity units are calculated using the size of the habitat, its quality and location.
You should use the biodiversity metric to calculate how many biodiversity units you can generate from your site.
Nutrient credits
Nutrient mitigation makes sure a new development does not add to nutrient loads in water bodies where protected sites (or Habitats Sites) are in ‘unfavourable condition’ as a result of the polluting effects of excessive nutrients. Nutrient mitigation is also known as nutrient neutrality.
You can create nutrient credits by reducing or capturing nutrients that would otherwise end up in protected water bodies.
Before you sell units or credits
As a land manager there are steps you can take to prepare your site to sell biodiversity units.
Stacking credits and units from different nature markets
Nature markets provide a way for land managers to receive payment for making improvements that benefit nature.
If you use your land to undertake environmental projects, you may be able to sell these services as credits or units to different buyers. Nature markets include carbon sequestration and flood alleviation.
Stacking is when multiple credits or units from different nature markets are sold separately from the same activity on a piece of land.
Stacking biodiversity units and nutrient credits
You can sell biodiversity units and nutrient credits from the same piece of land by stacking them. You can sell the units and credits to the same developer or different developers, provided you meet the eligibility criteria for each market.
Selling more units and credits
You may be able to sell more biodiversity units or nutrient credits after you achieve your planned habitat condition.
Selling more units on an existing biodiversity gain site
If you achieve your habitat creation and enhancements before the end of the existing legal agreement, you may be able to sell more biodiversity units. You can do this if you’re able to make further enhancements.
To sell more biodiversity units, you need:
- confirmation that the original planned habitat creation and enhancements have been completed
- a new or updated legal agreement to cover the remaining time on the initial agreement, plus at least 30 years for the new habitat works
When a BNG agreement ends but you still have a nutrient agreement
If your BNG and nutrient mitigations are stacked, you’ll need to consider the different timescales of the schemes. You need to commit to at least 30 years for mandatory BNG and you can commit to up to 125 years for nutrient mitigation.
If your nutrient agreement is still in place but your original BNG legal agreement has ended, you can sell more biodiversity units providing you maintain the level of nutrient mitigation provided by the site. You will need to show you can further enhance the existing habitats.
To do this, you need to:
- calculate the baseline after the original BNG legal agreement has ended
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only sell the biodiversity units created by the new changes in habitat condition or distinctiveness
- have a new or updated legal agreement to cover any remaining time on the initial agreement, plus 30 years for the new habitat works
How BNG and nutrient mitigation work with other schemes
If you have already received an environmental grant payment or sold nature market credits, you can use the same land to create further habitat enhancements.
You can sell biodiversity units and nutrient credits if it’s clear what the original sales contract or grant payment paid for. To do this, you need to calculate the baseline for BNG and nutrient mitigation once the original planned habitat works have been completed.
For example, if you have an arable field and you received a grant to create a modified grassland, you could improve the habitat to a grassland managed for conservation. This enhancement could then be sold as biodiversity units and nutrient credits.
Public grants
If you’re selling biodiversity units and nutrient credits, you can receive an environmental public grant to:
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help get your project ready for investment - this could mean undertaking investigation works or receiving ecological advice
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access funding which is repaid in full on sale of the biodiversity units or nutrient credits
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pay for a specific aspect of the project, which is not part of the habitat creation or enhancement
There may be lots of relevant environmental public grants available to you. An example of a public grant is the Natural Environment Investment Readiness Fund.
Basic Payment Scheme
If you receive Basic Payment Scheme (BPS), you can still use your land to sell biodiversity units and nutrient credits.
Agri-environment schemes
You may be able to sell biodiversity units and nutrient credits and receive funding from the following agri-environment schemes:
- Sustainable Farming Incentive (SFI)
- Countryside Stewardship (CS)
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Environmental Stewardship (ES)
- Landscape Recovery (LR)
You cannot sell an enhancement funded by an agri-environment scheme as a biodiversity unit or nutrient credit. However, you can use the same land to create further habitat enhancements on top of an existing agri-environment agreement.
To do this, you need to:
- take into account what the agri-environment agreement will achieve when you calculate your baseline
- only sell biodiversity units or nutrient credits that are a result of new works and not those you have already agreed to sell through delivering SFI standards or as part of a LR agreement
You can receive SFI, CS, ES and LR payments on the same landholding as BNG and nutrient mitigation if:
- you can show they are on different parcels of land
- they are on the same parcel of land but are not for creating, enhancing or maintaining habitat for BNG or nutrient mitigation (for example, new public access, maintaining heritage features and building walls)
What to do at the end of an agri-environment agreement
You may need to employ an ecologist to calculate the baseline of the land at the end of the agri-environment agreement. You can then sell biodiversity units and nutrient credits if you can create further habitats or enhancements on the land.
You can choose to end your CS or ES agreement early and sell biodiversity units and nutrient credits instead. If you do this, you may have to repay some or all of your grant.
Voluntary carbon codes
Voluntary carbon codes include the Woodland Carbon Code (WCC) and Peatland code.
You should not sell biodiversity units and nutrient credits from the same land used to sell carbon credits unless:
- you can enhance the habitat more
- this does not affect the carbon value
If you can enhance the habitat more, you need to include what the voluntary scheme paid for in your BNG or nutrient mitigation baseline.
Corporate social responsibility (CSR) payments
If you have created or enhanced habitat to sell to a private company as part of their CSR, you should not sell them as biodiversity units or nutrient credits.
You may be able to sell biodiversity units and nutrient credits with CSR payments. You can do this if you can further create or enhance the habitat.
You need to make sure that the baseline takes into account what the CSR contract paid for.
Give feedback on this guidance by completing a short survey.
Last updated 12 February 2024 + show all updates
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Updated box at top of page to state that biodiversity net gain (BNG) is mandatory from 12 February 2024 and removed the 'draft guidance' label.
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Updated the 'biodiversity units' section as the biodiversity metric 4.0 is now available. Amended the 'public grants' section to clarify examples of when land managers can receive an environmental public grant. Added information on agri-environment schemes to clarify when land managers can receive the different types of scheme payments. Removed the reference to Landscape Recovery payments in the context of ending a scheme agreement early, as this only applies to Countryside Stewardship and Environmental Stewardship schemes. Amended the information on voluntary carbon codes to clarify when land managers can sell biodiversity units and nutrient credits from the same land used to sell carbon credits.
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Added a link to a feedback survey.
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First published.