How to sell biodiversity units to developers making off-site gains: explore the market, register a gain site and record allocations.
Applies to England
This draft guidance explains what will apply when BNG becomes mandatory. We will continue to update this guidance.
‘Land manager’ refers to these different roles across the biodiversity net gain (BNG) guidance:
- estate owner
- habitat bank operator
- facilities, property or estate manager
- land agent
- land advisor
- planning authority using land they own
- developer using land they own
Why you may choose to sell off-site biodiversity units
Under mandatory BNG legislation, developers must deliver a biodiversity net gain of 10%.
If developers cannot achieve BNG on their own sites, they will have to make off-site gains by using off-site biodiversity units. Off-site means outside the red line boundary of the development that has planning permission requiring BNG.
You can sell biodiversity units to developers on:
- land you own
- a landowner’s land with their permission
For the purposes of BNG, biodiversity is measured in standardised biodiversity units.
Your land will contain a number of biodiversity units, depending on factors like its:
In order to sell units, you will need to follow various steps, including:
- using the statutory biodiversity metric to prove the accurate calculation of how many units your habitats could generate
registering your units as a biodiversity gain site on a national public register
- recording on the register the allocation of the off-site gains to a developer, who will use it to achieve their BNG
Selling in the BNG market is a choice for land managers. It is a potential source of revenue and could fund nature recovery work on your land. You may, for instance, choose to generate and sell biodiversity units alongside farming, creating income from land that may otherwise be unsuitable for food production.
Obligations and options when you sell biodiversity units for off-site gain
Once created, off-site units must be maintained for at least 30 years.
The land manager is legally responsible for creating or enhancing habitat, and managing that habitat for at least 30 years to achieve the target condition.
The details of your obligations will depend on:
- which option you choose for selling your units
- what you agree in the legal agreement and habitat management and monitoring plan (HMMP) you make when you legally secure your units
Options for selling biodiversity units
There are 3 main ways you can sell to developments looking for off-site biodiversity units. Make an informed decision based on what is best for the land owner.
1. Sell biodiversity units independently
You’ll need to take full responsibility for following all the steps in this guidance.
2. Work with one or more partners
You can team up with a local non-governmental organisation (NGO) or other land managers. Depending on how many people you work with, you may be able to create large habitat banks. You would then sell biodiversity units as a group. As a group, you still need to follow all the steps in this guidance.
If you choose this option, you need to make sure you work out:
- who is responsible for which activities
- how you’ll share payments
3. Use a habitat bank operator
A habitat bank operator leases your land and pays you a fixed fee on a regular basis, for example, monthly or yearly. Typically, the operator will try to find you a buyer and sell to them; legally secure your land; register your gain site and record its allocation, so you would not need to follow these steps yourself.
Either the operator or the land manager may do the habitat creation, enhancement and management, as well as any reporting. You will need to agree all the details of who does what in your contract with the operator.
Make sure you check the contract with the operator to find out:
- who is responsible for which activities
- when and how you’ll receive payment
- what will happen if the habitat doesn’t reach the target habitat condition
- what will happen if no units are sold within the period of the legal agreement
- what will happen if the habitat bank operator ceases trading
You can search online to find habitat bank operators. Farmers’ organisations and publications may advertise them.
Combining BNG with other environmental payments
If you’re already receiving payment for creating or enhancing habitat, consider how you can combine BNG with other environmental payments.
When you cannot sell biodiversity units
You cannot sell biodiversity units or combine them with other environmental payments when you’re already required to create or enhance habitat for:
- restocking trees
- marine licensing
- remediation under the environmental damage regulations
Selling biodiversity units on protected sites
You must ensure that any protected species licences required are in place before works commence.
Non-intertidal protected sites
You can enhance features that are not specified as one of the designated features of the protected site. You must not harm a designated feature.
Intertidal protected sites
You can enhance any intertidal habitat on a protected site, including the features for which the site is designated, provided this is acceptable to the consenting organisation.
How to sell biodiversity units
This is an example order of steps, but the order of some steps is flexible.
You can register your gain site:
- before recording the allocation of units to a developer, or
- at the same time you record the allocation
You can register your gain site and allocate units to a developer:
- before you sell your units
- at the same time as you sell your units
- after you sell your units
The 30-year BNG commitment starts from the completion of habitat enhancement works, as defined in your legal agreement.
You can begin habitat creation, enhancement and management on a gain site before allocating off-site units on it. This is called habitat banking. Or you can allocate the units and then begin the habitat work as soon as possible.
You can sell different units on one gain site to different developers. You would need to follow the steps in this guidance for each allocation of units to a developer.
1. Find out how many units you could sell and the habitat types you could create
You will need to consult a qualified ecologist who will do a survey and measure how many units you have on your existing habitat. There is guidance on how to do this, using the statutory biodiversity metric. Seek advice from relevant professionals (for example ecologists or land advisors) on your options to enhance the value of the habitats on your site, and to understand how many units you could sell.
You will get more units per hectare if you create, enhance or restore a particular habitat that is strategic for your location. Your local nature recovery strategy will map strategic habitats for your area. Where this is not yet published, you can use the draft strategy, or another strategy your LPA recommends. You can find your local planning authority (LPA).
You can consider:
- creating and enhancing habitats to meet the BNG requirements of a specific development, or
- creating and enhancing habitats that are appropriate to your site conditions and locally in demand, before matching with a development
2. Price your units
To set a price for your units, you should think about the cost of, for example:
- initial creation and enhancement of habitats
- management of the land covering at least 30 years
- monitoring and reporting
- ecologist or other expert’s costs
remedial work to correct any habitat management failures
- machinery, tools and other staff to carry out the tasks
- consulting experts to review your legal agreement
It is important to ensure that your pricing covers all of these costs over a minimum of 30 years to meet the obligations in your BNG legal agreement. You may be able to find biodiversity unit pricing information in online marketplaces, or through your local authority and land agents. Be mindful that different locations and types of projects will have pricing variations, and your prices should be based on your own costs to deliver the units.
You should price units based on the costs incurred when doing the habitat enhancement and not the number of units habitats will generate. A habitat enhancement may be worth more units to one developer than another. The land manager’s price for the work is fixed, but the price per unit will go up or down depending on distance to the development site.
Defra and Natural England do not set off-site biodiversity unit prices. Statutory biodiversity credit prices are not guideline prices for biodiversity units sold in the off-site private market.
3. Secure the units with a legal agreement
Before you can register your gain site, you must have a legal agreement. This could be a planning obligation or, if you are a land owner, you can alternatively have a conservation covenant. The legal agreement must secure habitat enhancement and maintenance for at least 30 years. You make legal agreements with your local planning authority or another responsible body. They detail the habitat works you are committing to and the outcomes to be achieved.
You’ll also need to prepare a habitat management and monitoring plan (HMMP) and agree this with your LPA or responsible body.
4. Find a buyer for your units, if you do not have one already
To explore the private market, you could:
- search online for marketplaces
- consult a land agent, broker or another consultant
- speak with developers you already have links with
- speak with your LPA, who may be able to signpost you to buyers in the market and in some cases may act as informal brokers
- speak with habitat bank operators who would try to organise a sale for you
Off-site BNG is a private market and there is no guarantee you will find a buyer.
5. Sell your units
It is up to you how you arrange the sale, including any contract of sale you may choose to have with the buyer. You may want to seek legal advice on making the sale.
When planning a contract of sale, you should consider including:
- the number and type of units to be registered and allocated to a development (see steps 6 and 7)
- your commitment to record the allocation of units
Prices and payment terms should be agreed between you and the buyer.
The developer may not want to complete the sale of units until they are confident their biodiversity gain plan will be approved. You may wish to seek a deposit from the developer to reserve the units, and accept full payment when the gain plan is approved and you allocate the units to the development.
You’ll need to agree whether you’ll get paid by:
- lump sum
- staged payment
6. Register your gain site
You must register your land as a biodiversity gain site on the national biodiversity gain sites register, available when BNG becomes mandatory. This is operated by Natural England.
The register lists sites that are helping development projects achieve BNG. The purpose of the register is to show how and where developments are improving biodiversity off-site. It also prevents ‘double counting’, which would happen if the same units were assigned to multiple developments. Sites on the register may be allocated to specific construction projects to help them achieve their biodiversity gain target. The register does not contain contact details of available gain sites and is not a ‘matchmaking’ service to connect buyers and sellers. Buyers and sellers will find each other through the private market.
If you’re registering someone else’s land, you must provide a signed, dated written statement from them as proof that you can do this on their behalf.
Personal information added as part of registration, such as names, addresses and contact information, will not be published in the public register.
7. Record the allocation of off-site units to a development
You (or the developer, with your permission) must record the allocation of off-site biodiversity gains to a development. This service will be available when BNG becomes mandatory.
8. Manage the habitat for at least 30 years
Off-site units must be maintained for at least 30 years following the completion of habitat enhancement works, as defined in your legal agreement.
If habitat creation, enhancement and management work has not started by the time you record the allocation of off-site units, this should start within 12 months of allocation.
Further sources of information
Defra’s land use blog has published step by step BNG flowcharts for land managers.