Green Finance Deep Dive Series: Biodiversity Net Gain

Cara Clarke and Tess Fitzgerald • September 22, 2023

Welcome to the first edition of Accelar’s new Nature Finance Deep Dive series, where we take a regular look at the latest topics in green finance and nature recovery. With a constant influx of new policies and tools, this series aims to cut through the technical jargon and break down the key takeaways and impacts for each topic. Our first article focuses on Biodiversity Net Gain (BNG), a concept that will become particularly significant in the next few months as it has been recently announced by the Government that legislation to bring in BNG as a standardised and mandated policy will be published in November. This feature looks at what developments and opportunities are happening in the BNG space, and what it will mean for landowners and developers.


What is BNG all about? 


BNG in its simplest form is a planning requirement that is targeted at new developments, so that nature doesn’t lose out [1]. It places a requirement so that if a loss of habitat is expected a result of a development, other habitat must be created. Preferably on-site, but if that is not possible then off-site (on-site meaning the land being developed, and off-site meaning land away from the development site).


BNG seeks to enhance the overall value of natural capital as part of Defra’s long term nature ambitions. It is introduced to help protect nature and continue the flow of regulating services. It acknowledges the value of the natural environment through the lens of improving wildlife, cleaner air and water, natural flood management, educational opportunities. These are all ecosystem services that are introduced when biodiversity is created. The aim of BNG is not only to increase the amount of biodiversity in England, but also to enhance existing habitats. There has been a 13% decrease in average abundance of wildlife in the UK since the 1970s according to the State of Nature Report [2].


The UK government has introduced new policies under the Environment Act 2021 for mandatory BNG. The Government has said that BNG will become mandatory for all planning permissions in England from January 2024, and for small sites from April 2024. The Act will require that all biodiversity be not only replaced but increased by a minimum of 10% post-development. On completion of the development, the habitat enhancement will be required to be maintained for at least 30 years.  The National Planning Policy Framework [3] (NPPF) also sets out the government’s planning policies and guidance on how these should be applied, which incorporates the delivery of BNG policy.


Biodiversity units are calculated through the Biodiversity Metric 4.0 [4] tool from Natural England, the Government’s advisor for the natural environment in England. The units represent a measure used to evaluate the amount of biodiversity in a specific area. The metric uses various factors such as habitat type, size, quality, and location to determine value. It is important to note that area habitats are measured differently to linear habitats (such as watercourses and hedgerows), therefore these must be dealt with individually within three separate ‘modules’ of the metric. Units located on-site are the preferred approach and may be generated by local enhancement through means such as habitat creation and green infrastructure. Off-site units may be required if there is an insufficient natural capital opportunity within the development to meet BNG requirements. Statutory credits come into play if a developer is unable to meet mandatory BNG requirements through on-site or off-site units. Defra recently released the guide prices and information on calculating costs for developers buying statutory credits [5]. These credits are valued by habitat type and distinctiveness. The credits range from £42,000 to £650,000 (e.g., for peat lakes) per credit.


A new nature market 


One of the aims behind this part of the new Environment Act is to create a new compliance market for biodiversity. To understand the growth in environmental markets, one only has to look at the UK’s carbon markets. The current state of UK nature markets is small scale, but they are predicted to develop quickly over the next few years [6]. The fact that carbon has become an established market is evidence to suggest the future opportunity for the biodiversity unit market. The UK Woodland Carbon Code (WCC) alone has validated units for 1 million tCO2e sequestered in the most recent annual period of data recorded and has achieved an average growth rate of carbon units created of 28% between 2018 and 2022.


Currently, there is no plan for a government provided platform to facilitate the trading of biodiversity units. However, Defra will introduce a national register in November 2023 to enable the recording and validation of off-site habitats as BNG units. It will be primarily tailored for landowners, agents, and developers, but may be necessary for ecologists and Local Planning Authorities (LPAs) to utilise it. 


It is also expected that BNG marketplace platforms provided by the private sector will appear as BNG becomes mandatory for through the planning system. The BNG market also has a potential global scalability and allows opportunities for landowners to access the ecosystem trading market. Whilst only focused on biodiversity, with careful consideration of other impacts it could effectively contribute to a more holistic “environmental net gain” and can link to broader sustainability goals [7].


In January 2022, Defra released their market analysis report [8]. In the report, an assessment was undertaken of potential scarcity of biodiversity units in Local Planning Authorities (LPAs). They used a simple ratio, comparing the total potential supply of biodiversity units to the annual demand. For every 1 unit of demand annually, the total supply must be at 100 units to meet expected demand over 10 years, indicating a risk of market scarcity. Essentially, an LPA needs to have a supply of biodiversity units at least 10 times greater than the annual demand over 10 years to meet expectations. This highlights the importance of having a substantial supply to meet demand to maintain biodiversity effectively. Fortunately, there are already a pipeline of habitat creation projects and biodiversity unit suppliers in England that will hopefully become available in time to meet initial demand.


The report outlined that 6,200 off-site BNG units are estimated to be required per annum. Additionally, according to Natural England [9], the market is expected to be worth £135m - £274m annually. Any landowner in England can provide units if they meet the eligibility criteria [10]. BNG can act as an opportunity for landowners to secure a long-term income stream, whilst creating positive environmental outcomes.


How BNG sits alongside other environmental gains


Landowners/agents may also want to consider combining the provision of BNG units with other environmental payments through stacking and bundling of different ecosystem services. Stacking involves overlapping ecosystem services on a piece of land into different credits, whilst bundling involves selling a suite of ecosystem services as a single package to the same buyer. This gets complicated so to ensure high integrity environmental outcomes, needs to happen within certain rules e.g. to avoid “double counting”. Landowners and agents can enhance their environmental impact by combining BNG units with other environmental payments through these methods, encompassing water quality improvements, natural flood management, and amenity value. The current guidance notes that credits like biodiversity units and nutrient credits cannot be sold from the same land unless habitat enhancement is possible without adverse effects on carbon value. There will be more clarification as the BSI nature standards are created [11].


The creation of BNG units comes under the umbrella of Environmental Net Gain (ENG), defined by the UK National Infrastructure Commission as an approach to development that aims to leave biodiversity and the environment in a measurably better state prior to the development. It can be measured through biodiversity, ecosystem services and environmental metrics. ENG and BNG must work hand in hand to support a long-term change in how developments contribute positively to nature.



Case studies and pilot projects: 


Natural England has highlighted several case studies to be used as guidance for developers and landowners on how they can enter the BNG market. They have also introduced several pilot project sites which will support the design of the BNG statutory credits scheme. These sites provide useful insights on how landowners can get their land ready for BNG.


Biodiversity Metric 4.0 Case Study 1: Residential Development

This hypothetical case study describes the development of a medium-sized residential area and highlights the importance of considering BNG requirements early in the design phase. It compares two scenarios. Read more here. 


The Iford Biodiversity Project

The Iford Biodiversity Project, based in East Sussex, is a pilot project from Natural England and aims to deliver over 3,000 BNG units. The estate has started to develop 1,200 hectares of farmland into habitats such as grassland, floodplains, and ponds. The projected has conducted habitat and species surveys and assessments to ensure they are in the best position to offer BNG units to developers.


Spains Hall Estate 

Spains Hall Estate is a pilot project of Natural England and presents an opportunity for BNG. The project plans to deliver over 500 BNG units over 115 hectares to developers in addition to delivering a variety of other ecosystem services such as: natural flood management, water quality enhancement, water resource availability, carbon credits, and social and environmental impact. These ecosystem services can be sold alongside BNG units through stacking or bundling.


Many stakeholders are in the process of comprehending the recent guidance and requirements for mandatory BNG. BNG offers a promising opportunity for landowners, and the market is anticipated to develop rapidly. Early preparation will enable a smoother transition come November. Please get in touch if you’d like to learn more about BNG, or to understand how it could work for you. We have experience in developing nature credits, and also for helping developers meet their environmental commitments. For more information on how various projects are preparing biodiversity units for BNG, you can view our Nature Finance Impact Hub (free registration).  Please drop us a line to sign up to receive further information on BNG and nature finance.


UPDATED 28/09/23 to reflect the latest BNG announcement.


BNG Finder: A Year In Review

By Jennie Beebe • February 5, 2026
2025 was a year of change and uncertainty for the Biodiversity Net Gain (BNG) Market. Despite it being BNG's first full calendar year of being a regulatory requirement, there has been caution amongst developers, landowners and the wider industry as the sector awaited outcomes of Government consultations. Following the announcement at the end of 2025 that exemptions will apply to smaller sites of up to 0.2 hectares, it is recognised that while this change avoids a more severe impact on the BNG sector, it does still represent a setback for nature recovery and for incentivising private investment in nature markets. The government has, however, stated its intention to make offsite BNG easier to deliver, which will be critical to achieving nature restoration at a national scale. How this commitment is translated into practice over the coming year will therefore be of particular interest. Despite this, clarity from the announcement has brought some stability back into the market, and with the potential inclusion of NSIPs into BNG regulation this year, there are new opportunities on the horizon to be excited about. This is the first full year that we have published the BNG Dashboard, which provides open insights into how the BNG Market is evolving. As the year has come to a close, some of the key trends and highlights are: ✅300% increase in registered BNG units since January 2025 ✅190 total registered BNG sites ✅4,263 hectares of land have been registered for BNG as of the start of January 2026 ✅96% of BNG units are habitat units, the majority being grassland (69%), followed by heathland (14.7%) and woodland (11.7%) units. ✅Over 12% of LPAs are currently registered with BNG units We asked our colleagues, Nina Hees, Senior Sustainability Consultant and Chris Fry, Managing Director, to reflect on the past year in BNG, and how they see the future evolving. Why is BNG such an important planning regulation? Nina: Development is inevitable, and as we have already stripped England of much of its wildscapes, aligning the two to ensure not only no net loss, but net gain for nature, is critical. Mandated BNG policy addresses the UK's nature decline by enhancing ecosystems, and given the way the metric is set up, it helps encourage habitat corridors and networks, enhancing fragmented habitats, and connecting us to nature. And you might ask - well why is biodiversity important? That's a question for another time, but in essence biodiversity underpins so much! What sets BNG apart as a market mechanism? Nina: BNG puts the mitigation hierarchy into action - principles which are already embedded in global frameworks and agreements (For example, Environmental Impact Assessments, CSR standards, the Kunming-Montreal Global Biodiversity Framework). Additionally, BNG provides a measurable mechanism and accounting method to flow private finance into nature and, being backed by government, provides more security. It creates a regulatory market - one which encourages adequate supply, demand, and accountability. Importantly, it brings together ecologists, developers, local government, landowners, NGOs, and investors within one framework - something that doesn't always happen in nature conservation. What's also exciting is that it is one of the more advanced, mandated global biodiversity markets, one which sets a precedent for other nations who may approach similar systems, and a mechanism to learn from. How have you seen the evolution of the BNG market in the past year? Nina: If I consider 2024 to 2025, the BNG market has transitioned from a theoretical policy framework to a live, growing market. Since early 2025, scaling has been rapid with the increasing uptake of habitat banks and BNG-dedicated land. Currently, supply is generally outstripping demand, especially for easier to establish habitats like grasslands. There is a risk that England turns into a monoculture of 'other neutral grassland' - so to speak. However, demand and pricing is strongest for rare or harder to replace habitats (For example, water related units, higher distinctiveness habitats) and I expect that to continue, especially where those units are hard to source locally. Chris: The completion of many Local Nature Recovery Strategies around the country in 2025 is also positive for informing where and what kinds of offsite habitat creation and enhancement can achieve the greatest impact. How are Accelar & BNG Finder driving the BNG market? Chris: We recognised that the BNG market was complex and wanted to play our part in helping our clients large and small, on the supply side as well as developers and infrastructure bodies, to navigate it successfully. BNG Finder is in a unique position firstly as it is a curated service that recognises that different parties will have different priorities (to achieve social, climate or other environmental co-benefits from high integrity offsite BNG provision). Nina: Also, we are providing the service as an extension of our advisory work to help to accelerate the green transition. That means we have insight into the supply and project development side through our work with farmers and land managers like nature conservation charities, as well as the demand side through our engagement and contacts with buyers of units and investors. We also monitor unit prices, trades etc. and model BNG revenue/ cost for projects so have insight into where the risks lie and what a project could look like over 20-30 years. We have an adaptive business model, which is important given an evolving policy landscape. We can respond to changes in regulation, price and support clients in this. How do you see the impact of the recent small development exemption on the evolution of the BNG market, and on nature more widely? Nina: Whilst there are benefits to making the system more efficient and lowering costs by limiting exemptions to very small sites, we may miss out on some private-sector investment that would otherwise go to nature. In the current market, demand for small sites account for most of the BNG demand. With the small sites exemption, I would expect a reduction in private sector demand for smaller, fractional units, which could affect the speed or viability of some nature restoration projects. And, from nature's perspective, everything is connected and small contributions can add up! What is exciting about the next year or few years in BNG? Nina : The expansion of the BNG mandate to Nationally Significant Infrastructure Projects (NSIPs) is likely to be a significant demand trigger. I'm also curious about the shift towards digital BNG. Moving away from Excel can make the system more transparent and efficient to navigate but may also come with its own challenges. Chris: The expansion of BNG into NSIPs arises at a time when the UK’s pipeline of investment in infrastructure projects is rising again. The National Infrastructure and Service Transformation Authority (NISTA) was formed last April and has already published a new 10 Year Infrastructure Strategy that is backed by at least £725 billion of government funding. Whether associated with NSIPs or slightly smaller scale asset upgrade projects, the potential demand for offsite BNG has already been illustrated in lots of recent procurement exercises by utility companies. As we head into BNG’s second full year, and emerging shifts to the regulatory landscape come into play, BNG Finder will continue to monitor and report on how the market evolves. Stay up to date by following us on the BNG Finder LinkedIn , checking our dashboard for its monthly updates, and feel free to get in touch with our team via bngfinder@accelar.co.uk.

Get a quick overview of the BNG market via our new dashboard

By Cara Clarke • February 13, 2025
Happy birthday Biodiversity Net Gain (BNG) - it is now a year since the mandatory regime went live in February 2024. The year has flown by with: Heroic habitat healing, Forward-thinking farmers forging nature-based resilience for their estates, Dynamic data-driven approaches, Bold bank building (habitat banks that is), Guidance galore, and Multiple marketplaces. It is still relatively early days for BNG to really make its mark and there is no doubt plenty more scope for innovation. To celebrate the anniversary, the ever-resourceful analytics team at BNG Finder have come up with a one page dashboard to provide a monthly snapshot of the national picture. We get it, BNG is pretty complex and keeping track can be challenging. So we thought that the dashboard could be useful to provide a concise overview of how the BNG market is progressing and some of the key trends. We hope it is useful and would be delighted to hear your feedback and we can’t promise but do shout if you have any requests for developing it a bit further in future months. Please get in touch .

BNG's First Six Months: Key Insights for Landowners and Developers

By Cara Clarke • September 18, 2024
August marked the six-month milestone since Biodiversity Net Gain (BNG) became mandatory for most planning applications under the Town and Country Planning Act. Drawing from Natural England's recent reflections and our own expertise with our BNG Finder service, we'll explore how this first half year has gone.