Off-site BNG: Spatial risk multiplier and trading rules explained
In this article, our expert Steven Crosby discusses what the spatial risk multiplier (SRM) is in biodiversity net gain (BNG), why the location matters, and the trading rules you need to be aware of.
What is spatial risk multiplier in BNG?
For off-site BNG the spatial risk multiplier and trading rules are what happens when a developer can’t feasibly achieve the required 10% biodiversity net gain within a project’s boundary.
This is where off-site solutions, such as dedicated ‘BNG habitat banks’, come into play. When calculating the value of off-site biodiversity gains, the process is very familiar. We still need to assess area habitats, hedgerows and watercourses, looking at both their baseline state and the planned creation or enhancement. The core multiplication is also the same, with a crucial addition: the spatial risk multiplier.
How the spatial risk multiplier works
In biodiversity net gain, the spatial risk multiplier reduces the value of biodiversity units created further away from the development site. The closer and more local the habitat creation is, the fewer units are lost to the multiplier. This system ensures developers prioritise nearby improvements, rather than offsetting biodiversity at further away distances or less suitable locations.
Why location matters for spatial risk
The spatial risk multiplier is a scoring factor designed to incentivise developers to deliver off-site biodiversity net gains as close to their development site as possible. This approach is more beneficial both for nature and for the local communities impacted by the development.
The closer your off-site BNG solution is to the development site, the more BNG units it will contribute to delivering the necessary 10% net gain. The off-site calculation is:
- Distinctiveness x Condition x Area x Strategic Significance x SRM = Biodiversity Units
The SRM has a significant impact on the outcome:
- 1x multiplier: For off-site gains delivered in the same local planning authority or national character area (NCA) as the development
- 0.75x multiplier: For gains in a neighbouring authority or NCA
- 0.5x multiplier: For gains delivered anywhere else in England
What this means in practice is the multiplier might require more offsite BNG units to be secured if the delivery site is a distance away from the development site, as follows:
- 1x multiplier (i.e., no increase): For off-site gains delivered in the same local planning authority or national character area (NCA) as the development
- One third multiplier (i.e., divide by 0.75): For gains in a neighbouring authority or NCA
- Double multiplier (i.e., divide by 0.5): For gains delivered anywhere else in England
Trading rules: Ensuring a fair swap
Once you have your post-development unit values, there’s a final check – the trading rules. These rules are designed to prevent the loss of rare or valuable habitats and apply until you have achieved ‘no net loss’ of biodiversity units.
There are a lot of specific rules around this but the core principle is ‘like-for-like or like-for-better’ in reference to the habitat and the distinctiveness of it.
Essentially, you cannot trade down. If your project removes a medium-distinctiveness habitat, like an individual tree, you cannot compensate for this by creating a larger area of a lower-distinctiveness habitat, like modified grassland, even if the biodiversity unit score seems to match. You must replace the habitat with one of the same or higher distinctiveness.
Contact CSX for navigating the spatial risk multiplier and trading rules
Navigating the spatial risk multiplier and the intricate trading rules adds significant complexity to an already challenging process. When you work with CSX to find an off-site BNG solution, you can be assured that all of these factors have been considered and accounted for.
We ensure any off-site units we provide are fully compliant and that our pricing reflects the true cost of delivering a robust biodiversity net gain for your project.
CSX handle the complexities so the developer can focus on the build process with confidence. Contact us by either calling 01609 786655, emailing us at contact@csxcarbon.com, or visit our contact page.