Further to the Government’s consultation on potential changes to Biodiversity Net Gain (BNG) earlier in 2025 there has been a lot of speculation about whether BNG was being ‘scrapped’! This being despite the detail of that consultation making it clear that BNG requirements for new developments were not going to removed.
The first responses to that consultation have now been released https://assets.publishing.service.gov.uk/media/694184dc58a21370f58f3028/NPPF_PIB_Supply_Package_Letter_-_SoS_to_LAs.pdf with Steve Reed MP, Secretary of State for Housing, Communities and Local Government stating “that the government will exempt smaller developments up to 0.2 hectares from biodiversity net gain, and introduce a suite of other simplified requirements to improve the implementation of BNG on small and medium sites that are not exempted.”
Whilst there has been a lot of coverage of the government’s recent announcements on Biodiversity Net Gain (BNG) and proposed reforms to the National Planning Policy Framework (NPPF), CSX’s Steven Crosby believes a technical assessment of these proposals suggests they represent a positive move for BNG, towards a more pragmatic approach for delivery. The adjustments should reduce administrative friction and prioritise high-integrity, large-scale habitat creation over fragmented on-site efforts.
For the development sector, the proposed changes provide the long-term certainty required for land acquisition and project viability:
- The 0.2-hectare exemption acknowledges that BNG requirements must be proportionate, and reduces the administrative burden on smaller projects where ecological gain is often negligible and difficult to enforce.
- By proposing to limit Local Planning Authorities (LPAs) from mandating requirements above the 10% statutory minimum at the plan level, the government is providing essential cost predictability. Developers wishing to do more and go further can still do so.
- Perhaps most significantly, the government is exploring ways to simplify how developers acquire off-site units. This is likely to make it more straightforward to stock up on biodiversity units – with a move away from the complex practice of holding units on trust – allowing them to be formally allocated to specific developments when needed. This would allow for far more efficient portfolio-wide strategic planning and de-risking of future projects.
From a supply-side perspective, the shift towards larger, more consolidated transactions is a positive development for those managing habitat banks:
- Restating that Nationally Significant Infrastructure Projects (NSIPs) will need to deliver BNG from May 2026 is a critical market signal. Many of these major projects will require significant volumes of off-site units, providing a new demand pipeline for high-quality habitat providers.
- Managing numerous small-scale sales for tiny fractions of units is an administrative burden and isn’t why most habitat bank landowners entered this space. The new exemptions mean landowners can focus on high-impact agreements and delivering for nature.
- The government is hinting at easing access to off-site units where on-site delivery is impractical. Large-scale off-site habitat banks will deliver better and more resilient ecological outcomes than small and isolated patches of habitat within development schemes, which are often difficult to manage effectively in the long term.
The proposals are subject to further consultation in early 2026 and will require secondary legislation, so there is no immediate change.
By shifting the balance towards bulk procurement and professional off-site habitat banks, the system is moving towards one that is both easier for developers to navigate and more efficient for landowners to support.
We at CSX believe the proposed changes are a positive improvement for the effective practical delivery of BNG. Addressing a number of the issues that have created friction in the market as it has developed over the last 22 months. CSX looks forward to 2026, and continuing to help guide both developers and land owners through the BNG process, whether buying BNG units or producing them for sale from BNG habitat banks.