Understanding Biodiversity Net Gain Markets

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In the UK, the Biodiversity Net Gain (BNG) compliance market is a regulatory framework designed to ensure that new developments contribute positively to biodiversity. Implemented under the Environment Act 2021, BNG mandates that developers deliver at least a 10% net gain in biodiversity compared to the pre-development baseline. 

How the BNG Compliance Market Operates

Developers are expected to achieve the required biodiversity net gain through the following hierarchical approach:

1. On-site enhancements: Improving biodiversity within the development site itself.
2. Off-site units: If on-site gains are insufficient, developers can purchase biodiversity units from off-site habitat banks or landowners who have created or restored habitats elsewhere. 
3. Statutory biodiversity credits: As a last resort, if neither on-site nor off-site options are feasible, developers can purchase statutory biodiversity credits from the government. These credits are priced deliberately high to encourage on-site and off-site solutions first .

Market Developments and Challenges

Since the BNG policy's implementation in February 2024, the UK has seen the emergence of habitat banks and private landowners offering biodiversity units for sale. These initiatives provide developers with alternatives to meet their BNG obligations. However, challenges persist, including the need for robust monitoring systems, ensuring the ecological integrity of offset sites, and addressing concerns over the effectiveness of biodiversity metrics used to quantify gain.

The BNG compliance market represents a significant step toward integrating biodiversity considerations into land development practices. Its success will depend on continued collaboration between government bodies, developers, conservation organizations, and local communities to ensure that biodiversity gains are genuine, measurable, and sustained over the long term.

In the UK, BNG (Biodiversity Net Gain) units are traded through a combination of direct private agreements and emerging structured marketplaces. 

Go the BNG Units Marketplace