Environmental and economic leaders are urging the UK Government to rethink controversial proposals that would exempt all small development sites under one hectare from Biodiversity Net Gain (BNG) requirements. New research reveals the move could devastate nature recovery efforts and dismantle the emerging biodiversity credits market, just as it begins to gain traction, says Build in Digital.
What the research shows
A new analysis titled BNG in small developments, published by eftec and commissioned by The Lifescape Project and Wildlife and Countryside Link, highlights the dangers of the Government’s current consultation proposals. The report shows that exempting all small sites from BNG rules would be a major setback for environmental policy in the UK and risks making the BNG system ineffective, says the company.
Key findings from the report:
– 86% of applications (69,500 out of 80,400) in the first year of BNG implementation claimed exemptions, often by self-declaring no impact on biodiversity.
– If the new proposals pass, up to 97% of planning applications could be exempt from BNG, virtually nullifying the policy.
– Over 215,500 hectares – an area equivalent to the Yorkshire Dales or Snowdonia – could be developed with no requirement to compensate for biodiversity loss.
– Loss of biodiversity compensation worth £250 million annually, up from £180 million owing to current loopholes and poor enforcement.
– The biodiversity credits market would be cut in half, generating only 6,504 Biodiversity Units instead of 13,364 under a better-targeted policy.
Why small sites matter in the BNG debate
Small development sites dominate planning in England. Around 95% of planning applications are for sites under one hectare, says Build in Digital. The Government’s proposal to exempt all such sites would eliminate a huge portion of biodiversity gain opportunities and threaten progress toward the legally binding Environment Act 2030 targets and global biodiversity commitments.
“Exempting small sites from BNG would return us to the bad old days of unchecked development and missed nature recovery targets,” said Richard Benwell, CEO of Wildlife and Countryside Link. “A targeted approach – excluding only the very smallest sites under 0.1 hectares – would allow the policy to work as intended while reducing the burden on small-scale developers.”
A smarter, balanced alternative
Rather than a blanket exemption for all sites under one hectare, the report proposes a more strategic and effective adjustment:
– Only sites under 0.1 hectares defined as “very small sites” should be exempt.
– Close current loopholes that allow large sites to evade BNG responsibilities.
This approach would:
– Still exempt over 50,000 very small sites to reduce regulatory burden on self-builders and micro-developers.
– Add 20,552 more hectares of development under BNG rules compared to the Government’s current proposal.
-Double the size of the biodiversity unit market (13,364 units vs. 6,504), boosting private investment in nature restoration.
“The proposed blanket exemption is reckless – for nature, for taxpayers, and for the economy,” said Adam Eagle, CEO of The Lifescape Project. “Instead of creating a fairer, more efficient system, it risks silencing wildlife and crushing a market that could generate much-needed private finance for biodiversity restoration.”
Why this matters for nature and the economy
BNG is seen as the second most important environmental funding stream after nature-friendly farming subsidies. The success of the biodiversity credit market, which channels developer contributions into habitat restoration and conservation, is critical to closing the UK’s environmental funding gap.
Even Secretary of State Steve Reed recently emphasised the role of private finance in achieving nature recovery targets. But excluding most developments from BNG would undermine confidence in this innovative funding mechanism.
What’s at stake?
– The future of the biodiversity credit market
– The UK’s ability to meet its 2030 nature recovery targets
– The credibility of environmental policy and enforcement
– Over £250 million in lost compensation for nature destruction annually
A win-win path forward
Environmentalists, economists, and planners agree: a more focused exemption policy, combined with stronger enforcement and closing existing loopholes, would deliver gains for nature while supporting developers and safeguarding a thriving biodiversity market.
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