Statutory biodiversity credits and when to use them

Statutory biodiversity credits are the last resort in the biodiversity net gain hierarchy, and they are priced so that you will not want to use them. Buying credits from the government discharges the 10 per cent gain requirement when on-site delivery and off-site units have both been exhausted, and the price is set deliberately above the market rate for equivalent off-site units. That is the design, not an accident of the market.

For a developer appraising a constrained site, the useful question is not whether credits are expensive. It is whether the scheme can evidence that it had no alternative, because that evidence is what the local planning authority tests when it approves the biodiversity gain plan. The position described here is as at September 2026, and prices and rules should be checked on GOV.UK before they are relied on.

Where credits sit in the hierarchy

Mandatory biodiversity net gain under the Environment Act 2021 works through a condition deemed attached to most planning permissions, requiring a biodiversity gain plan approved by the authority before development begins. The plan has to show a 10 per cent gain measured with the statutory metric, secured for at least 30 years.

The hierarchy runs in a fixed order:

1. Avoid and minimise harm to existing habitat on site, then deliver gain on site.
2. Where on-site delivery falls short, secure off-site biodiversity units, either on land you control or from a registered provider.
3. Where neither closes the gap, buy statutory biodiversity credits from the government.

Each step has to be shown to have been considered before moving to the next. Skipping straight to credits because it is administratively simpler is the mistake that gets gain plans refused.

How the credits are priced, and why

The government publishes a price list with credits tiered by habitat type, so replacing a distinctiveness band that is hard to recreate costs more than replacing common grassland. Prices are reviewed and updated, and the published schedule is the only reliable source, so quote it at the date you price the scheme rather than relying on a figure from a previous appraisal.

The pricing principle is the part worth understanding. Credits sit above the expected market price for equivalent off-site units precisely so that the private market in habitat banks develops and so that habitat is created in real places rather than paid for in the abstract. Receipts are directed to habitat creation through government programmes, but the site of that habitat is not yours to choose and carries no local benefit you can point to at committee.

That last point matters more than the money on a scheme where local ecological benefit is politically contested.

When a scheme may rely on credits

Credits are available to any development subject to the gain condition, but relying on them requires the gain plan to explain the steps taken. In practice, three situations recur.

A tight urban site with no surrounding land, where on-site gain is limited to green roofs and planting, and the shortfall is small. A scheme in an area where no registered off-site provider has units of the right habitat type available. And a scheme where programme pressure means an off-site agreement cannot be concluded in time, which is the weakest of the three and the one an authority is most entitled to push back on.

Where the shortfall is in a habitat that is hard to recreate, credits may be the only lawful route, because the trading rules in the statutory metric restrict what can be substituted for what.

Evidencing that on-site and off-site were exhausted

This is the part that is usually thin, and it is the part the authority reads most closely. A defensible record includes:

• The metric outputs showing baseline, post-development on-site score and the residual shortfall in units by habitat type.
• A design note explaining the on-site options tested and why each was rejected, with drawings rather than assertions.
• Dated enquiries to registered off-site providers covering the relevant national character area, with their responses.
• A note of any land in the applicant's control that was considered for off-site delivery.
• The date the credit purchase was priced and the assumptions carried into the appraisal.

Dated enquiries are what separates a real search from a claim of one. Two emails sent the week before the gain plan is submitted read exactly as they are.

The ecological work behind all of this belongs to a competent person. The Environment Act 2021 regime expects the statutory metric to be completed by someone competent to do it, and a Biodiversity Net Gain Assessment drafted by anyone else is a starting point for that professional rather than a substitute. The habitat baseline itself normally comes from a Preliminary Ecological Appraisal carried out in an appropriate survey season.

How credits appear in the biodiversity gain plan

The gain plan is submitted after permission and before commencement. Where credits are used, it records the number and tier of credits, the residual shortfall they cover, and the purchase itself, which is made through the government service. The authority approves or refuses the plan, and development cannot lawfully begin until it is approved.

Two sequencing points catch people out. The credit purchase is generally made in connection with an approved plan rather than speculatively, so build the administrative step into the programme rather than assuming it can happen on the day. And a gain plan that relies on credits without the evidence described above can be refused, which stops the site rather than merely costing money.

What it does to a marginal appraisal

For a small scheme the credit cost is a line item. For a larger scheme with a substantial shortfall in a high distinctiveness habitat it can be material to viability, and it arrives late, after the land has usually been bought.

Three habits reduce the damage. Run the metric at the earliest design stage, not at planning submission, so that the shortfall is known while the layout can still change. Price the credit exposure as a worst case in the appraisal and carry it as a contingency. And test off-site availability during due diligence rather than after permission, because the answer changes the land value.

Where the cost tips the scheme, the shortfall belongs in the Viability Assessment with the metric outputs attached, rather than as an unexplained figure in a cost plan. Related reforms are moving too, and the planning law updates timeline is the place to follow them.

Where to check current prices and rules

Three sources, in this order. The GOV.UK guidance on biodiversity net gain for the operative rules and the current statutory credit prices. The Environment Act 2021 and the regulations made under it for the statutory position, including exemptions, which have been amended since the regime began. And the authority's own validation list and local plan, because some authorities seek gain above the statutory 10 per cent through local policy.

One honest uncertainty. The exemptions and the small sites position have both been adjusted since February 2024, and further change has been signalled. Check the current regulations for the specific scheme rather than relying on a summary written at any particular moment, including this one.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it. For specialist technical reports, qualified professional input may be required.

PlanScope can draft the supporting narrative around a competent person's metric outputs. Browse the report types and start a draft. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.