Over the past few months, the Government has made various announcements about nutrient neutrality.
It’s not certain whether nutrient legislation will be announced in the King’s speech on 7 November 2023, and any proposed legislation is likely to take a number of months to be passed. Furthermore, the statutory credit scheme is limited in scope. Therefore, local planning authorities (LPAs) and developers will need to consider solutions to unlock housing developments in nutrient sensitive catchment areas.
The Conservation of Habitats and Species Regulations 2017 require an LPA to undertake an “appropriate assessment” of whether the development will have an adverse effect on a protected site e.g. Special Area of Conservation. This assessment includes adverse effects of any nutrients, such as phosphates and nitrates, on a protected site.
Natural England issued advice to 74 LPAs in nutrient sensitive catchment areas. In these areas, the LPAs requires the impacts of nutrients on protected sites to be mitigated, and nutrient neutrality to be evidenced, before planning permission is granted.
The case of Fry confirmed that LPAs cannot discharge planning conditions under full planning permissions, or approve reserved matters under outline planning permissions, until nutrient neutrality is demonstrated. This means there is a risk that it may not be possible to implement, or fully implement, planning permissions granted prior to nutrient neutrality advice being issued by Natural England to LPAs. The outcome of application to appeal the Fry case is currently awaited.
The impacts of nutrients on protected sites can be mitigated using on-site mitigation measures, creating off-site mitigation, or purchasing local credits, or statutory credits. LPAs will require evidence that the mitigation measures are secured in perpetuity under a s106 agreement, or local credits or statutory credits have been purchased, prior to granting planning permission, approving reserved matters or discharging conditions.
Prior to purchasing a site, developers should seek specialist technical advice on whether nutrient mitigation, such as reed beds and water treatment facilities, can be installed on-site, and whether this would be sufficient to make the development nutrient neutral. If the on-site measures provides more mitigation than is required for that specific development, it may be possible to register the credits with Natural England and sell the credits to other developers within the same nutrient sensitive catchment area.
A developer may purchase additional land within the nutrient sensitive catchment area and register the land for nutrient credits with Natural England. Alternatively, a developer may purchase credits from a local credit scheme or habitat bank within the affected catchment area. LPAs also have the opportunity to set-up their own credit schemes, and sell credits to developers.
In the future, where on-site or off-site mitigation is not feasible, then statutory credits may be an option. However, the Government has only launched one statutory credit scheme in Teesside, with a limited number of credits available in each round of credits released. Therefore, the progression of development sites in 73 LPA areas are entirely dependent on on-site mitigation, or off-site credit schemes.
The Government previously indicated it would be publishing details on support for nutrient mitigation schemes, however no further information has been provided. In the meantime, developers, LPAs or other private landowners who setup their own local credit schemes, may be able to maximise revenue by selling nutrient credits and biodiversity net gain units for the same area of land. This process is known as stacking, more information is available here.
If you are considering purchasing a development site in a nutrient sensitive catchment area, we would recommend that you undertake full due diligence. This is to establish whether adequate mitigation can be provided on-site, or whether the transaction needs to be conditional on the purchase of off-site land or off-site credits.
LPAs’ hands are largely tied until the Government brings forward legislative reform. However, LPAs, developers and private landowners can help unlock housing developments by setting up local credit schemes, whilst providing environmental benefits and maximising income by stacking and selling credits.
Further information on credit schemes can be found on our Spotlight page. For more information on nutrient neutrality, or assistance with any queries, please do get in touch with the public sector team.