The impact of the biodiversity net gain requirement on the cost management of projects

This article provides a legal overview of the potential impact of the biodiversity net gain (BNG) requirement introduced by the UK government’s Environment Act 2021 on the cost management of major or minor development projects. This BNG requirement aims to protect the environment from the negative impacts of construction processes and activities. It relates to the UK government’s overarching goal to embed a broad ‘environmental net gain’ principle in the planning system, as per the government’s refreshed 25-year plan of February 2023. This paper provides an overview of when BNG is required, how to provide it, its duration, the metrics required for assessments, the exemptions for providing such a requirement and the BNG plan approval process. Government guidance and recent developments since the inception of the new Labour government in July 2024 are summarised. The overall result of implementing the BNG requirement is that there are added costs to factor into the planning of a project, more scrutiny from relevant planning authorities and potentially more uncertainty about the cost management of relevant projects, due to many factors.