Quick Comparison
| Biodiversity Net Gain (BNG) | Biodiversity Offsets | |
|---|---|---|
| Scope | Development must leave biodiversity in a measurably better state | Compensation for unavoidable biodiversity losses through equivalent gains elsewhere |
| Applicability | Primarily land-use planning and development approvals | Any project causing biodiversity loss after mitigation hierarchy applied |
| Required/Voluntary | Mandatory in England (Environment Act 2021); emerging elsewhere | Varies; required in some jurisdictions, voluntary offset markets exist |
| Geography | England (mandatory); Australia, France, Colombia have similar requirements | Global; multiple national and voluntary frameworks |
| Key Focus | Net positive outcome—more biodiversity after development than before | No net loss—replacing what was destroyed, ideally like-for-like |
What is Biodiversity Net Gain?
Biodiversity net gain is a planning policy approach requiring that development projects deliver a measurable improvement in biodiversity compared to the pre-development baseline. England's Environment Act 2021 made BNG mandatory for most planning permissions from February 2024 (major developments) and April 2024 (small sites), requiring a minimum 10% net gain in biodiversity value maintained for at least 30 years.
BNG is measured using the Biodiversity Metric (currently version 4.0), developed by Natural England. The metric assigns biodiversity units to habitats based on their size, distinctiveness, condition, and strategic significance. Developers calculate pre-development units, design projects to avoid and minimize biodiversity loss (following the mitigation hierarchy), and then demonstrate that post-development units exceed the baseline by at least 10%.
Gains can be delivered on-site (within the development boundary), off-site (on land controlled by the developer or purchased through the biodiversity credit market), or through statutory credits purchased from the government as a last resort. The preference hierarchy favors on-site delivery, then off-site within the local area, then off-site elsewhere, with statutory credits as the option of last resort at premium pricing designed to incentivize earlier-stage solutions.
What are Biodiversity Offsets?
Biodiversity offsets are measurable conservation outcomes designed to compensate for residual, unavoidable biodiversity losses from development or economic activity, after the mitigation hierarchy (avoid, minimize, restore) has been fully applied. The concept is analogous to carbon offsets—achieving equivalent environmental gains elsewhere to balance losses at the impact site.
Offset mechanisms exist in numerous jurisdictions. Australia's Environment Protection and Biodiversity Conservation Act allows offsets for impacts on matters of national environmental significance. France's "Éviter, Réduire, Compenser" (Avoid, Reduce, Compensate) framework requires ecological compensation for development impacts. Colombia, South Africa, and several US states have offset banking systems. The Business and Biodiversity Offsets Programme (BBOP), now concluded, developed voluntary standards and principles that influenced many national frameworks.
Offsets typically aim for "no net loss" rather than net gain—replacing what was lost without requiring an improvement. The offsetting mechanism varies: conservation banking (purchasing credits from pre-established habitat banks), permittee-responsible offsets (the developer implements conservation actions directly), or in-lieu fee programs (payment into a fund that implements conservation collectively). Each mechanism differs in timing, accountability, and ecological outcome reliability.
Key Differences
1. Outcome target. BNG requires a net positive outcome—more biodiversity after the project than before. Offsets target no net loss—replacing what was destroyed. A 10% BNG requirement means development must actively improve biodiversity; offsets only need to hold the line. This difference in ambition is fundamental.
2. Regulatory integration. BNG in England is integrated into the planning system—it's a condition of planning permission. Offsets are typically triggered by environmental impact assessments or species-specific regulations and applied ad hoc to individual projects. BNG's integration into routine planning creates universal coverage; offset requirements depend on impact significance thresholds.
3. Mitigation hierarchy emphasis. Both nominally follow the mitigation hierarchy (avoid, minimize, restore, offset), but BNG's metric-based system explicitly rewards avoidance and on-site delivery through the unit calculation. Offset systems have been criticized for jumping too quickly to compensation without genuinely exhausting avoidance and minimization first.
4. Measurement approach. England's BNG uses a standardized national metric applied consistently across all developments. Offset measurement varies widely—different jurisdictions use different metrics, currencies, and equivalency frameworks. This standardization difference affects comparability, transparency, and market efficiency.
5. Temporal dynamics. BNG requires gains to be secured and maintained for at least 30 years (with habitat management plans and legal agreements). Offset durations vary by jurisdiction—some require in-perpetuity conservation easements; others accept shorter timeframes. The temporal commitment affects the long-term ecological outcome.
6. Additionality. BNG credits must deliver gains additional to what would otherwise occur—existing habitats in good condition can't simply be relabeled as "gain." Offset additionality has been a persistent challenge, with studies finding that offset sites sometimes protect areas that face no realistic development threat.
7. Market structure. England's BNG has created a rapidly developing market for biodiversity units, with habitat banks, brokers, and a government register. Offset markets exist in various forms (wetland mitigation banking in the US, biobanking in Australia) but lack the standardized national framework that BNG provides.
Which One Do You Need?
If you're developing land in England, BNG is mandatory—your planning application won't succeed without a Biodiversity Gain Plan demonstrating at least 10% net gain. Engage ecologists early in design to assess baseline biodiversity, optimize site layout for habitat retention, and identify on-site gain opportunities before considering off-site options.
If you're developing in jurisdictions with offset requirements (Australia, France, parts of the US), you need to understand the specific offset mechanism, currency, and marketplace in your area. Engage early with regulators and offset providers, because securing appropriate offsets can take months and significantly affect project timelines and costs.
For companies operating internationally with biodiversity-sensitive operations (mining, agriculture, infrastructure, energy), understanding both concepts is essential for project planning and risk management. The Kunming-Montreal Global Biodiversity Framework's target to halt and reverse biodiversity loss by 2030 signals that BNG-style requirements will spread to more jurisdictions.
Can You Use Both?
BNG incorporates offsetting as one mechanism for delivering net gain—off-site biodiversity units function similarly to offsets. The key difference is that BNG sets the outcome target (10% net gain) while offsets are a delivery mechanism. In England, biodiversity offsets are essentially subsumed into the BNG framework.
In jurisdictions without BNG mandates, voluntary biodiversity offsets can complement corporate biodiversity commitments. Companies aligning with TNFD recommendations or the Global Biodiversity Framework may use offsets to address unavoidable impacts while pursuing net-positive biodiversity outcomes across their portfolio.
The emerging concept of "biodiversity credits" extends beyond offsetting to include investments in biodiversity conservation that aren't linked to specific development impacts. These impact investments fund habitat restoration, species recovery, and ecosystem protection as stand-alone environmental goods—distinct from compensatory offsets tied to development damage.
Council Fire's Perspective
BNG represents a genuine step forward in how societies value biodiversity in development decisions. By making net gain a default condition of planning permission, England has shifted the baseline from "damage and maybe compensate" to "leave it better than you found it." We'd like to see this approach adopted more widely.
That said, the metric-based approach has limitations. Biodiversity doesn't reduce neatly to numerical units—a hectare of ancient woodland has ecological value that no amount of newly planted habitat can truly replace. We advise clients to treat the 10% minimum as a floor, not a ceiling, and to invest genuine effort in avoidance and on-site ecological design rather than defaulting to the easiest credit purchase.
Frequently Asked Questions
Does 10% BNG mean biodiversity will actually improve?
Not guaranteed. The metric is a proxy, and ecological outcomes depend on the quality of habitat creation, long-term management, and monitoring. Newly created habitats take years to decades to reach ecological maturity. However, the 30-year management requirement and monitoring obligations improve the chances of real outcomes compared to previous approaches.
Can you offset the loss of irreplaceable habitats?
Under England's BNG system, impacts on irreplaceable habitats (ancient woodland, certain wetlands) cannot be offset through the standard metric—they require bespoke compensation agreed with the planning authority. Most offset frameworks globally recognize that some biodiversity losses are genuinely irreplaceable.
How much do BNG credits cost?
Prices vary significantly by habitat type, location, and market conditions. In England's early BNG market, off-site biodiversity units have been trading at £20,000-50,000+ per unit. Statutory credits (the last-resort government option) are priced at £42,000 per unit for most habitat types—deliberately set high to incentivize other delivery mechanisms.
What is a habitat bank?
A habitat bank is a site where biodiversity enhancements are created and maintained, generating biodiversity units that can be sold to developers who cannot deliver sufficient on-site BNG. Habitat banks are registered and managed under legal agreements, with 30-year management and monitoring obligations. They function similarly to wetland mitigation banks in the US.
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