BNG Consultation Response

After months of anticipation and significant speculation about whether Biodiversity Net Gain was being quietly dismantled, Defra published its long-awaited responses to both BNG consultations on 15 April 2026.

The verdict? BNG is here to stay, it is being refined rather than repealed, and for habitat bank providers, the medium-term outlook is genuinely positive.

Here’s what you need to know.

The Background: Two Consultations, One Clear Direction

In May 2025, the government launched a pair of parallel consultations. The first examined how BNG could be improved for minor, medium and brownfield development, areas where early implementation had thrown up practical difficulties and disproportionate costs.

The second tackled the long-standing question of how BNG would eventually apply to Nationally Significant Infrastructure Projects (NSIPs), which has until now remained exempt.

Together, the responses set the trajectory for BNG through 2026 and beyond.

What’s Changing for Minor, Medium and Brownfield Development

The 0.2 Hectare Exemption Confirmed

The headline announcement, first trailed in December 2025, is now formally confirmed: all development on sites of 0.2 hectares or less will be exempt from BNG, with legislation expected before 31 July 2026.

The government estimates this will remove around 50% of residential planning permissions that previously required BNG compliance, a sweeping change targeted at the smallest schemes, where administrative costs were judged to be disproportionate to ecological benefit.

For habitat bank operators, it’s worth absorbing the honest acknowledgement that sits alongside this: Defra estimates a reduction of around 10% in demand for off-site biodiversity units as a direct consequence.

That’s not trivial. However, the government also notes that broader planning reforms are expected to drive higher overall development rates, which may offset the reduction over time.

The net effect on demand remains to be seen.

Off-Site Units Level Up for Minor Development

This is the change that deserves closer attention from those active in the BNG market. The government is amending the biodiversity gain hierarchy for minor development, placing off-site biodiversity gains on an equal footing with on-site habitat creation or enhancement. Previously, developers were expected to maximise on-site delivery before turning to the off-site market.

For minor development, which has historically represented around 80% of BNG transactions, this is a meaningful shift. It removes a structural preference that often pushed smaller developers toward awkward, low-quality on-site solutions and instead opens the door to purchasing off-site units from the outset.

Well-managed, strategic habitat banks stand to benefit.

Self-Build Exemption Removed

The existing exemption for small-scale self-build and custom-build development is being removed. The government expects these schemes to fall within the new 0.2 hectare area-based exemption, simplifying the framework and reducing the burden on local planning authorities.

Temporary Permissions: A New Exemption

Planning permissions granted for a maximum of five years will be exempt from the BNG regime.

This addresses a genuine practical difficulty around securing long-term habitat management on land that will be returned to its prior owner.

Brownfield and Open Mosaic Habitat: More Work Ahead

Brownfield development, particularly sites containing Open Mosaic Habitat (OMH), has been one of the more contentious areas of BNG implementation. The government has confirmed improvements to OMH identification guidance and is exploring a new urban habitat category to give ecologists a more accurate tool for representing urban habitats within the metric.

Crucially, a proxy habitat approach will be introduced where OMH units are unavailable, providing developers with a legitimate alternative pathway rather than a dead end.

But the biggest brownfield story is still unfolding. Defra has launched a further consultation, open until 10 June 2026, on a targeted exemption for residential brownfield development, exploring thresholds up to 2.5 hectares.

The outcome of that consultation will determine whether the de minimis exemption is also revised.

Digital Metric on the Way

The existing Excel-based metric tools are to be replaced with a digital, integrated web-based platform.

This is an overdue upgrade that should improve accessibility and usability, particularly for smaller developers navigating BNG for the first time.

NSIPs: A New and Significant Source of Demand

The second consultation response covering Nationally Significant Infrastructure Projects is, from a habitat bank perspective, potentially the more consequential of the two.

Mandatory BNG for NSIPs will come into force on 2 November 2026. The original timeline anticipated an earlier live date, but the scale and complexity of infrastructure consenting led Defra to push the date back. The requirement will apply to all NSIP applications submitted on or after that date and will not be applied retrospectively to projects already in the consenting pipeline.

The key details:

• 10% minimum biodiversity net gain will be required, using the statutory biodiversity metric — the same framework used for Town and Country Planning Act development.
• Only habitats negatively impacted by development will form the BNG baseline, rather than everything within the order limits boundary. This addresses a major concern raised by developers, particularly for linear infrastructure projects with large but largely unaffected footprints.
• Temporarily affected habitats are included in the baseline and must be compensated for, though through a simplified approach.
• Off-site flexibility is built in from the start. Where on-site delivery is impractical, developers can purchase units from the existing off-site market or use statutory biodiversity credits as a last resort.
• Aggregated off-site gains can be sited anywhere within the Local Planning Areas affected by the project. This offers welcome flexibility for large, geographically dispersed infrastructure schemes.

What does this mean in practice? NSIPs; roads, railways, energy infrastructure, water projects are typically large-scale, habitat-intensive developments that will struggle to deliver meaningful gains entirely on-site.

The framework actively anticipates this. For habitat bank providers offering significant volumes of high-quality units, NSIPs represent a substantial and growing pipeline of demand that is qualitatively different from the piecemeal, small-scale transactions that have characterised BNG’s first two years.

The Market Picture

It would be wrong to characterise the government’s response as purely good news for habitat banks. The combination of the 0.2 hectare exemption and the prospective brownfield exemption will reduce the number of developments required to purchase off-site units. The government itself acknowledges around a 10% reduction in off-site demand from the area-based exemption alone.

But the broader picture is more nuanced:

• The off-site hierarchy change for minor development increases the proportion of remaining minor development that will seek off-site units.
• NSIP demand which has not previously existed in any mandatory sense is now confirmed and will be live from November 2026. These are large projects with significant unit requirements, not the kind of small fractional transactions that consume administrative time for minimal return.
• The government’s wider housing and infrastructure ambitions mean more development overall, which counteracts some of the reduction from new exemptions.
• A more streamlined system; digital metric, clearer guidance, simplified processes should reduce the friction that has discouraged some developers from engaging with the off-site market.

The direction of travel is toward a BNG market that is less cluttered with small, low-value transactions and more focused on strategic, large-scale delivery. For established habitat banks with serious ecological credentials and capacity, that is a market worth being in.

What Happens Next

The legislative timetable is now clearer:

• Before 31 July 2026: Secondary legislation to introduce the 0.2ha exemption, remove the self-build exemption, exempt five-year temporary permissions and amend the biodiversity gain hierarchy for minor development.
• 10 June 2026: Brownfield residential exemption consultation closes.
• Later in 2026: Further secondary legislation covering conservation-focused development exemptions, park and green space enhancement exemptions and — subject to the outcome of the brownfield consultation — a possible targeted brownfield residential exemption.
• 2 November 2026: Mandatory BNG for NSIPs comes into force.

Until legislation is in place, existing BNG requirements remain unchanged.

Our View

The government has done something genuinely difficult: held the line on BNG as a mandatory policy while making targeted adjustments that respond to real-world evidence of where it wasn’t working.

Our view is that the exemptions are proportionate. The hierarchy change for minor development is constructive.

And the confirmation of NSIP BNG at scale, with an off-site pathway built in is the most significant development for the habitat bank market since mandatory BNG launched in February 2024.

At Chequered Flag Land, we work with landowners to create and sell biodiversity units through bng.sale.

If you want to understand how these changes affect your site, your units, or your plans for BNG income, get in touch.

Sources: Defra Government Response and Summary of Responses — Improving the implementation of BNG for minor, medium and brownfield development (15 April 2026); Defra Summary of Responses and Government Response — BNG for Nationally Significant Infrastructure Projects (15 April 2026); Defra Environment Blog (20 April 2026).