Defra’s Environment Act Review Biodiversity Net Gain November 2026 Memorandum: What It Means for You

Last updated: November 10, 2026

Five years after the Environment Act 2021 received Royal Assent, Defra has published its verdict on mandatory biodiversity net gain, and the headline is a cautious "broadly successful." But bury yourself in the detail of the 3 November 2026 memorandum and a messier picture emerges: smaller developers struggling with compliance, local nature recovery strategies running years behind schedule, and public bodies that still don't know a biodiversity duty applies to them.

Quick Answer

The Environment Act review biodiversity net gain November 2026 memorandum, submitted to the Environment, Food and Rural Affairs Committee as post-legislative scrutiny, calls mandatory BNG "broadly successful for larger developments." It also flags clear delivery gaps: small-site compliance burdens, slow local nature recovery strategy publication, low awareness of the public-authority biodiversity duty, and an evidence base Defra says "is not yet mature enough" to confirm long-term outcomes. Developers and landowners should expect continued scrutiny, a now-live small-site exemption, and a revised biodiversity gain hierarchy.

Key Takeaways

• Defra's 3 November 2026 memorandum describes mandatory BNG as broadly successful for larger developments, five years after the Environment Act 2021 became law.
• Developers are now seeking ecological advice earlier and designing around habitat retention from the outset.
• Over 10,000 hectares of off-site habitat sit on the national biodiversity gain sites register, with more projects in preparation.
• Smaller developments have struggled with compliance costs, prompting a 2026 small-site exemption and a revised biodiversity gain hierarchy.
• Of England's 48 local nature recovery strategies, 45 were published by the end of September 2026, most later than Defra's original 12-18 month target.
• Roughly one third of respondents to an initial evaluation of the public-authority biodiversity duty were unaware of it or unsure if it applied to them.
• Defra cites shortfalls in resources, ecological expertise, tailored guidance and organisational support as key barriers.
• Separately, 10% BNG became mandatory for Nationally Significant Infrastructure Projects from 2 November 2026 under different legislation.

What is biodiversity net gain and how does it actually work

Biodiversity net gain is a legal requirement for most developments in England to leave biodiversity in a measurably better state than before construction began. It works by comparing a site's pre-development habitat value against its post-development value, using Defra's statutory biodiversity metric, and requiring a net gain of at least 10%.

The process generally runs in this order:

1. A baseline ecological survey (typically using the UK Habitat Classification system, or UKHab) establishes existing habitat condition and value.
2. The biodiversity metric converts habitat type, condition, size and connectivity into "biodiversity units."
3. Developers follow the biodiversity gain hierarchy: avoid harm first, then mitigate on-site, then create new habitat on-site, and only then buy off-site units or statutory biodiversity credits.
4. A Biodiversity Gain Plan is submitted and approved before works begin.
5. Habitats are secured for at least 30 years through planning conditions, section 106 agreements or conservation covenants.

Edge case: sites with very low starting biodiversity value can sometimes achieve the 10% gain cheaply through modest landscaping. Sites with high existing ecological value (ancient woodland, species-rich grassland) are far harder and more expensive to satisfy, because losing high-value habitat requires disproportionately large replacement gains.

What did Defra say about BNG in the November 2026 Environment Act review

Defra's memorandum to the EFRA Committee states that mandatory BNG has been "broadly successful for larger developments," with clear behavioural change in how schemes are designed. This is the first formal five-year review since the Environment Act 2021 passed.

Key findings attributed to Defra in the memorandum include:

• Developers now engage ecologists earlier in the design process rather than retrofitting habitat solutions late.
• Habitat retention and creation are increasingly considered at the site layout stage, not bolted on afterward.
• The national biodiversity gain sites register now lists over 10,000 hectares of off-site habitat, with more projects being prepared for listing.

"The evidence base is not yet mature enough" to confirm some intended environmental outcomes, Defra's memorandum states, a notable caveat attached to an otherwise positive headline.

Has biodiversity net gain been successful or is it failing

BNG is neither a clear success nor a failure according to Defra's own review, it is a policy that works well for large, well-resourced developers but creates disproportionate burden for smaller ones. That split assessment is the central message of the November 2026 memorandum.

Choose how to read "success" depending on scale:

• Large developments: genuinely changed behaviour, earlier ecological input, growing off-site habitat market. This counts as a win by Defra's own account.
• Small and medium sites: compliance costs and process complexity outweighed benefits often enough that Defra introduced a small-site exemption in 2026.
• Public sector delivery: weak, with low awareness of statutory biodiversity duties undermining consistent uptake.

Common mistake: assuming "broadly successful" means the policy is settled. The memorandum explicitly flags unresolved gaps and says long-term ecological outcomes cannot yet be verified.

What delivery gaps did the five-year Environment Act review find

The review identifies four connected delivery gaps: resourcing, ecological expertise, guidance, and organisational support, all of which compound each other across different parts of the system. These gaps sit alongside slower-than-expected local nature recovery strategy publication.

• Local nature recovery strategies (LNRS): 45 of 48 strategies published by end of September 2026, most taking considerably longer than Defra's original 12-18 month expectation.
• Public-authority biodiversity duty: around one third of respondents to an initial evaluation were unaware of the strengthened duty or unsure whether it applied to their organisation.
• Resources and expertise: Defra specifically cites shortfalls in ecological capacity and tailored guidance, particularly outside large planning authorities and major developers.
• Evidence maturity: with habitats legally secured for 30 years, Defra says it is too early to confirm whether intended ecological outcomes are actually being delivered on the ground.

How much does biodiversity net gain cost developers

BNG costs vary widely depending on site size, existing habitat value, and whether units are delivered on-site or bought off-site, but there is no single fixed fee, costs are driven by ecological survey work, metric calculations, habitat creation or management, and monitoring over 30 years. Defra's memorandum does not publish a specific average cost figure, so developers should budget based on site-specific assessment rather than a generic benchmark.

Cost components typically include:

• Baseline ecological and UKHab surveys
• Metric calculation and biodiversity gain plan preparation
• On-site habitat creation or enhancement works
• Off-site unit purchase, where on-site gain is impractical
• Long-term management and monitoring commitments across the 30-year period

Decision rule: choose on-site delivery if the site has spare land and low existing ecological value; choose off-site units if the site is tightly constrained or urban, where land for habitat creation simply isn't available.

Do all property developers have to do BNG or are there exemptions

Not all developments are required to deliver biodiversity net gain, several categories are exempt, and a new small-site exemption took effect in 2026 following concerns raised in Defra's review. Exemptions apply by development type and, now, by scale.

Exempt or partially exempt categories include:

• Householder applications (extensions, loft conversions, and similar small works)
• Biodiversity gain that is exempt under the revised small-site provisions introduced in 2026
• Certain urgent, temporary, or de minimis developments defined in regulations
• Developments already covered by separate net gain regimes, such as Nationally Significant Infrastructure Projects, which moved to a mandatory 10% BNG requirement from 2 November 2026 under different legislation

Who this is not for: large housing schemes, commercial developments, and most sites requiring full planning permission remain firmly within mandatory BNG, the 2026 exemption is targeted at smaller sites, not a general rollback.

What happens if a developer doesn't meet their BNG targets

A developer that fails to meet its biodiversity net gain commitment risks planning enforcement action, breach of planning conditions, or inability to discharge conditions needed before occupation or completion. Biodiversity Gain Plans are legally tied to planning permission, so non-compliance is a planning matter, not just an ecological one.

Practical consequences include:

• Delayed discharge of pre-commencement or pre-occupation conditions
• Local planning authority enforcement action
• Reputational and financial risk if habitat management commitments lapse within the 30-year monitoring period
• Difficulty securing off-site units late in a project, when supply and timing are tighter

What are the alternatives to doing biodiversity net gain

There is no true alternative to delivering biodiversity net gain for developments within scope, the biodiversity gain hierarchy sets out the only legally recognised routes, in order of preference. Developers cannot simply opt out in favour of a different approach unless they qualify for an exemption.

The hierarchy, in strict order:

1. Avoid harm to existing habitats through site design
2. Mitigate unavoidable impacts on-site
3. Create new on-site habitat to deliver the required gain
4. Purchase off-site biodiversity units from the national register
5. As a last resort, buy statutory biodiversity credits from government

Quick example: a constrained urban infill site with no room for on-site habitat will typically move straight to off-site unit purchase, drawing on the 10,000-plus hectares now listed on the national register.

What mistakes do developers commonly make with BNG requirements

The most common mistake is leaving ecological input too late in the design process, which Defra's own review suggests is becoming less frequent among larger developers but still common elsewhere. Early engagement materially changes both cost and feasibility.

Other frequent mistakes include:

• Underestimating baseline habitat value, leading to a larger-than-expected gain requirement
• Assuming off-site units will always be available near the development, when regional supply varies
• Failing to budget for the full 30-year management and monitoring period, not just construction-phase costs
• Treating the Biodiversity Gain Plan as a paperwork exercise rather than a design-driving document

How do you actually calculate biodiversity net gain on a site

Calculating BNG starts with a UKHab baseline survey, which feeds habitat type, size, condition and strategic significance into Defra's statutory biodiversity metric to produce a baseline unit score. Post-development habitat is then scored the same way, and the percentage change between baseline and post-development units determines whether the 10% gain target is met.

Steps in practice:

1. Commission a baseline UKHab survey and condition assessment
2. Input habitat data into the biodiversity metric calculation tool
3. Model proposed on-site habitat changes against the baseline
4. Identify any shortfall requiring off-site units or credits
5. Finalise the Biodiversity Gain Plan for submission with the planning application

What does the November 2026 memorandum mean for landowners

Landowners who create or manage off-site habitat stand to benefit from growing demand, with over 10,000 hectares already listed on the national biodiversity gain sites register and more projects in preparation. The review signals that off-site unit supply will remain commercially important as smaller developers increasingly rely on it under the revised hierarchy.

For landowners, this means:

• Habitat banking remains a viable long-term land use, backed by 30-year management agreements
• Demand is likely to grow further given exemptions pushing smaller developers toward off-site solutions
• The separate Nature Restoration Fund, created under the Planning and Infrastructure Act (Royal Assent 18 December 2025), and its associated Nature Restoration Levy, operate alongside BNG rather than replacing it

Has BNG policy changed since the Environment Act started in 2021

Yes. The policy has shifted from a single uniform rule to a more tiered system, with 2026 changes including a small-site exemption and a revised biodiversity gain hierarchy introduced directly in response to delivery pressures identified in the five-year review. Separately, mandatory 10% BNG extended to Nationally Significant Infrastructure Projects from 2 November 2026 under distinct legislation.

How long do biodiversity net gain habitats have to be maintained

Created or enhanced habitats must be maintained and monitored for a minimum of 30 years under the standard BNG legal framework. This long monitoring period is precisely why Defra says the evidence base remains immature, most sites have not yet existed long enough to demonstrate full ecological outcomes.

Which developments are exempt from biodiversity net gain rules

Exempt developments include householder applications, certain small sites under the 2026 exemption, and specific de minimis or temporary developments set out in regulations. Nationally Significant Infrastructure Projects are not exempt but instead follow a separate mandatory 10% BNG regime that began 2 November 2026.

Comparison: BNG Delivery Routes at a Glance

FAQ

What does "broadly successful" mean in Defra's November 2026 review?
It means mandatory BNG is working well for larger developments specifically, not that the policy is fully proven across all site types or that outcomes are confirmed long-term.

Is the small-site exemption permanent?
The memorandum references the exemption as a 2026 policy change responding to delivery gaps; Defra has not indicated it is temporary, but future reviews could adjust it.

Do Nationally Significant Infrastructure Projects follow the same BNG rules?
No. NSIPs moved to a mandatory 10% BNG requirement from 2 November 2026 under separate legislation, distinct from the Environment Act 2021 framework.

Does the Nature Restoration Levy replace BNG obligations?
No. The Nature Restoration Levy, tied to the Nature Restoration Fund under the Planning and Infrastructure Act, operates alongside BNG rather than substituting for it.

Why are local nature recovery strategies relevant to BNG?
LNRS inform strategic significance scoring in the biodiversity metric; delays in publishing all 48 strategies (45 published by September 2026) slow accurate local prioritisation.

What should developers do now, given the November 2026 review?
Commission baseline ecological surveys early, check exemption eligibility, and build 30-year management costs into financial planning before submitting a Biodiversity Gain Plan.

Conclusion

Defra's Environment Act review biodiversity net gain November 2026 memorandum delivers a measured verdict: the policy works, mostly, for the developers with the resources to engage early and design around habitat from the start. It works less well for smaller sites, local authorities short on ecological expertise, and public bodies unaware their own biodiversity duties exist.

For developers, the practical takeaway is straightforward, commission baseline UKHab surveys early, check exemption eligibility under the 2026 small-site rules, and factor 30-year monitoring costs into every scheme budget from day one. For landowners, the growing off-site unit register suggests habitat banking remains a durable opportunity, particularly as smaller developers lean more heavily on off-site solutions. Anyone navigating a live or upcoming planning application should treat the biodiversity gain hierarchy as a design tool, not a compliance afterthought, and speak with a qualified ecological consultant before baseline surveys are locked in.

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