Biodiversity offsetting is often discussed in relation to development projects where it is not possible to avoid or fully mitigate impacts on habitats and wildlife.
However, the way biodiversity is addressed through the planning system in England has changed significantly since the term first became widely used. Biodiversity net gain (BNG) is now a legal requirement for most developments within scope, requiring developers to deliver a measurable improvement in biodiversity. For developments that cannot achieve the required gain entirely on site, off-site biodiversity gains can form part of the solution.
In this guide, we explain what biodiversity offsetting means, how it relates to BNG, when off-site biodiversity gains may be needed, and what developers should consider when planning biodiversity measures.
Contents
- What Is Biodiversity Offsetting?
- How Does Biodiversity Offsetting Relate to Biodiversity Net Gain?
- When Might a Development Need Off-Site Biodiversity Gains?
- How Is Biodiversity Value Measured?
- What Are Biodiversity Units?
- What Are Statutory Biodiversity Credits?
- What Should Developers Consider When Planning Biodiversity Offsetting?
- Biodiversity Gain Plans & the Planning Process
- Can Landscaping Contribute to Biodiversity Net Gain?
- Biodiversity Offsetting & Urban Development
What Is Biodiversity Offsetting?
Biodiversity offsetting is the principle of compensating for unavoidable biodiversity losses by creating, restoring, or improving habitat elsewhere.
The underlying principle is that impacts on biodiversity should first be addressed through the mitigation hierarchy. Development should seek to:
- Avoid impacts wherever possible.
- Minimise impacts that cannot be avoided.
- Restore habitats and biodiversity where appropriate.
- Compensate for residual impacts through appropriate measures.
This means biodiversity offsetting should not be viewed as a way of simply paying to remove the environmental consequences of development. The emphasis is on dealing with impacts at their source before considering compensation for losses that remain.
The same principle remains central to England's current biodiversity gain framework. For major development, the biodiversity gain hierarchy prioritises avoidance and mitigation before moving towards on-site habitat enhancement, on-site habitat creation, registered off-site gains and, finally, statutory biodiversity credits.
How Does Biodiversity Offsetting Relate to Biodiversity Net Gain?
Biodiversity net gain is the current statutory framework in England. Biodiversity offsetting is a broader term describing the principle of compensating for biodiversity losses through habitat creation, restoration or enhancement.
For most developments subject to mandatory BNG, the objective is to achieve at least a 10% increase in biodiversity value, measured using the statutory biodiversity metric.
A development can achieve this through a combination of:
- On-site biodiversity gains within the development boundary.
- Off-site biodiversity gains delivered elsewhere, including through purchased biodiversity units.
- Statutory biodiversity credits where the other options cannot provide the required gain.
These options are not interchangeable. For major development, the biodiversity gain hierarchy establishes the order in which they should be considered, with statutory biodiversity credits being a last resort.
For non-major development, the hierarchy was amended for applications made from 6 August 2026, allowing on-site enhancement, on-site creation, and registered off-site gains to be considered at the same level of preference.
How Is Biodiversity Value Measured?
Modern biodiversity net gain calculations are based on the statutory biodiversity metric.
The metric converts different habitat types into standardised biodiversity units. It considers factors including:
- Habitat type
- Habitat size
- Habitat condition
- Strategic significance
- The difficulty of creating or enhancing the habitat
- The time required for a habitat to reach its target condition
- The distance between habitat loss and habitat creation in relevant circumstances
This provides a consistent way of calculating biodiversity value before and after development and determining the measures required to achieve the necessary gain.
The statutory metric covers a range of habitat types, including grassland, woodland, hedgerows, lakes, and watercourses.
What Are Biodiversity Units?
Biodiversity units are the standardised measure used to quantify biodiversity value within the BNG system.
A development's baseline habitat is assessed using the statutory biodiversity metric to establish the number and type of units present before development. The proposed development is then assessed to determine the biodiversity value that will remain or be created afterwards.
Where the development cannot deliver the required gain on site, biodiversity units can be generated through eligible habitat creation or enhancement elsewhere and allocated to the development.
Off-site biodiversity sites can be registered with the government, and information about registered biodiversity gain sites and the biodiversity gains allocated to developments is recorded on the national Biodiversity Gain Sites Register.
This provides greater transparency around where off-site gains are being delivered and which developments they are allocated to.
What Are Statutory Biodiversity Credits?
Statutory biodiversity credits are different from privately supplied off-site biodiversity units.
They are purchased directly from the government and are intended to act as a last resort where a developer cannot achieve the required BNG through on-site gains or available off-site units. Developers need to demonstrate why the other options are not suitable before statutory credits can be used.
This distinction is important when discussing biodiversity offsets or biodiversity credits with project teams. Buying statutory credits is not simply another way of purchasing an off-site biodiversity project. It is a specific mechanism within the statutory BNG framework and should not be treated as the default approach.
When Might a Development Need Off-Site Biodiversity Gains?
Not every development site will have enough space or the right conditions to achieve its required biodiversity gain entirely within the site boundary. This can happen where, for example:
- A development has a relatively high existing biodiversity value that is difficult to replace on site.
- The proposed layout leaves limited space for meaningful habitat creation.
- Existing habitats need to be retained, but there is insufficient land available for the required additional gains.
- The development has a relatively small footprint but still needs to meet its BNG requirement.
- The most appropriate habitat improvements cannot realistically be delivered within the development boundary.
Where the required gain cannot be achieved on site, developers may need to deliver biodiversity gains elsewhere, either on land they control or through purchased off-site biodiversity units.
Off-site habitat creation or enhancement must be properly secured and maintained. Under the current BNG framework, off-site gains must be maintained for at least 30 years.
What Should Developers Consider When Planning Biodiversity Offsetting?
Start With the Existing Site
The first step is understanding the biodiversity value already present.
A baseline assessment identifies existing habitats and provides the information needed for the biodiversity metric. This can help the design team understand where biodiversity value is concentrated and where impacts can potentially be avoided.
Starting this process early can give developers more opportunities to adapt the layout and incorporate biodiversity into the scheme rather than trying to retrofit measures later.
Look for Opportunities On Site
Where practical, biodiversity should be incorporated into the development itself.
Depending on the site, opportunities may include:
- Creating or enhancing habitats.
- Retaining valuable existing vegetation.
- Introducing native planting.
- Improving ecological connectivity.
- Creating areas of habitat within wider landscape schemes.
- Incorporating green infrastructure into the design.
The right approach will depend on the site's existing habitats, development layout, ecological objectives and planning requirements.
Consider Off-Site Solutions Early
Where on-site delivery is unlikely to provide all of the required biodiversity gain, it is worth considering off-site options early in the design and planning process.
Off-site biodiversity gains can involve the creation or enhancement of habitats on another site, with the resulting biodiversity units allocated to a development.
Early consideration is important because availability, habitat type, location, unit requirements and long-term management arrangements can all affect whether a particular option is appropriate. Developers should also consider how any off-site gains will be legally secured and maintained for at least 30 years.
Allow for Long-Term Management
Biodiversity gains are not simply a one-off landscaping exercise.
Habitats need to be established, managed and monitored so that they can achieve and maintain their intended condition. Under the statutory BNG framework, qualifying on-site and off-site gains must be secured for at least 30 years.
Developers should therefore consider establishment, maintenance and long-term management requirements alongside the initial project costs.
Biodiversity Gain Plans & the Planning Process
For developments subject to the biodiversity gain condition, achieving biodiversity net gain is not simply a matter of calculating biodiversity units. Developers must also demonstrate how the required gain will be delivered and secured.
What Is a Biodiversity Gain Plan?
A Biodiversity Gain Plan is the document that sets out how a development will achieve its biodiversity net gain requirement. It is submitted to the relevant planning authority after planning permission has been granted and must be approved before development can begin.
The plan must demonstrate how the development will achieve the required biodiversity gain. This includes information such as:
- The steps taken to minimise the development's impact on biodiversity.
- The pre-development biodiversity value of the site's habitats.
- The post-development biodiversity value of on-site habitats.
- Any registered off-site biodiversity gains allocated to the development.
- Any statutory biodiversity credits purchased for the development.
Developers should therefore consider their BNG strategy early rather than waiting until after planning permission has been granted. Early discussions with the relevant planning authority can help identify the information and approach likely to be required.
What Role Does the Local Planning Authority Play?
The local planning authority (LPA) has an important role in the BNG process. In most cases, the LPA that granted planning permission will determine the Biodiversity Gain Plan.
The LPA must be satisfied that the plan accurately reflects the development's biodiversity value and demonstrates how the required gain will be achieved. This includes checking the proposed on-site biodiversity gains and, where applicable, that registered off-site gains have been allocated to the development or that statutory biodiversity credits have been purchased.
The LPA must approve the Biodiversity Gain Plan before the development can begin.
This makes it important for developers to consider BNG requirements throughout the planning process, rather than treating biodiversity as a separate exercise once the development design has been finalised.
How Are Biodiversity Gains Legally Secured?
Biodiversity gains need to be secured and maintained for at least 30 years, so developers also need to consider how the required habitat management commitments will be legally secured.
There are two main types of legal agreements used for BNG:
- Planning obligations under Section 106: An agreement between the landowner and the local planning authority, which can be used to secure on-site or off-site biodiversity gains.
- Conservation covenants: A legal agreement between a landowner and a responsible body, providing another mechanism for securing biodiversity gains.
The appropriate mechanism will depend on the circumstances of the development and the land on which the biodiversity gains are being delivered. In either case, the agreement commits the relevant parties to creating or enhancing habitats and managing them for at least 30 years.
Can Landscaping Contribute to Biodiversity Net Gain?
Landscape design can play an important role in creating better conditions for biodiversity within development projects.
However, it is important to distinguish between features that provide biodiversity benefits and measures that can formally be counted towards a project's statutory BNG requirement.
A planting scheme or green infrastructure feature may support pollinators, provide shelter or food for wildlife, improve ecological connectivity and contribute to wider environmental objectives. Whether a particular feature can be included within a statutory BNG calculation will depend on the relevant metric, habitat classification and project circumstances.
This is why biodiversity considerations should be integrated into the wider development strategy rather than treated as a standalone landscaping decision.
At Scotscape, we are particularly interested in the role that nature-based solutions can play within urban environments. Our research has included work with the University of East London investigating the biodiversity net gain potential of LivingPillars®, while our micro forest solutions are designed to introduce diverse native planting and habitat into urban spaces.
Biodiversity Offsetting & Urban Development
Urban development can present a particular challenge because available space for conventional habitat creation may be limited.
This makes thoughtful green infrastructure increasingly important. Depending on the project, opportunities can include larger-scale landscape schemes, urban woodland, planting, living walls, and other forms of nature-based infrastructure.
These interventions can provide benefits beyond biodiversity, including supporting pollinators, improving the experience of green space, contributing to climate resilience and helping connect people with nature.
Scotscape's micro forests, for example, are designed around diverse native planting and can create concentrated areas of urban habitat where space permits.
Biodiversity Offsetting Advice for Your Development
The terminology around biodiversity offsetting has changed, but the underlying principle remains important: development should seek to avoid and minimise biodiversity impacts before compensating for losses that cannot be addressed on site.
At Scotscape, we provide green solutions designed for a range of development and urban environments. From living walls to landscape maintenance, we can help explore opportunities to bring more nature into your project.
Get in touch with Scotscape to discuss your biodiversity and landscape requirements.
