The government must not unravel Biodiversity Net Gain for small sites – Inside track

This post is by Philip Box, senior policy officer at Wildlife and Countryside Link.

There seems to be a troubling contradiction in current government thinking on nature recovery. Ministers say they want the private sector to play a far greater role in restoring the natural world and have launched a call for evidence on increasing private investment. Yet, at the same time, they are considering changes to their Biodiversity Net Gain (BNG) policy that would undermine one of the very markets capable of delivering that vision. If ministers genuinely want private finance to support nature, they must provide a stable policy framework, and not leave the rules in doubt at a time the market is still trying to find its feet.

BNG is working
BNG isn’t perfect, but it is working, and small development sites are central to that success. Individually modest but collectively significant, they generate a steady stream of BNG transactions and provide dependable demand for biodiversity units (BUs).

Markets need consistency to thrive, and early BNG suppliers have warned that large developments do not appear frequently enough to sustain long term investment on their own. It is the steady flow from small sites that gives landowners, farmers, charities and habitat managers the predictability needed to plan nature recovery. Remove that consistency, and investment stalls.

Small sites also matter because many developers cannot meet BNG requirements on-site. Research (Duffus et al, 2025) shows they therefore contribute disproportionately to the off-site BU market. Their removal would hit smaller, budding BU suppliers hardest; those least able to absorb sudden income shocks or plan amid volatility. It’s a risk that directly contradicts the government’s stated ambition to unlock more private finance for nature.

Ease the burden on the smallest sites
A practical solution already exists. Conservation bodies, planners and industry have proposed exempting only the very smallest developments, those under 0.1 hectares, while keeping a streamlined, functioning system for all other sites. This approach replaces the more complex impact based threshold with a simple area threshold and strengthens enforcement to close existing loopholes. It eases burdens on micro-developments without hollowing out BNG. Crucially, it aligns with the government’s previous definitions and would signal the policy stability investors expect.

The case for the 0.1 ha threshold is compelling. It would more than double BU demand, remove obligations from over 50,000 small developments each year, and close loopholes exploited by larger ones, contributing an additional 20,000 hectares annually to nature recovery, while supporting around £250 million in economic activity and 2,450 full time jobs. It protects both nature and the market without burdening the smallest developments.

Don’t gut the market
Compare that with the government’s earlier suggestion to exempt all small sites, which would have removed 97 per cent of development from BNG and stripped out more than 24,000 hectares, nearly 35,000 football pitches, of potential nature gains every year. This would gut the BNG market, collapsing demand.

The rumoured alternative, a 0.5 hectare threshold, would be little better. Two thirds of BNG applications would fall out of scope relative to 0.1 hectare, and more than 4,000 extra hectares a year would be developed without nature improvements. Market value could shrink by £50 million annually, shaking investor confidence just when public finances most need private capital to meet legally binding nature targets. Over 80 businesses and environmental organisations have united to stress that this would be ‘ruinous’.

The truth is simple, small sites are not an inconvenience to be carved out; they are the backbone of the BNG market. Undermining them would weaken nature recovery, destabilise investment and dismantle one of the clearest examples of development supporting biodiversity rather than degrading it.

If the government wants private sector led nature recovery, it must stop undermining BNG and start reinforcing it. The 0.1 hectare threshold offers a stable, fair and effective system, one that delivers genuine win-wins for nature and development. Now is the moment to strengthen that system, not pull on the thread that holds it together.