Defra Reimagines BNG for 2026: New Rules, Exemptions, and Opportunities

Last week Defra announced intent to bring forward the largest changes to Biodiversity Net Gain (BNG) since becoming mandatory in early 2024.

The BNG obligation is a planning requirement in England that implores new applications to provide an uplift in relative biodiversity value which is measured by habitat type and composition, to the tune of 10% after the development has been completed.

During a recent webinar, Natural England framed BNG as a globally impactful success and a vessel of “soft power and influence” abroad, with versions of the England metric very likely to be brought into Wales and Scotland, and similar systems now live and operational in North America and Europe.

However, throughout BNG’s mandatory period mixed reviews have emerged from developers, environmental professionals, and the wider planning application stakeholder chain. A perennial criticism, and one shared by Brown&Co’s Principal Ecologist Ryan Clark, is the often-disproportionate impact on small developments that BNG can impose. Due to certain niche aspects of habitat classification and the BNG legislative instruments, applications without the onsite space to offset can be caught by BNG rules and forced to pay large sums to third. party ‘Habitat Banks’ selling BNG Units commercially as a planning compliance pathway. Certain such cases have received significant local and national news coverage.

Framed within the wider context of a national spotlight on the UK’s generally slow, expensive and comparatively laborious planning system, environmental tranches of planning requirements have received particular scrutiny, such as the (in)famous HS2 bat bridge and Hinkley point C’s ‘fish disco’ leading headlines. The BNG teething issues, perceived or actual, have only added fuel to the fire and likely led to the latest changes.

The largest changes, planned before 31st July 2026, are an exemption of mandatory BNG for all developments under 0.2 ha and the removal of existing exemptions for self and custom build residential applications. 

The 0.2 ha was unofficially released by the government in December 2025, so came as no surprise to the sector. This update is undoubtedly intended to release the aforementioned pressure on small developments; comfortably removing BNG obligations on one or two home developments and leaving further potential up to the eight-home range.

Removal of self and custom build exemptions received much less foreshadowing, and its confirmation completes a double-edged sword for developers, wherein <0.2 ha sites receive a boon but others that would have been exempt over the last two years would now face an additional BNG hurdle. This will certainly lead to the paradoxical situation of certain applications being rushed in before July, and others put on hold to wait out the changes. 

Elsewhere, mandatory BNG inclusion for Nationally Significant Infrastructure Projects (NSIP) and a new committee on potential relaxing of restrictions on brownfield sites were also stated as an intent. Deeper in the government releases were indications that the spatial risk multiplier, an arm of the BNG calculation that gives penalties for using offsite offset at distance bands away from the Site, would be looked at and may move to adopt Local Nature Recovery areas, rather than the generally smaller Local Planning Areas or National Character Areas.

While the scale of impacts that these changes will have likely won’t be apparent until later in 2026 due to the real-world time that planning applications take to filter through the local authority systems, Ryan highlights that these changes are an overall sign that BNG and it’s general principle: leaving the natural environment in a measuredly better state than beforehand are now an accepted concept and here to stay.

Steers on NSIP inclusion and potential changes to spatial factor of BNG are likely significant signals and bullish overall for the Habitat Bank and offsite Unit market. There are now over 200 registered Habitat Banks in England with an estimated >£40 million of Units sold and allocated to developments to date.

To discuss BNG and other Natural Capital opportunities for landowners and land managers, or for support in planning applications, contact our in-house Ecology and Biodiversity Team.