BNG Exemptions: The Hidden Price of Misuse
When Biodiversity Net Gain (BNG) became mandatory inEngland in February 2024,ministers built in a handful of exemptions. They were never intended as anescape route for major schemes; they were designed to stop the new regime fromdrowning household extensions and genuine self‑builds in paperwork. Yet, withintwelve months, almost nine out of ten planning applications—87,981 out of a total 101,728—werefiled as “exempt” fromBNG.
If that headline sounds astonishing... well, it's because it is. Even moretroubling is where the claims are coming from. The government’s de minimis exemption was meant fortiny habitat losses—under 25 m², with noeffect on priority habitats. Common sense suggests that loophole should show upin the smallest plots. Instead, the eftec market‑analysis shows roughly 35 percent of proposals larger thanhalf a hectare (sometimes several hectares) still ticked the de minimis box. That is a compliance red flag the size of... well, half ahectare.
Why the wrong tick‑box is tempting—and dangerous
It is easy to see the attraction. Completing a metric, commissioning surveys,or negotiating off‑site Biodiversity Units (BUs) can cseem daunting. Theapplication form presents a neat alternative: a single click and the obligationevaporates. But increasingly we're seeing such misuse backfires on developers.Local planning authorities (LPAs) have started drawing a bright line undersuspicious exemption statements. A case officer need only glance at an OS mapto see that a “25 m²” impact claim on a 2‑hectare business park is implausible.Requests for additional information, batched re‑consultations and even totalrefusal to validate an application are becoming routine. Every time the clockresets, contractors sit idle and finance costs accumulate.
Suppose the scheme squeaks through validation but the LPA’s ecologist challenges the exemption at committee stage. Suddenly the developer must find compensatory habitat, buy units at short notice and redesign drainage or landscape layouts. Section 106agreements have to be rewritten. A BU market where supply remains tight—because so many applications claimed exemptions earlier—offers little cushioning on price. T Scenario modelling suggests that if erroneous exemptions were removed annual demand for BUs would rise by roughly 82 percent.
In other words, any developer forced to purchase late in that larger market risks paying a premium.
Legal exposure and reputational damage.
The Finch Supreme Court judgment reminded the industry that downstreamenvironmental impacts matter. Submitting an inaccurate exemption declarationcan be construed as providing misleading information to a public authority.LPAs hold enforcement powers; so do the Environment Agency and, on majorprojects, the Planning Inspectorate. At best, a public reprimand erodes ESGcredentials with funders; at worst, it triggers legal action or a stop noticeon site.
Land promoters and SME housebuilders often plan to sell sites with permission.A due‑diligence solicitor who spots a shaky BNG exemption will flag it as amaterial risk. The purchaser either chips the price or demands an indemnity. Aone‑click shortcut taken in the application phase can shave millions off theresale value eighteen months later.
The tightening enforcement net
Developers sometimes ask: “If everyone else is ticking the box, surely thesystem must come down on all of us equally?” The answer is that enforcement isalready becoming data‑driven. LPAs are increasingly making use of digitaltools to check how credible claims of exemptions are. LPAs share thosereports with ecologists, and Defra’s digital service maywell build similar prompts into future iterations of the statutorymetric.
What “getting it right” looks like
In practice, the cure is more mundane than dramatic. It starts with an honestbaseline survey, not a hunch. It includes running the Defra Metric even if thetotals are expected to come in below exemption thresholds: the calculationoften discovers unassuming hedgerows or seasonally wet grassland that elevate asite out of de minimisterritory. It ends with clear, dated records—photos,correspondence and habitat maos —so theexemption, if genuinely applicable, can be defended years later.
The bottom line
A year of statistics has laid bare what many planners suspected: widespreadover‑claiming of BNG exemptions is not a victimless shortcut. It hobbles thehabitat‑bank market, erodes policy credibility and, sooner or later, landssquarely on the balance sheets of the very firms that tried to save a buck.
If your project really does scrape under 25 m² of habitat impact with no priority features, the exemption is there to speed you through. If not, the safest—and ultimately cheapest—option is to treat BNG as a standard design parameter from day one. Invest in good advice, budget for the righ tnumber of units, and write a narrative that will survive inspection long after the ribbon‑cutting ceremony.
Because the real cost of ticking the wrong box is rarely the application fee;it is the months of inertia, the brusque phone calls from funders, the scramble for overpriced units and the public perception that your brand promises more for nature than it delivers. In the era of mandatory net gain, that is a price very few developers can afford to pay.