Draft copy 16/08/2023

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Why do we need this action plan?

Recent Government briefings have indicated a new attempt to scrap nutrient neutrality requirements. The suggested mechanism for removing nutrient neutrality will hit significant legal barriers. Using the Levelling Up and Regeneration Bill (LURB) to “forward count” reductions in nutrient pollution due to improved wastewater treatment is not compatible with the Habitats Regulations. Amending the Habitats Regulations to allow this will have far-reaching consequences for development across the country, inevitably triggering legal challenges. A more comprehensive overhaul of the Habitats Regulations to allow “forward counting” will require further legislation and take time to deliver.

The nutrient mitigation market has advanced considerably over the past two years. The industry has proposals to deliver 72,000 houses of mitigation, with more mitigation schemes being brought forward all the time.

We believe the fastest and most sustainable resolution to nutrient neutrality is using nature-based solutions to bring forward nutrient mitigation schemes. These schemes not only discharge the requirements for nutrient neutral development but can also deliver a raft of additional benefits to biodiversity, flood risk, water quality and water quantity.

Greenshank Environmental propose the following Action Plan to support the rapid delivery of a sustainable solution to this crisis.

The core aim of this action plan

Improve confidence for scheme providers and   enable faster deployment of solutions to create liquidity of mitigation   supply

How we propose delivery of this aim

To deliver the core aim of this plan, we propose a set of six actions:

1. Frameworks and standards to underpin a toolbox of mitigation methods.
2. Streamlined legal mechanisms to link mitigation schemes to planning permissions.
3. Simple nutrient mitigation sales contracts.
4. Councils adopt an official role in supporting the market.
5. Guidance on derogations and compensation to bring forward some development in the hardest hit areas.
6. Making key datasets available to support mitigation scheme delivery.

Actions 1-3 are priority actions that will help to drive a large increase in mitigation supply.

Action 4 will help to simplify local mitigation markets and support the creation of Council-owned mitigation banks, with mitigation created in a cost-effective way.

Action 5 may provide a mechanism for some development to be consented in areas with the most significant need, prior to nutrient mitigation schemes coming online.

Action 6 will help practitioners to better target good locations for scheme deployment.

We also provide links between these actions and the delivery of wider nature recovery programmes

Action 1: A set of frameworks and standards to underpin an agreed toolbox of mitigation methods

What we have now

• Current consensus on wetlands, fallowing and SuDS as mitigation methods.
• A framework for the production of proposals for wetlands for nutrient mitigation.
• Guidance on the use of SuDS for phosphorus removal.

What we need

• Consensus on a larger toolbox of mitigation methods:
  • Riparian buffers
  • Beaver dam analogues / beaver reintroduction
  • Drainage ditch management
  • SuDS for nitrogen removal
• Standardised and agreed approaches to the delivery of these methods and fallowing schemes for habitat creation.

Why we need this

• Provides certainty to mitigation scheme providers that mitigation methods will be acceptable, if proposed well.
• Allows mitigation providers to align mitigation proposals to standards / frameworks so they can be approved faster by statutory bodies.
• Speeds up delivery of mitigation solutions.
• Increases the volume of opportunities for deployment.

Core stakeholders

• Natural England
• Environment Agency
• Mitigation scheme designers
• British Standards Institute

Action 2: Streamline legal mechanisms to link mitigation schemes to planning permissions

What we have now

• Long process of getting mitigation schemes legally bound to planning permissions.
• Different planning authorities seem to have different approaches to the same problem.
• Delays in mitigation schemes being available to the market.

What we need

• Government support to allow LPAs to generate a standardised legal approach for linking mitigation schemes to planning permissions.
• Use learning from councils in Somerset, the Solent and Herefordshire who have more advanced legal procedures to support mitigation provision.
• Provide Nutrient Neutrality Assessment and Mitigation Strategy templates for use with legally secured schemes, in a similar manner to Biodiversity Gain Plans.  

Why we need this

• Reduce time taken to bring mitigation schemes to market.
• Provide confidence to LPAs that mitigation schemes have the required legal backing, including long-term maintenance and monitoring
• Provide a simple template so that developers can show how they are meeting nutrient neutrality requirements.

Core stakeholders

• LPAs
• Legal advisors
• Landowners / mitigation scheme providers
• Developers

Action 3: Simple nutrient mitigation sales contracts

What we have now

• There are no template sales contracts for nutrient mitigation.
• Transactions between nutrient mitigation providers and buyers can be very slow.

What we need

• Government to provide confidence in the longevity of the mitigation market, which will underwrite the value of this action.
• A forum of mitigation providers, brokers and buyers to determine a set of templates that cover the requirements of all parties involved in mitigation transactions.
• Legal support to develop templates that can simplify contracts for nutrient mitigation sales.

Why we need this

• Confidence in the market will support actions to reduce the friction associated with the nutrient mitigation transaction process.
• Increase the speed with which developers can procure mitigation and thus meet nutrient neutrality requirements.
• Reduce costs associated with mitigation provision for all parties, helping to drive down the cost of mitigation.

Core stakeholders

• Mitigation scheme providers / broke
• Developers
• Legal advisors

Action 4: Councils adopt an official role in supporting the market

What we have now

• There is a broad consensus on allowing the nutrient mitigation market to deliver the mitigation needed to support nutrient neutrality.
• Councils seem unsure about how to participate in supporting mitigation provision.
• Councils find it hard to acquire land to deliver schemes.
• They want to bring schemes forward themselves but are limited in their ability to act commercially and generate profit from schemes.
• Councils have paid significant values for land out of desperation and lack of guidance.
• Many council schemes are therefore either very high cost with significant risks, or they end up undercutting the market rate for mitigation.
• Council schemes priced at less than the market rate for mitigation will distort the market and disincentivise private mitigation provision.

What we need    

• Councils commit to a strategy of co-investing with landowners, rather than trying to acquire their land.
• Councils should be proactively engaging landowners to drive the co-investment strategy.
• The co-investment will cover consultancy and professional fees, deployment and Natural England costs.
• Councils co-invest based on a cost per kilo of mitigation ratio, enabling funding to be targeted at cost-efficient schemes.
• Council investment is returned as a priority from revenue generated by the scheme.
• Councils get preferential access to a percentage of the mitigation generated from schemes in their area at a discounted rate to generate a council-owned bank of mitigation.
• Councils will aim to create competing schemes in each catchment to drive the price of mitigation down via market forces rather than market interventions.

Why we need this

• Provides confidence for the mitigation market.
• Removes land acquisition barriers which slow down scheme deployment.
• Scheme providers get some guaranteed income to help schemes reach breakeven point.
• Reduces the cost of mitigation.
• Councils can use their bank of mitigation to provide mitigation for small developers who struggle to access the market and to support social housing delivery.

Core stakeholders

• Councils / local planning authorities
• Landowners / mitigation scheme providers

Action 5: Guidance on derogations and compensation to bring forward some development in the hardest hit areas

What we have now

• There is an awareness the derogations process under the Habitats Regulations could be used to allow some development to come forward. However, it has not been used in the context of nutrient neutrality.

What we need

• As highlighted by Freeths, LPAs and Planning Inspectors need guidance on when derogation tests can be applied.
• An agreed scheme where developers pay a premium to fund compensation, similar in concept to statutory Biodiversity Net Gain units.
• A requirement for compensation schemes to result in betterment in affected Habitats Sites.
• A mechanism for mitigation providers to access the compensation fund to support mitigation scheme delivery.

Why we need this

• Derogations could allow development to restart in some of the worst affected areas while compensation schemes come forward.
• Compensation funds will provide financing and an incentive to mitigation scheme providers, supporting deployment of schemes as providers know money is available to purchase the nutrient compensation a scheme will generate.

Core stakeholders

• LPAs
• Legal advisors
• Developers

Action 6: Making key datasets available to support mitigation scheme delivery

What we have now

• Key datasets that could assist in scoping mitigation schemes are not publicly available.

What we need

• Government support for the public release of the following datasets:
  • Ordnance Survey Water Network Layer
  • OS MasterMap Topography Layer® Imagery @ 1:2500
  • GIS data on water courses managed by Internal Drainage Boards
  • All data held by water companies on nitrogen, phosphorus and flow rates in discharges from wastewater treatment works in affected catchments.

Why we need this

• These datasets can be used along with other freely available data to ID appropriate locations for mitigation schemes.
• Making these data publicly available will speed up the provision of nature-based nutrient mitigation solutions.
• These datasets will enable better spatial planning of the best locations to deploy mitigation schemes.

Core stakeholders

• Water companies
• Ordnance Survey
• Internal Drainage Boards  

Linking the public, third- and private sectors to support wider nature recovery programmes

Many nature recovery schemes may deliver some benefit for nutrient mitigation and management. However, nature recovery schemes that do not have nutrient mitigation as a primary objective may only deliver a small amount of mitigation as an ancillary benefit.

At present, the costs of delivering, legally securing and then selling small amounts of nutrient mitigation is prohibitively costly. This may prevent public sector bodies, NGOs and other organisations from realising a potential financial benefit from nature recovery schemes that are not primarily aimed at delivering nutrient mitigation.

Delivering this action plan will support the   provision of nutrient mitigation and nature recovery programmes across the public,   third- and private sectors.

• With a ratified toolbox of methods with simple frameworks for their deployment,   nature recovery schemes can apply these tools to understand nutrient   mitigation potential easily and cheaply.
• With a simplified legal process for securing nutrient mitigation and templates for   nutrient mitigation transactions, the legal costs associated with selling   nutrient mitigation will be reduced.
• With simplified sales contracts for nutrient mitigation, it will be easier and   cheaper for mitigation and nature recovery schemes to realise financial   benefits.
• These   outcomes will reduce the costs associated with bringing nutrient mitigation   to market, meaning nature recovery schemes can realise greater potential   value.
• Increasing the value of natural capital from   nature recovery schemes can in turn help to recoup costs and increase viability.  

Using nature-based solutions to create nutrient mitigation will require changes to environmental management. We recognise that to garner support from all sectors, mitigation schemes need to be proposed with integrity. The integrity of mitigation schemes can be supported by aiming to achieve the following goals:

1. Deliver multiple environmental benefits aligned to wider nature recovery plans.
2. All interventions should be nature positive.
3. Where uncertainty arises, apply the Precautionary Principle.
4. Achieve betterment where possible.
5. Work in partnership across sectors to deliver multiple benefits.

Although the focus of this action plan is on how the private nutrient mitigation market can be supported, the private market should not supplant public investment. By creating toolboxes and frameworks for the deployment of nature-based solutions, we see support of the market in the short-term as having long-term benefits to the delivery of nutrient mitigation and nature recovery schemes.

This plan was produced by:

Dr Gabriel Connor-Streich, CEO, Greenshank Environmental

Kim Connor-Streich, CCO, Greenshank Environmental

This is a draft document and we welcome feedback on the action plan.

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