Biodiversity Net Gain and Section 106: How BNG Obligations Are Secured

Biodiversity Net Gain (BNG) became a mandatory planning condition in England for major development from 12 February 2024 and for most small sites from 2 April 2024. Every planning permission granted for development to which the requirement applies must deliver at least 10% biodiversity net gain, secured by legal mechanisms that bind the developer and any successor in title for at least 30 years.

For most developments, the legal vehicle that secures BNG is a Section 106 agreement (or a conservation covenant). This guide explains how BNG and Section 106 fit together — what the agreement has to contain, how it interacts with other planning obligations, and what developers and consultants need to prepare for.

This covers England only. This is general guidance, not legal advice. The legal framework around BNG is technical and evolving — always seek planning and legal advice.

The Legal Framework

BNG is mandatory under the Environment Act 2021, which amended the Town and Country Planning Act 1990 to include the requirement.

The framework:

A planning permission for relevant development is granted subject to a general biodiversity gain condition
The condition is met when a Biodiversity Gain Plan has been submitted to and approved by the LPA before development commences
The Biodiversity Gain Plan must show that the development achieves at least 10% net gain measured by the statutory biodiversity metric
The gain must be maintained for at least 30 years after delivery

On-site habitat that contributes to the 10% gain must be legally secured for the 30-year period. The two routes for securing it are:

A Section 106 planning obligation — the most common route
A conservation covenant entered into with a designated responsible body under the Environment Act 2021

The biodiversity metric used is the statutory biodiversity metric published by Natural England. Net gain is calculated as the difference between the pre-development biodiversity value and the post-development biodiversity value, with at least a 10% uplift required.

When the Mandatory Requirement Applies

The requirement covers most planning permissions for development in England:

Major development — mandatory from 12 February 2024 (broadly, 10 or more dwellings, or sites of 0.5 hectares or more, or commercial floorspace of 1,000 sqm or more)
Small sites — mandatory from 2 April 2024 (most non-major development below the major threshold)

Specific categories are exempted — including householder applications, development under Permitted Development Rights, certain self-build and custom housebuilding, and development on previously-developed land where biodiversity value is below a threshold. The detailed exemptions are set out in the regulations and PPG.

For most commercial and residential development above the householder scale, the requirement applies.

How BNG Sits in the Section 106

For most BNG schemes, the planning obligation does several things:

1. Identifies the Habitat to Be Delivered or Enhanced

The Section 106 specifies the habitat parcels — on-site and/or off-site — that contribute to the 10% net gain target. Each habitat parcel is identified by location, type, target condition, and the biodiversity units it contributes to the calculation.

2. Requires the Habitat Management and Monitoring Plan

The Section 106 (or the Biodiversity Gain Plan it references) requires the delivery of a Habitat Management and Monitoring Plan (HMMP). The HMMP is the operational document that sets out how each habitat parcel will be created, established, and managed over the 30-year period.

3. Triggers Delivery Milestones

The agreement sets trigger points for habitat creation and management activities:

Pre-commencement — submission of the HMMP, baseline ecological surveys, initial site works
First five years — establishment phase, with the habitat reaching defined condition targets
Years 5-30 — ongoing management to maintain or improve the habitat condition

4. Establishes the 30-Year Management Period

The Section 106 binds the landowner (and successors in title) to maintain the habitat for at least 30 years from the date the habitat is created or enhanced. This is the longest commitment in most modern Section 106 agreements — most other obligations have shorter time horizons.

5. Requires Reporting and Monitoring

Most BNG Section 106 agreements require periodic biodiversity monitoring reports — typically at years 2, 5, 10, 20, and 30 — to verify that the habitat is reaching and maintaining the target condition.

6. Sets Out Remedies for Underperformance

If a habitat parcel fails to reach the target condition, the Section 106 typically requires the developer to carry out remediation works, deliver replacement units, or pay a financial contribution.

On-Site, Off-Site, and Statutory Credits

The biodiversity gain hierarchy set out in the BNG guidance prioritises actions in this order:

Avoidance and mitigation of adverse effects on existing higher-distinctiveness habitats
Enhancement of existing on-site habitat — preferred where adverse effects can't be avoided
Creation of new on-site habitat
Allocation of registered off-site gains — secondary
Statutory biodiversity credits purchased from the government scheme — last resort

The Section 106 mechanism applies primarily to on-site obligations and off-site obligations delivered through private land arrangements (where the developer secures off-site habitat via Section 106 on the third-party land). Off-site units delivered through a registered biodiversity gain site administered by Natural England's register are secured separately.

For statutory credits, the mechanism is purchase rather than Section 106 — but the credits themselves only become available once on-site and off-site routes have been explored. Statutory credits are deliberately priced at a level intended to incentivise market provision of biodiversity gain.

How BNG Interacts with Other S106 Obligations

Land Use Competition

BNG on-site habitat takes land. On dense urban sites, this can create competition with other land uses — affordable housing, parking, open space (which is a separate obligation, distinct from BNG habitat). Schemes need to be designed with the BNG quantum in mind from the outset, not retrofitted at S106 drafting stage.

Open Space vs BNG Habitat

Recreational open space (formal play, sports pitches, amenity grass) is usually distinct from BNG habitat. BNG habitat needs to be ecologically functional — meadow, woodland, hedgerow, wetland — managed for biodiversity. A piece of mown amenity grass typically doesn't qualify as high-value BNG habitat.

Some integrated designs deliver dual-purpose habitat — sustainable drainage features that double as habitat, for example — but the BNG calculation needs to reflect the habitat quality.

Affordable Housing

Affordable housing obligations and BNG obligations are independent. Schemes deliver both. Where viability constraints affect the affordable housing percentage, BNG remains a mandatory minimum — it can't be negotiated below the statutory 10% threshold.

Highway Works

Highway works can affect the BNG calculation if they require the loss of habitat that contributes to the baseline. The biodiversity metric captures pre-development habitat including verges and trees affected by highway works, so highway design has to be costed into the BNG quantum.

The 30-Year Management Commitment

The 30-year period is the longest commitment in most modern Section 106 agreements. Several practical consequences:

Long-Term Funder

The Section 106 needs to identify who will fund the management activity for 30 years. Common arrangements include:

Developer-managed during build-out, transferred to a residents' management company at completion — with a service charge or commuted sum to fund the management
Sold to a habitat management organisation — specialist organisations that take on long-term management for a one-off payment
Council-adopted on transfer — less common for BNG; councils are cautious about taking on 30-year obligations without funding

Step-In Rights

Section 106 agreements typically include step-in rights — if the developer or successor fails to manage the habitat, the council can step in, carry out the works, and recover the costs.

Title Burden

The 30-year obligation binds successors in title. Any sale of the affected land within the 30-year period transfers the obligation to the new owner. Conveyancing solicitors need to flag BNG obligations during sale.

Land Registry Registration

The Section 106 is registered against the title at the Land Registry. The BNG obligation appears on the title until the 30-year period expires.

Practical Considerations for Developers

Quantify BNG Early

The biodiversity metric calculation needs to happen at scheme-design stage, not at planning-application stage. A scheme designed without BNG in mind can fail the 10% test and need expensive redesign — including additional land allocation or off-site provision.

Off-Site Costs Are Real

If on-site delivery isn't viable, off-site units have real costs. The market for biodiversity units is emerging and prices vary substantially by region and habitat type. Get current market pricing from the registered biodiversity gain sites that serve your locality.

30-Year Cost Modelling

Habitat management isn't free. Annual management costs for established habitat — depending on type and intensity — can run from a few hundred pounds per hectare for low-intervention habitats to several thousand for high-management habitats. Across 30 years, this is a significant commitment.

Section 106 vs Conservation Covenant

For some schemes, particularly those delivering large off-site habitat, a conservation covenant entered into with a designated responsible body may be a cleaner legal mechanism than a Section 106. Conservation covenants under the Environment Act 2021 are designed for long-term land management agreements and can be lighter-touch than full Section 106 agreements. Take legal advice on which mechanism is right for your scheme.

Trigger Points

BNG triggers in the Section 106 are typically before commencement (submission and approval of HMMP) and during the build (delivery milestones). Get the trigger structure right — too tight and you can't commence; too loose and the council loses control of delivery quality.

What This Means for Monitoring

For councils, BNG obligations add a long-tail monitoring duty. A Section 106 signed in 2025 that includes a 30-year BNG management period commits the council to monitoring habitat outcomes until 2055 or beyond. That's longer than most council monitoring officers' careers — meaning the obligation will be handed across multiple successor officers, each of whom needs the obligation record to be clear and reliable.

For the developer, this means the record-keeping discipline matters even more than for shorter-period obligations. A BNG obligation that's poorly documented at signing will be unmanageable 20 years later.

Summary

BNG obligations are secured through Section 106 (or conservation covenant) and bind the developer and successors in title for at least 30 years. The mandatory requirement applies to most major development from February 2024 and most small sites from April 2024. The Section 106 captures the habitat, the management plan, the delivery triggers, the long-term funding arrangement, and the remedies for underperformance.

For developers and planning consultants, BNG needs to be quantified at scheme-design stage, modelled across the 30-year management period, and structured into the Section 106 with realistic trigger points and funding mechanisms. The discipline of getting it right at signing pays back across decades.