BNG for TCPA developments: key changes to the exemptions regime

The Regulations, which came into force on 6 August 2026, amend the Biodiversity Net Gain (BNG) exemptions regime for developments requiring planning permission under the Town and Country Planning Act 1990 (TCPA).

BNG, introduced under the Environment Act 2021, requires developments (with certain exceptions) to deliver at least a 10% increase in biodiversity value relative to the pre-development biodiversity value of the onsite habitat. It has applied to most TCPA developments since early 2024.

Notwithstanding its environmental benefits, BNG has represented a significant barrier to development for SME developers, in terms of both administrative burden and compliance costs. However, the Labour Government, then led by Prime Minister Keir Starmer, committed to supporting SME developers as part of its efforts to achieve the housing targets originally set out in its election manifesto.

These Regulations follow that Government commitment and are designed to alleviate those challenges by exempting the smallest developments and temporary developments from the mandatory BNG requirement, and by making it easier for small developers to access the offsite market.

This article addresses the key changes introduced by the regulations.

Development of 0.2 hectares or below

The Regulations introduce a new exemption from the BNG regime for developments carried out on a site with an area no larger than 0.2 hectares.

The exemption is subject to the condition that the development must not impact an onsite priority habitat.

A habitat is "impacted" where it is lost or degraded such that there is a decrease in its biodiversity value. Accordingly, where onsite priority habitat is negatively affected, the exemption will not apply and mandatory BNG must still be met.

Temporary developments

The next exemption introduced by the Regulations is for temporary developments. The exemption will apply where the following conditions are met:

• the development does not impact an onsite priority habitat;
• the whole of the permitted development consists solely of temporary development; and
• the specified period (i.e., the length of time for which planning permission is granted) does not exceed five years.

The exemption will not apply if multiple permissions for the same temporary development together exceed five years in total. This prevents the five-year limit from being sidestepped through successive short-term permissions.

Priority habitats

Both of the above exemptions are conditional upon the development not affecting “priority habitats”. These are habitats designated by the Government under the Natural Environment and Rural Communities Act 2006 as being of principal importance for the purposes of conserving and enhancing biodiversity. A list of those habitats can be found here.

Removal of the self-build and custom-build exemption and modification of the biodiversity gain hierarchy for minor developments

Following feedback that the exemption was difficult to implement and enforce, the Government has removed the existing exemption for small-scale self-build and custom-build developments. Accordingly, unless covered by an alternative exemption, self-build and custom-build developments must deliver BNG for new planning applications made on or after 6 August 2026. However, the loss of this exemption is balanced against the benefits provided by the Government’s adjustment to the biodiversity gain hierarchy for minor developments.

Currently, all developments must follow a strict step-by-step approach: first avoid harming distinctive habitats, then mitigate any impact, then enhance habitats onsite, then create new habitats onsite, then use registered offsite biodiversity gains, and only as a last resort purchase biodiversity credits from the Government.

Now, for non-major developments (e.g., residential developments providing fewer than ten houses, or industrial developments generating less than 1,000 sqm of internal floorspace), the new rules relax this approach by grouping onsite enhancement, onsite creation, and registered offsite gains at the same level of priority. Purchasing biodiversity credits remains the last resort. In practice, this means smaller developments that still fall within BNG (for example, sites over 0.2 hectares) can now opt for offsite solutions immediately, rather than having to exhaust all onsite options first.

Commencement and transitional provisions for the changes

All of the changes introduced by the Regulations apply only to applications for planning permission made on or after 6 August 2026. Applications already submitted, and permissions already granted, before that date will continue to be governed by the existing BNG rules. Similarly, they do not apply to Section 73 planning permissions where the application for the original planning permission was made, or the original planning permission was granted, before that date.

Conclusion

The Regulations represent a pragmatic recalibration of the BNG regime for TCPA developments, designed to reduce the disproportionate burden on the smallest developments and local planning authorities while maintaining the overall integrity of the mandatory BNG system. The Government considers that these changes will benefit the whole BNG system by focusing resources on larger developments, which have the greatest impact and therefore the potential to deliver the greatest benefits to nature.

These are the first in a series of changes announced in the Government's consultation response. Further regulations are expected to introduce additional exemptions, such as those anticipated for brownfield sites (the details of which, as at the date of this article, are yet to be fully determined).

Co-authored by Hareni Ayadurai