Nutrient Neutrality bust: a rebalancing of priorities, or a red flag for ecosystem markets?
Kathryn Brown
Sep, 08 2023 2 min readThe concept of ‘nutrient neutrality’ arose in 2018, following an interpretation of the EU’s Habitat Directive. Since then it has expanded to 75 local planning authorities in England, holding back development unless nutrients from the proposed scheme can be mitigated. Last week, the government announced a proposal to alter the Levelling Up and Regeneration Bill, effectively scrapping nutrient neutrality. For land managers, the removal of this market represents the loss of potential income through selling credits of mitigated nutrients to enable development.
Whilst all is not lost for farmers who were looking to benefit from nutrient neutrality (some land managers can be part of the statutory credit scheme or benefit from the additional rounds of funding for sewage infrastructure), some see this announcement as a turning tide in attitude. However, Defra estimates that of the three largest drivers to water quality degradation, outside physical modification of watercourses, agricultural pollution impacts the most watercourses (40%). Was it right that agriculture was looking to provide mitigation services to development when the statistics suggest it doesn’t have its own house in order?
Concerns are now being raised about the other emerging ecosystem markets, particularly Biodiversity Net Gain (BNG) as this could also impact housing delivery when it comes into force in November 2023. If BNG proves to be another ‘red tape’ to development, will the government also look to scrap it? In a post BPS era, where the government is actively trying to encourage private finance to deliver environmental outcomes, last week’s announcement could be seen as a step backwards for landowners and pulls into question the suitability of these alternative markets.
However, BNG is not an inherited piece of legislation from the EU, but part of the Environment Act 2021. It has undergone debate in Parliament, impact assessments and had a two year long lead time and, therefore, has a stronger foundation than nutrient neutrality. The BNG market is not perfect and, over time, will no doubt evolve. However, it is likely to be a stepping stone to a much larger change in biodiversity management, making it a key opportunity for land managers to explore.
