Top 5 Predictions for BNG in 2025
As we embark on a new year here at Belmont, we’ve been reflecting on what 2025 might hold for BNG. It’s an exciting time for this emerging market, and we have been following new trends and political developments with great interest.
Here are our top predictions for how the BNG landscape could develop over the next 12 months.
1. Increased demand for offsite bng solutions
We are expecting to see more and more demand for offsite BNG solutions in 2025. This will be driven in part by large construction projects looking for a blend of onsite and offsite solutions. And from November 2025, BNG will also apply to Nationally Significant Infrastructure Projects (NSIPs). We are therefore likely to see large infrastructure companies like National Highways and National Grid looking for offsite solutions where they cannot meet BNG onsite.
In response to this demand, we also expect to see an increase in the number of habitat banks coming to the market this year. Currently, there is a backlog of applications for providers awaiting official BNG registration. However, we expect to see more resourcing for LPAs to process S106 and conservation covenant agreements. A growing knowledge and understanding of BNG within LPAs should help to speed things up, with the number of responsible bodies able to verify them increasing from six to twenty-one last year.
2. More sophisticated pricing across the market
This is a prediction that we are hoping to see. Currently, some providers are pursuing unsustainable pricing models. But the truth is, there is a cost to delivering BNG, and that cost is a good thing. It means that real and sustainable long-term plans are being made and delivered to protect and nurture habitats. When it comes to BNG pricing, if it feels too good to be true – then it probably is.
The danger with race-to-the-bottom pricing in BNG is that long-term care and maintenance are not adequately considered. At the moment, because most BNG projects have yet to reach maturity, few have learned by experience the importance of long-term care.
In 2025 we hope to see better education across the market about the true costs of long-term delivery. Ultimately, the more BNG trading that is done, the more informed, predictable, and stable the market will get.
3. More large-scale partnerships for bng delivery
We predict that in 2025 there will be a growing trend of large corporates and investment companies entering into strategic partnerships with reputable delivery partners or offsite providers.
Investment in nature-based solutions offers corporates a significant opportunity to demonstrate that they can see the long-term value of investing to become ‘Nature Positive’. Alongside this, the Taskforce for Nature-Based Financial Disclosures (TNFD) has launched its beta version of the TNFD framework, which is expected to catalyse investor action in a similar way to the Task Force on Climate-Related Disclosures (TCFD). There are also significant financial opportunities involved, with the World Economic Forum predicting that the global demand for voluntary biodiversity credits could reach $69 billion by 2050.
Therefore, big businesses will now be looking for long-term, trustworthy partners that can deliver impact beyond just BNG regulations. We can see that this has already begun happening. Examples include Barclays teaming up with Environment Bank and Candy Crush investing in Earthly’s biodiversity scheme. This is a trend we welcome and hope to see continuing in 2025 and beyond.
4. Further integration with local nature recovery strategies (LnrS’s)
Following the formation of the West of England LNRS – the first established in the country – the remaining 47 responsible authorities will be developing their own LNRSs. This will create more opportunities for more biodiversity net gain projects to pop up in these areas and benefit from uplift and partnerships.
LNRSs will support offsite BNG delivery by helping to establish key, evidence-based locations for biodiversity projects. Furthermore, LNRSs will feed into the ‘strategic significance’ multiplier within the biodiversity metric. This will give developers an incentive to align their projects with LNRSs, and we may also see local authorities favouring BNG units that demonstrably contribute to LNRS strategies.
5. Tweaking and refinements of policy frameworks and guidance
The establishment of a new Labour Government in July of last year has seen new ambitions for house building – with Labour pledging to build 1.5 million new homes. In a recent working paper on the topic, they outlined plans to create a Nature Restoration Fund that developers can pay into to outsource the delivery of positive onsite environmental outcomes. Specific environmental impacts will be managed and mitigated by a third-party partner such as Natural England. The idea is that developers will be able to begin construction quicker and with less red tape, but without shirking their conservation responsibilities.
The government has stressed that this initiative will be separate from BNG and has restated its support for BNG. But as part of the overall planning and conservation landscape, it will be interesting to see how it interacts with BNG legislation and whether there will be any tweaks to policy frameworks. We also expect that new guidance will be issued that could be relevant to developers seeking and carrying out BNG assessments.
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