Nutrient Credits: An opportunity for farmers and landowners to assist developers unlock their assets

Nutrient Credits: An opportunity for farmers and landowners to assist developers unlock their assets

Baileys and Partners have recently assisted another local reputable agent on behalf of their client in the marketing and selling of Nutrient Credits (Nitrogen and Phosphorous) for developers to unlock their planning application obligations within the Catchment of which their developments form part.

Nutrient neutrality has become a practical issue for developers in England following a judgement by the European Court of Justice that any additional nutrient burden to ‘designated sites’ that were already in unfavourable condition would not be permitted by law. In 2019 Natural England issued guidance to local planning authorities that they should not grant planning permission to developments unless the impact from that development can be appropriately assessed to assess that it is compliant with the legislation that protects designated sites (namely the Water Framework Directive 2017 and Conservation of Habitats and Species Regulations 2017).

For developers in other parts of the UK, the issue is now becoming a practical reality, with devolved administrations and their County Councils having to address the practicalities of nutrient neutrality.

Developers within specific water catchments (such as the Stour Catchment) in England must calculate the nutrient impact of their development and obtain a solution to ensure that the development is ‘nutrient neutral’. ‘Nutrient Neutrality’ means that the nutrients from all surface water runoff and wastewater generated by the development must be less than or equal to the nutrients generated by the existing land use.

The solutions for nutrient neutrality can be a mix of onsite water treatment of wastewater and surface water runoff, upgrading local sewerage treatment works, taking land out of high nitrogen uses and converting to reedbeds, wetlands or woodlands.

The mitigation solution must be located as close to the development as possible and should be in the same sub-catchment.

For developers in the Upper Great Stour (a sub catchment of the Stour Catchment) there is now a new opportunity to fund woodland creation at Pleasant Forest, Lenham and receive nutrient credits. The nutrient credits are being achieved through the conversion of land from conventional agricultural land to woodland, with a reduction in the nutrient load due to the type of land use.

Whilst this particular opportunity is linked to the planting of trees, the important wider context and message is that there are opportunities for producing food from our land in a way that blends the need to protect our Natural Capital with the need to feed ourselves.

Farming is going through considerable, almost unprecedented, change at the moment and there is an urgent need to look at other income streams to replace those lost as we leave the Common Agricultural Policy and the support that it gives.

Food production and food security must remain one of the prime uses of agricultural land in the UK, but this shows that whether it is planting trees, producing food in a more environmentally sensitive way or any one of a myriad of other possibilities the opportunities will be there.

The requirement for Nutrient Neutrality is likely to be a useful income opportunity to farmers and land managers and as the concept becomes more established the solutions may evolve in terms of other land uses such as reducing inorganic nutrient applications, or conversion to organic status.

The opportunities for landowners will be much wider than one type of ecosystem service of which nutrient neutrality falls under ‘water quality’. For example, it may be possible for a landowner to sell the woodland carbon sequestration benefits to a different investor, or the biodiversity net gain to a third investor or developer. That investor might be the same as they may have requirements for carbon reduction and biodiversity net gain obligations.

Again, carbon sequestration can be achieved in many ways, and not just the planting of trees, so numerous other options will arise.

In this evolving market the need for transparency and avoiding double funding is important. Farmers are well advised to ensure that the detail of the agreements are scrutinised so that they are achieving the maximum out of the available ecosystem service benefits of the natural capital asset.

The following counties in England have catchments which have this legal obligation;

  • Kent
  • Hampshire
  • Dorset
  • Wiltshire
  • Herefordshire
  • Somerset
  • Cornwall
  • Suffolk
  • Essex

If you wish to know more about the natural capital work which Baileys and Partners are involved with or the opportunities that exist in this sector then please do not hesitate to contact us

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