This briefing considers the Government's proposals for net gain for marine projects – Marine Net Gain (MNG). This follows on from our previous two briefings considering Biodiversity Net Gain (BNG) in the context of TCPA schemes[1] and Nationally Significant Infrastructure Projects (NSIPs)[2] respectively.

Introduction

As for NSIPs, the mandatory BNG regime in the Environmental Bill was not intended to apply to marine projects. Unlike for NSIPs, the Bill was not amended to extend the BNG requirement to marine projects. However the Environment Act (2021 Act) does include a power for the Secretary of State to make regulations to do this in the future[3].

Hot on the heels of the consultation on the implementation of BNG, DEFRA has now launched a discrete consultation on MNG[4], which runs to 30 August 2022.

First principles

Reflecting the fact that the Government was not ready to introduce a BNG requirement for marine projects in the 2021 Act, this is very much a "first principles" consultation setting out the aims of net gain policy for the marine environment and seeking views on the scope and application of MNG. In this regard, the paper seeks to define MNG by the following nine "principles":

1. MNG to measure impacts on habitats and species – acknowledging the dynamic nature of the marine environment, the consultation paper proposes including offsite impacts.

2. MNG to incorporate environmental benefits - the paper proposes that MNG should expand on BNG to incorporate a wider environmental net gain (ENG) approach that seeks to include the social, environmental and economic value of natural assets where these extra benefits are underpinned by biodiversity.

3. MNG to take a 'nature first' approach: In seeking to adopt an ENG approach, the Government proposes to embed a 'nature first' principle into its treatment of non-biodiversity impacts, so that the primary focus would still be on marine nature recovery and enhancement whilst allowing for the wider environmental benefits of proposed interventions to be valued.

4. MNG assessments to exclude uncertain incidental impacts – by way of example the paper cites the 'artificial reef' effect whereby marine infrastructure can be colonised by marine organisms leading to the creation of new habitats and ecosystems, but the effect of which is uncertain and not necessarily positive.

5. MNG requirements to be proportionate and appropriate to the scale and type of development.

6. MNG to be mandatory with limited exemptions – specifically the consultation envisages the MNG requirement "covering nearly all new marine development in English waters".

7. MNG to incentivise active interventions and pressure reduction measures – the paper explains that some ecosystems have a natural tendency towards recovery and therefore pressure removal (such as recovering marine litter) can have an important role to play, as well as active restoration, replacement and enhancement projects.

8. MNG to incentivise strategic interventions – in acknowledgment that site-based interventions may not always be appropriate or desirable, the paper envisages developers having the flexibility to bring forward either site-based or strategic interventions.

9. MNG to allow for improvements to designated and non-designated features of Marine Protected Areas (MPAs) – net gain interventions will be permitted within MPAs if opportunities outside these areas are not feasible.

A levy-based approach?

Whilst the paper commits to further consultation on mechanisms for measuring and assessing impacts, in the first instance it proposes a contributions-based approach. This "would operate like a levy on marine development and would be a relatively quick and straight-forward mechanism to introduce", with the Government intending to "build in more sophistication" as its understanding of MNG grows.

Little detail is provided as to how the proposed levy would work in practice, save that the financial contributions would be managed through the Marine Recovery Fund to fund environmental enhancement or restoration projects.

The biodiversity metric

The consultation paper indicates that, in the meantime, the Government intends to adapt the biodiversity metric to be applicable to the marine environment as part of developing a more sophisticated approach to MNG.

The paper explains that the principles embedded in the current metric "do not precisely correspond" with MNG since the metric was developed by Natural England to assess the impacts of habitat change associated with terrestrial development. The Government therefore considers that further work is required to understand the technical issues associated with applying a metric approach to the marine environment.

For this reason the Government does not necessarily envisage the contributions-based approach being completely replaced by a metric approach, indicating that it is open to a possible hybrid approach, e.g. using "a metric-type tool to assess the environmental component of a contributions-based assessment".

Interaction with BNG

In terms of interaction with land-based BNG, the consultation paper makes it clear that there should be no doubling up of net gain requirements with BNG applying to onshore and intertidal developments down to the Low Water Mark and MNG only applying to development below the Low Water Mark.

Commentary

There are now three net gain regimes in prospect: The BNG regime for TCPA development, the BNG regime for NSIPs and the MNG regime for marine projects. Each one is at a different stage of implementation, with notably the Government still working out key concepts in respect to the latter two regimes.

MNG is still very much at the early conceptual stage and, unlike the two BNG regimes, currently has no proposed implementation date. However, it is plain that the Government intends MNG to be a wider concept than BNG and for interventions to be less site-focussed than BNG (due to site boundaries having less meaning in the marine environment). It also appears that, in its initial implementation phase at least, the Government proposes MNG to be a levy based system.

In this regard the consultation acknowledges that less is known about the marine environment than terrestrial or inter-tidal. The Government's current proposals therefore appear to be designed to give developers greater wiggle room to demonstrate marine net gain, at least until an appropriate metric has been developed for use in connection with the marine environment.

Whilst the MNG consultation paper indicates that there should be no doubling up of the BNG and MNG regimes, for projects with both land and marine elements (e.g. interconnectors/offshore windfarms with onshore convertor stations/grid links/etc), it appears that the Government's intention is for the relevant net gain regime to apply to the relevant element. This will mean that such projects will need to comply with both regimes. This will undoubtedly add complexity – and cost - to these projects, although given the early stage that MNG is at, this future complication is perhaps some way off.

In the meantime, one thing is certain: There is more consultation on MNG to come.