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Nutrient neutrality is the requirement to ensure that any development does not increase the level of phosphate or nitrate levels in watercourses when developing land. This has become a key issue for developers and has had a significant negative impact on bringing sites forward for development.

Following the landmark Dutch N case, Natural England established several catchment areas for watercourses impacted by nitrate and phosphate pollution. In these areas, local planning authorities can only grant planning permission for developments where a habitat regulation assessment shows that the development will achieve net nutrient neutrality.

So, what do developers need to consider when looking at developments?

Identify if the site is actually in a catchment area

Not all sites are affected by nutrient neutrality issues, so developers should first check to see if a particular site is in a catchment area.

Identify what type of nutrients are causing concern

The level and type of mitigation required will vary depending on the type of nutrients causing concern. For example, in costal and marine areas such as the Solent, excess nitrates are the issue, whereas in inland freshwater environments such as the Somerset Levels it is phosphates.

The requirement for nutrient mitigation has undoubtedly had a significant negative impact on development within affected catchment areas

Calculate the level of burden

To assess the level of nutrient mitigation required, the development’s overall nutrient impact must be calculated. Natural England has provided a general methodology for this, but it often requires specialist support to prepare the calculation. If the calculation yields a positive number, mitigation is required.

Consider appropriate on- or offsite nutrient mitigation

On-site measures include incorporating wetland habitats or woodlands into the development and fallowing parts of the site to reduce the levels of nutrients. Offsite measures include similar mitigation but on land outside the development.

Difficulties with on-site mitigation

Developers have been grappling with on-site measures, as they are often land-hungry, which has an adverse impact on the level of development that can be delivered. It can also be difficult to demonstrate that the proposed measures (particularly when they involve creation of new habitats) will deliver the level of mitigation needed for a sustained period. Furthermore, the measures can require specialist skills to maintain the habitat created going forward, and the skills needed are often outside the usual remit of management companies.

Offsite mitigation

Many developers are seeking to enter into private agreements with landowners of nearby land to generate the required nutrient mitigation for a specific site. This solves some of the problems of on-site mitigation, but it can be challenging to identify suitable land in the correct catchment that will deliver the right level of mitigation. To overcome this problem and deliver mitigation measures at scale which are more meaningful in solving the underlying issue, larger landowners  – or intermediaries who have assembled landbanks – are undertaking schemes at scale within specified catchments and entering into private arrangements with developers to assign such mitigation measures to specified developments. This is a fast-developing area and is often delivered alongside biodiversity net gain requirements.

Nutrient credit scheme

In recognition of the problems that nutrient neutrality requirements are causing for development, there are proposals to create a nutrient credit scheme which will involve landowners and local authorities delivering mitigation measures in partnership and selling credits to developers. This statutory credit scheme is being developed in recognition that private landowner arrangements and on-site mitigation are not delivering solutions for a significant number of sites. Such a scheme will be a welcome option for developers but is likely to be one of the more expensive solutions and work is at an early stage. 

Get a habitats regulation assessment carried out

Once the need for mitigation and the appropriate measures have been identified, a habitat regulation assessment (HRA) will be needed to look at the plans for the development and mitigation proposals, to assess its impact on the waterway.

Following amendments to the Levelling Up and Regeneration Bill, there is now a legal duty for water companies to upgrade wastewater treatment works that discharge into protected watercourses. This is a key development as it will reduce the level of mitigation developers are required to implement.

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The requirement for nutrient mitigation has undoubtedly had a significant negative impact on development within affected catchment areas. Many developers have responded by focusing on sites that fall outside the catchment areas. However, this can mean that development is not necessarily being delivered where it is most appropriate.

A combination of the proposals for the nutrient mitigation scheme and a renewed focus on upgrading wastewater treatment, alongside the rapid development of specialist intermediaries offering large-scale mitigation schemes, will be key approaches in unlocking the challenges in this area.

Emma Honey is a partner in the real estate team and Ben Sharples a partner in the agriculture team at Michelmores