Nutrient Neutrality Update 01.11.2023

Key Updates

• Norfolk Environmental Credits Ltd (NEC) will be releasing the first set of credits for the River Yare catchment in November.

• No target date has been set for the Bure and Wensum Catchments.

• Site information must have been submitted to NEC to be put on the waiting list. 

• NEC will prioritize sites with the lowest phosphate discharge.

• Cost per 0.1kg/yr will be £2400+VAT.

• There may be an announcement regarding changes or abolishment of Nutrient Neutrality in the King's speech on the 7th November

Norfolk Environmental Credits Ltd (NEC)

In the latest update, it has been announced that the first round of nutrient neutrality credits for the Yare catchment will be priced at £2,400+VAT per 0.1kg/yr Total Phosphorus, which also includes the nitrogen mitigation required for development sites. Payment for these credits will be required upfront. The allocation of credits will prioritize sites with the lowest need for phosphorus mitigation within the Yare catchment.

Kings Speech

The UK government is considering introducing a new bill to change or eliminate "nutrient neutrality" rules that currently restrict housing development in areas with protected habitats. 

A recent report in the Sunday Telegraph suggested that the government might announce the bill in the King's Speech, although it noted that this was not guaranteed, as it would require shelving another piece of legislation. The bill aims to allow more housing construction by potentially scrapping nutrient neutrality rules.

At the Conservative Party Conference, both the Secretary of State for Levelling Up, Housing, and Communities, Michael Gove, and DLUHC Minister Rachel Maclean confirmed the government's intent to bring forward a bill to eliminate nutrient neutrality rules. However, a previous attempt to amend the Habitats Regulations to achieve this was defeated in the House of Lords in September 2023 and was not added to the Levelling Up and Regeneration Bill for that year.

The proposed changes have generated significant debate and reaction, with environmental concerns playing a central role in discussions.

Nutrient Neutrality Update 25.09.2023

Unsurprisingly the House of Lords on the 13th September has voted against the amendment to the Housing and Levelling up bill with a vote of 192 against and 161 for. Meaning Nutrient Neutrality will remain in place.

As stated in our update on 30.08.2023 are coming online so despite the above set back things will start moving soon.

We will continue to monitor the situation closely and provide further updates as they arise.

Nutrient Neutrality Update 30.08.2023

Key Updates

• Norfolk Environmental Credits Ltd (NEC) will be releasing the first set of credits for the River Yare catchment in the next few weeks.

• No target date has been set for the Bure and Wensum Catchments.

• Site information must have been submitted to NEC to be put on the waiting list. 

• NEC will prioritize sites with the lowest phosphate discharge and have been delayed the longest. 

• The cost of credits has still not been released.

• 3000 homes are expected to be able to be determined following the first credit issue.

• Micheal Gove and Rishi Sunaks visit to Hethersett should be taken with a pinch of salt.

Norfolk Environmental Credits Ltd (NEC)

NEC has stated on their website and we have been informed by some local authorities that over the coming weeks applications will be invited to purchase NN credits for off site mitigation. Two key points must be considered in this first issue:

• These credits relate only to sites within the Yare river Catchment and/or Whitlingham water treatment plant.

• Information must have been submitted to NEC to be included on their waiting list.

If we are acting as your agent for an application and your application is on hold due to NN we will have submitted your application to NEC in May of this year when their website first came online. 

NEC has stated they will allocate credits prioritizing sites with the lowest phosphate needs that have faced the most extended delays due to NN. To facilitate this it is imperative the NN budget calculator is completed and submitted to both the Planning Authority and NEC.

NEC believe their first issue will release some 3000 homes currently stuck in the planning system. However this falls some way short of the estimated 16000 homes on hold in the region in May this year.

EPD article 29th August

You may have seen the recent EDP article detailing the Prime Minister and Secretary of State for Levelling Up visit to Taylor Wimpey’s development in Hethersett where they announced their intention to overturn Nutrient Neutrality (NN) as an amendment to the Levelling up and regeneration bill which is imminently to be signed into law. 

This should be taken with a large pinch of salt as it is this practices opinion that the government does not hold the power to overturn NN. This is because the issue stems from a European Court of Justice decision from 2018 in the Netherlands (known as the ‘Dutch Nitrogen Case’). This Practice suspects that even if an amendment to the Bill is passed a UK Supreme Court case will be raised immediately but environmental campaigners and possibly Natural England itself to reinstate NN.

Nutrient Nutrality Update 24.05.2023

Key Updates

• Currently an estimated 16000 houses are on hold in the Nutrient Neutrality area.

• We have been informed the first credits for purchase will be available ‘by the end of the summer’ for the Yare catchment area. Wensum catchment following and finally Bure.

• Credits are expected to be £5000 for a credit to cover 0.1P/yr. This will roughly equate to £5000 per dwelling dependant on catchment.

• Norfolk Environmental Credits Ltd (NEC) expects to have credits available for all planning applications currently on hold.

• A streamlined Shadow Habitat Regulations Assessment (SHRA) form is in development for sites below 10 dwellings.

• All applications must submit their completed NN calculator to NEC for credit quotation purposes.

• A subsidiary company is in the works to buy credits from dwellings which upgrade from septic tanks to package treatment plants. 

• NEC will look to sell other credits in the future including net biodiversity gain. 

DFAL were in attendance at a meeting on 22nd May 2023 to update the industry on Nutrient Neutrality and the new credit brokerage company which has been brought into existence. 

Norfolk Environmental Credits Ltd (NEC)

NEC has been set up as a credit brokerage to act between developers and credit suppliers. It has been stated that NEC has been set up as a non-profit organization and all fund generated will be routed to the implementation of further mitigation schemes. 

We understand the credit suppliers will be private landowners whom will retain ownership of the land but will agree to changing the long term land use. NEC will pay landowners for this. 

Some funds will also be directed to Anglian Water subsidy Anglian Water Venture Holdings for the upgrade of treatment plants in affected catchments to a level over and above the statutory requirements which are discussed later.

NEC will also be making an application to the Local Nutrient Mitigation Fund for funding to assist in the implementation of mitigation solutions. It was indicated that £10mill may be made available by the central government for this effort. 

Mitigation Schemes

Royal Haskoning (RH) were present with a general update of their work. RH has mapped all planning applications on hold and identified areas where mitigation will be most effective. RH proposals cover anticipated development up to 2038. A portfolio of mitigation methods have been proposed which will include:

• Riparian Buffers

• Wet Woodlands

• Change of farmlands

• Upgrades of existing social housing stock

• Septic tank upgrades to treatment plants

Anglian Water (AWA)

Anglian water’s Richard Boucher was present and explained their approach to the problem. At this time AWA are detailing their upgrade plans spanning from 2025 to 2030. The extent of these upgrades is subject to the content of the Levelling Up and Regeneration Bill which has recently been amended to include further requirements for the water companies to address Nitrogen and Phosphate pollution.

It was made clear that the statutory required upgrades to treatment works would not form NN credits, however they would reduce the calculated run off and would thus reduce the costs of credits to mitigate. AWA has identified 15 sites in Norfolk for potential upgrades and subject to the content of the above bill are expecting the following sites to be improved: Dereham by 2025, Fakenham by 2025 and Whitlingham by 2027. 

It was indicated that funding from NEC would be used to upgrade treatment works in the catchment areas to over and above the statutory level. Again this would not directly create a credit but rather reduce calculated run off.

DFAL Commentary

This issue is now a year on and the number of homes on hold is now over 16000. This does not take into account those planning applications which have not been submitted in the last year due to the NN issue not warranting the investment. The housing on hold represents an approximate gross sale value of £4.5 billion based on the average Norfolk house price. A significant portion of revenue for builders large and small which is still stuck in the planning system.

It appears however that things will finally be able to get moving again by the end of summer in the Yare catchment area at least. It was not made clear when the Wensum and Bure catchments would come online.

It is anticipated that when the planning system does start moving again there will be significant delays in approval being issued for applications old and new due to the backlog of applications. If you have a site on which you are considering a planning application, now may be the time to begin the process. If late summer is achieve for the credit scheme as stated a project undertaken now would within reason be ready for submission just as the credit scheme comes online.