What are statutory credits?
Statutory biodiversity credits are a financial instrument sold by the government — specifically by Natural England on behalf of DEFRA — that allows developers to meet their BNG obligation when they cannot deliver the required 10% uplift through on-site habitat creation or off-site unit purchases.
When a developer buys statutory credits, the revenue is used to fund habitat creation and enhancement projects across England, managed by DEFRA. The developer receives a proof of purchase that they submit with their Biodiversity Gain Plan.
When can you use statutory credits?
Credits sit at the bottom of the biodiversity gain hierarchy. You can only use them when:
- On-site habitat creation and enhancement has been maximised
- You have approached at least 3 local or national off-site unit suppliers, habitat banks, or trading websites
- You can demonstrate that insufficient off-site options are available in England
- Your LPA has confirmed by email that you can proceed with statutory credits
Your Biodiversity Gain Plan must include evidence of steps 1–3: why on-site delivery is insufficient, and correspondence showing you approached suppliers who could not meet your needs.
The sub-0.25 unit exception
There is one important exception to the evidence requirements. If your development needs less than 0.25 biodiversity units to meet the 10% BNG target, you can purchase statutory credits without needing to evidence that you approached 3 suppliers. This is the simplified route for very small developments — read more in our exemptions guide.
Pricing
Statutory credit prices are set by DEFRA and published on GOV.UK. They are deliberately priced high — the policy intention is that credits should never undercut the private off-site market. Prices are reviewed every 6 months.
The spatial risk multiplier (SRM)
Before looking at the price table, you need to understand the 2x spatial risk multiplier. Because the government cannot guarantee where credit revenue will be spent, a flat 2x multiplier applies: you must buy 2 statutory credits for every 1 biodiversity unit of shortfall.
The metric tool calculates this automatically. The prices in the table below are per credit — to get the effective cost per unit, double the figure.
Price table by tier
| Tier | Distinctiveness | Price per credit | Effective cost per unit (×2 SRM) |
|---|---|---|---|
| A1 | Very Low / Low | £42,000 | £84,000 |
| A2 | Low / Medium | £42,000 | £84,000 |
| A3 | Medium | £42,000 – £70,000 | £84,000 – £140,000 |
| A4 | High | £70,000 – £120,000 | £140,000 – £240,000 |
| A5 | Very High | Up to £650,000 | Up to £1,300,000 |
| H | Hedgerow (all types) | Per km rate | 2× per km rate |
| W | Watercourse (all types) | Per km rate | 2× per km rate |
VAT is not charged on statutory biodiversity credits (confirmed June 2025).
Credits vs off-site units — worked example
A residential development has a shortfall of 5 area habitat units at Tier A2 (Medium distinctiveness):
The purchase process
Buying statutory credits follows a specific sequence:
- 1Discuss with your LPA. Contact your Local Planning Authority to discuss statutory credits as part of your overall BNG strategy. The LPA must confirm by email that you can proceed with credits.
- 2Get conditional planning approval. You need a valid decision notice from the LPA before Natural England will process a credit purchase. Do not buy credits before this point.
- 3Fulfil non-BNG pre-commencement conditions. The LPA should advise that you can only purchase credits after fulfilling other pre-commencement planning conditions.
- 4Apply to Natural England. Submit your application through the credit sales service. Include your decision notice and the unit shortfall summary from your metric calculation.
- 5Wait for approval. Natural England will process your application — this can take up to 8 weeks.
- 6Receive invoice and pay. If approved, you receive an invoice for the total credit cost. Payment is required before proof of purchase is issued.
- 7Submit proof of purchase. Include the proof of purchase with your Biodiversity Gain Plan when submitting it to the LPA for discharge of the BNG condition.
What credits cannot do
- Cannot offset Very High distinctiveness habitats. If your development impacts Tier A5 habitats (ancient woodland, blanket bog, etc.), bespoke compensation is required — statutory credits cannot be used.
- Cannot be purchased speculatively. You need a valid planning decision notice before Natural England will sell credits.
- Cannot be transferred. Credits are tied to a specific planning permission. If you make a Section 73 variation, previous credit purchases from the original permission can count toward the new one.
- Cannot be refunded. Once purchased, credits are non-refundable (except if permission is revoked).
- Cannot replace the hierarchy. Even for very small developments, the mitigation hierarchy still applies in principle — credits are always the last resort.
What the government does with credit revenue
Revenue from statutory credit sales is used to fund habitat creation and enhancement projects across England, in line with the requirements of the Environment Act 2021. The Secretary of State is required to report annually on the outcomes of the statutory credits scheme.
The policy intention is that over time, the private market will generate sufficient supply of off-site units across all habitat types and geographies, reducing reliance on statutory credits. DEFRA expects credit usage to decline as the market matures.
Estimate your credit costs
Enter your unit shortfall by tier and get an instant cost estimate — including the 2x spatial risk multiplier. Compare against typical off-site market prices.
Key contacts
- Credit purchase queries: BNGcredits@naturalengland.org.uk
- General BNG enquiries: biodiversitynetgainenquiries@naturalengland.org.uk (aim to reply within 10 working days)
- GOV.UK credit pricing: gov.uk/guidance/statutory-biodiversity-credit-prices
- GOV.UK cost estimator: gov.uk/guidance/estimate-the-cost-of-statutory-biodiversity-credits