Nutrient neutrality and what it means to developers

Answer

This article considers the recent developments relating to reducing the phosphate and nitrate impact of development and the additional requirements this places on developers.

The problem of nutrient enrichment

New building developments and intense agricultural land usage often lead to an increase in sewage output and greater surface water run-off, which can cause nearby rivers, estuaries and oceans to become excessively enriched by phosphates and nitrates. In turn, this causes algae on the water's surface to multiply, blocking out sunlight for the plants and wildlife below. The result can be a severe decay in water quality and considerable environmental harm as oxygen levels in the water deplete, endangering river and marine life; a process known as eutrophication.

Nutrient neutrality

Following Dutch N, a landmark ruling at the European Court of Justice (ECJ) in November 2018, in which a national government was compelled to take action against climate change for the first time, there has been a reassessment of how EU wide pollution-related legislation is interpreted and applied to reduce nitrate and phosphate levels – in particular, the EU Habitats Directive as implemented by the Conservation of Habitats and Species Regulations.

In 2019, Natural England, the government adviser on the natural environment, issued guidance to several local planning authorities (LPAs), advising them to implement rigorous planning requirements that land developers must meet to drive down excess phosphate and nitrate levels, in particular in Special Areas of Conservation (SACs), Special Protection Areas (SPAs) and Ramsar Sites (ie, wetlands of international importance). Their aim is to achieve what is known as ‘nutrient neutrality’, meaning a net-zero increase of phosphates and nitrates caused by a given development or new land, or even a reduction compared to prior land usage.

Several LPAs quickly obliged and issued moratoria on new developments that could increase the nutrient burden until they decided the way forward. For example, Cornwall Council previously suspended grants of planning permission in the River Camel SPA; residential planning permissions were paused in the Solent and decisions to approve more than 11,000 homes on the Somerset Levels and Moors were delayed. Many councils have now resolved how to tackle this issue, but while the objective of reducing the impact of developments on the natural world is laudable and necessary, developers have been placed in a difficult position by the LPAs' approach.

Problems for developers

Before granting planning permission in affected areas, LPAs require that at all stages of the planning process developers must organise habitat regulations assessments, undertaken in consultation with Natural England, to prove their mitigation measures achieve nutrient neutrality.

Under this regime, developers face uncertainty, since planning conditions require developers themselves to ensure nutrient neutrality is achieved through their own bespoke mitigation measures. This likely necessitates obtaining expert advice and implementing costly measures and even once planning permission is granted it may later be suspended if environmental requirements become more stringent during the development. This is a risk for developers as they may invest heavily into a project only for it to be put on hold.

Further, neutrality measures are often very onerous and/or land-hungry – for example, developers may need to:

• leave large tracts of land fallow to enable the processing of nutrients; and
• install extensive wetlands and woodlands to absorb excess phosphates.

Given the demand for housing development and the density of the population in the UK, such measures may be unsustainable in the long term.

Potential solutions

A recently published phosphorous budget calculator, approved by Natural England, has provided developers with a standardised, transparent and rapid calculation of net phosphate loading, including phosphate offsetting calculations. It also incorporates a ‘buffer’ to ensure that measures achieve mitigation effectively. This provides developers with more certainty that their measures will work before they put time and resources into their construction, and enables early project assessment of cost.

Further, as an alternative to developers putting in place measures themselves, certain LPAs and local councils are considering schemes whereby developers pay into larger projects. For example, Havant Borough Council has established a pilot scheme under which developers buy ‘credits’ from them, the proceeds going towards the creation of larger-scale wetlands, woodlands and meadows to mitigate against the effect of development. The advantage for developers is that additional costs are quantifiable from the outset, making their position more certain. Such schemes are familiar to developers, in many ways similar to Planning Obligations and Community Infrastructure Levies under which developers pay funds to a local council to fund large projects such as roads and infrastructure to counter the additional traffic burden of new housing development or superstores.

Conclusions

Eutrophication has been understood for many years, but since nutrient neutrality is a relatively new concept, LPAs are still working on the way forward. The end goal of environmental protection is to be encouraged, but this must be balanced with the interests of developers and local authorities' housing supply targets. Many LPAs have indicated that they are willing to create centralised schemes that developers can pay into, and it is hoped this will provide developers with greater certainty going forward. Lawyers working in the property sector must remain aware of new developments to understand the pressures their clients face and advise them on the best course of action to take.

 Phillip Ash is a trainee solicitor in the real estate team at Michelmores LLP.