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Create a private market for developers to fund river attachment restoration and unlock housebuilding blocked by harmful chemical pollutants

Key recommendations: 

  • Set clear national standards for nutrient credits

  • Pump prime the nutrient credit market by funding initial offsetting projects

  • Establish a process for measuring, accrediting and auditing offsetting projects


“Nutrient neutrality" requirements temporarily block businesses, farmers, and developers from new activities and building work that could lead to chemical pollution in English rivers in poor condition. This is done in an effort to protect our most precious habitats from further harmful pollution. At the moment, nutrient neutrality is a noble goal that has had perverse outcomes. 


The current policy does not encourage existing polluters, who are responsible for most of the environmental harm, to change. Instead it blocks new developments, which have a marginal impact. It has disrupted housebuilding in 74 local planning authorities, delaying 120,000 essential new homes. The number of areas affected is expected to grow significantly in the coming years, exacerbating housing shortages across the country, unless there are changes to the policy.


Rather than scrap nutrient neutrality altogether, the government should instead pursue a market-based, conservative solution to reach the same outcome at a catchment-wide level. Pilot nutrient trading schemes in the Solent and Somerset Broads and Levels show building houses and achieving nutrient neutrality need not be mutually exclusive objectives. These schemes enable developers to purchase credits from farmers who create wetlands that will capture pollution, offsetting unavoidable harm from development and ensuring nutrient neutrality. 


Natural England is already developing a strategic offset scheme for a number of areas affected by nutrient neutrality requirements, with initial financial support from the government for wetland and woodland creation to generate credits where they are most needed. The revenue from selling these credits to developers will be reinvested in habitat creation to generate further credits. 


There should be local nutrient offset markets for each planning authority under nutrient neutrality rules. To enable them, the government should set clear national standards for nutrient credits, as with biodiversity net gain, and establish a process for measuring, accrediting and auditing projects. This will create confidence in these markets for offset providers, developers, and planning authorities. 


This approach to nutrient neutrality will provide new income streams for farmers and help to reach the government’s nature restoration targets in the process by creating wetlands, improving water quality and safeguarding our protected habitats. Lower quality agricultural land should be prioritised for offsetting in order to minimise food security impacts.


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