Environmental Services

 

In recent years the Government has put increasing effort into environmental measures, with agricultural policy focused not just on food production but on delivering environmental benefit with ‘public money for public goods’. The Environment Act 2021 created a range of powers aiming to assist the Government in meeting its long-term, legally binding environmental targets to improve air and water quality, protect wildlife, increase waste recycling and reduce plastics.

Whilst it might be important to retain the most productive agricultural land in food production, the conversion of agricultural land for community and environmental benefits, particularly on poor quality land, allows for a wide variety of ecosystem services based on Natural Capital.

The ‘natural capital’ of a holding now includes a range of potential income sources from carbon, sequestered in  soil, woodland and peatland, to the enhancement or creation of new habitat (most developers must now contribute to a 10% net gain on biodiversity on developments).

The Government envisage a situation where the public and private sector work together to establish a market for these ‘environmental goods’/services and push each other to improve the environment whilst still being able to complete projects necessary to society.

The pledge of being ‘net zero’ by 2050 may require the agricultural industry to have their emissions measured and to offset their carbon footprint to reach net-zero status. Many supermarkets may also require produce to be net zero going forward. Morrisons have stated “by 2030 we aim to be supplied by ‘Net Zero’ carbon British farms as a whole”, whilst to meet their 36.4% reduction in emissions from forests land and agriculture Sainsbury’s have requested suppliers declare their site level emissions and reduction plans. As such, it is important to consider the need to offset the farm’s own carbon footprint before deciding to sell carbon and other environmental credits on the open market.

Along with the Agriculture Act 2020, the Environment Act will affect the agriculture sector both directly and indirectly in several significant ways.

  • Removal of direct payment subsidy BPS in favour of Environmental Land Management’s ‘public money for public goods’,
  • The creation of a market for environmental credits: carbon, biodiversity, and nutrient offsets,
  • Local versus imported food: accounting for the whole supply chain when considering the carbon footprint of one’s food.

The phasing out of BPS leaves a gap in many farm budgets and alternative revenue streams must be explored. The ELM scheme replaces it to an extent but struggles to completely make up the difference. It is therefore important to consider the option of generating an income from natural capital, in the form of biodiversity units, nutrient credits, and carbon credits. Whilst one cannot be paid for the same action twice under two different schemes (e.g. you cannot receive funding under ELMS to farm sustainably and sell the subsequent improvements as a biodiversity unit), the same land can be used to generate income from multiple sources. “Stacking”. The most profitable example being the creation of biodiversity units and nutrient credits on the same land.

The trading of Water Abstraction Licences links intrinsically into the water quality of our rivers and waterways and offers another option for diversifying the income streams of a farm business. This market is well developed and is increasingly being encouraged by the Environmental Agency. See here for more details.

An additional consideration is the awareness the public now have for carbon footprint in the food supply chain. We have seen from COP 26 how the carbon footprint of a locally produced bacon butty can be less than a croissant. This could well lead to a preference for our homegrown sustainably produced food that hasn’t travelled halfway around the world. If food prices increase in favour of UK based farmers, then combined with the emerging markets for environmental credits, life after BPS may be much more positive than previously feared.

What we can do for you:

  • Natural Capital Surveys
    • Whole Farm Survey
    • Sustainable Farming Incentive
    • Environmental Land Management planning
    • Woodland Planting
    • Woodland Budget Planning
    • BNG Baseline and/or HMMP
    •  Nutrient Budget Calculation
    • Statutory Biodiversity Metric  calculations
  • Nitrate Vulnerable Zone Regulations Compliance
  • We also value land for investment purposes with consideration for an array of environmental credits and ‘natural capital’ whether that be woodland creation for carbon units or habitat improvement for BNG and habitat banks
Hugh Townsend

Hugh Townsend
FRICS. FCIArb. FAAV.

01392 823935
enquiries@townsendcharteredsurveyors.co.uk

Alasdair Squires

Alasdair Squires
BA(Hons).

01392 823935
enquiries@townsendcharteredsurveyors.co.uk