We have published our 2022 UK Market Report (click here) which we hope you will find of interest.
START OF 2023 TRADING
As we approach the final trading year for English BPS entitlements, it is good to see the Environmental Credit markets starting to provide other revenue streams for you and our 2022 report as usual covers each of these.
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BIODIVERSITY NET GAIN |
Whilst not mandatory for developers in England until November, we are increasingly seeing more and more LPAs requiring voluntary biodiversity net gain as part of a planning application. An overview of what this means for both developers and landowners is provided in the 2022 Market Report explaining why it is a relatively complex national marketplace because of habitat types and distinctiveness. From our experience of sales only by the BNG units nationally can one be sure the best price has been achieved. We are seeing units selling from £15,000 to £35,000/unit and there was a sale for one unit last year where a developer in central London was caught out and paid £90,000.
Interest in this market is surging ahead of November and if you believe in “the early bird will get the fattest worm” BNG metric surveys need to be booked now for this spring/summer. We have developers looking for units.
If you are interested in offering units for sale in our group sales by informal tender, which are starting soon, do contact us. There is no obligation to accept any tenders.
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CARBON |
The Government’s aim to encourage woodland creation of 30,000 ha per year has seen initiatives including the Woodland Carbon Guarantee (WCG) introduced plus improved establishment grants for new woodland. We have clients around the country with carbon sequestering projects and others seeking additional suitable land. One client is currently looking for 400 acre for woodland planting in England, Wales and Scotland. We offer a “one stop shop” for projects covering finding land, planting and selling the carbon.
Woodland Carbon Units have been fetching £25-30/unit with £12-20/unit for Pending Issuance Units. The option to sell to the Government via the WCG saw our clients having their prices of £22.50/unit accepted in November 2022’s reverse auction. This is of course viewed as an insurance policy to fall back on, should they not fetch higher prices in the open market.
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NITRATES & PHOSPHATES |
Being able to enter the nitrate and phosphate market depends where the land is and what you are going to stop doing, unlike Biodiversity Net Gain, which can use most land anywhere in England, and you have to do something rather than stop doing something i.e. stop polluting waterways compared with creating or improving habitats for BNG. Whilst this is a more focussed market and it is harder to evaluate unit prices, we expect figures from £3,500 to £4,000/kg of nitrate offset to hold into 2023.
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BPS ENTITLEMENTS |
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England |
2023 BPS Entitlement trading has just started, a couple of weeks later than last year with sales of Non-SDA. The market in England will be heavily influenced by it being the last year of entitlement usage before delinkage with the claim value of each entitlement being based on a purchaser’s total claim and which payment band will apply to the entitlements they purchase. As such, each sale will be more unique to the purchaser’s circumstances than ever before.
Non-SDA is trading at £100/unit plus VAT and already it is clear demand is being influenced by those needing to replace lost entitlements before a Retirement Lump Sum application is submitted. Another source of demand has also started to influence the market from those wanting to be part of the SFI Scheme. Currently the RPA says they will need to have a minimum of 5 ha of eligible land and entitlements at their disposal and also be eligible to make a BPS claim this year, although no claim actually needs to be made.
Currently demand is more than double the supply for Non-SDA and we are expecting SDA will be the same at £100 with Moorland at £40.
What you buy in 2023 will not affect the de-linkage payment you will receive in 2024 but you still need to make a claim in 2023, which must be for more than 5 ha, to qualify for these payments which will run until 2027. Also care will need to be taken that the business which claimed in the reference years is the same this year and until 2027.
| 2023 English Entitlement Payment rates (£/ha) | Non-SDA | SDA | Moorland |
| ≤ £30,000 (up to 128.64ha) | 151.59 | 150.52 | 41.57 |
| £30,001 – £50,000 (128.64-214.39ha) | 139.93 | 138.94 | 38.37 |
| £50,001 – £150,000 (214.39-643.18ha) | 116.60 | 115.79 | 31.98 |
| >£150,000 (over 643.18ha) | 104.94 | 104.21 | 28.78 |
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Scotland/Wales/Northern Ireland |
The regions, which usually start trading a little later than in England, we expect to kick off with: Welsh £65/unit; Scottish Region 1 £165/unit, Region 2 £40/unit & Region 3 £15/unit – all plus VAT. Northern Ireland we expect to hold at face value due to historical variation. For the latest updates on the future of BPS in the regions do contact us.
Regions payment rates based on 2022 claim year exc. greening:
Welsh – £116.86 (plus extra redistributive payment on first 54ha of approx. £91.97/ha).
Scottish – R1 £165.63; R2 £36.16; R3 £12.00.
Northern Ireland – average £250
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WATER ABSTRACTION LICENCES |
Trading is becoming increasingly difficult as the Environment Agency look to reduce the volume of water abstracted across England and also now introducing charges for their time handling transfers. This is driving up the price of buying a licence.
Apart from offering an assessment of what you might sell your licence for before deciding to sell, we also can help you obtain a new licence and our services now include: Licence renewals, variations and trades; Hydrological assessments; Abstraction intake design; Long duration licence applications; Recovering “ lost licences”; Licence appeals; and Expert witness.