Nutrient Neutrality Notes

LANDOWNER BRIEFING NOTE

ACHIEVING NUTRIENT NEUTRALITY AS AT 12 SEPTEMBER 2022 WHAT IS NUTRIENT NEUTRALITY? In August 2020, Natural England in its advice note highlighted high levels of phosphate contamination in the Somerset Levels and Moors Special Protected Area (SPA).

This is causing significant harm to the valuable ecosystems it supports. Concerns surrounding this issue, together with case law established by a Court judgement (known as the Dutch N case), led Natural England to advise that new residential or agricultural developments should no longer be granted planning permission. The exception being if the applicants can demonstrate that there would be no net increase in phosphates reaching the SPA. This led to the term ‘nutrient neutrality’ being coined.

KEY POINTS After two years it appears progress is being made to unlock stalled developments across Somerset.

A range of mitigation solutions are becoming established, creating opportunities for land and property owners.

There is now greater clarity regarding the potential value of nutrient mitigation.

GTH has the knowledge and experience to advise on various mitigation schemes.

WHY DOES THIS MATTER? Since Natural England issued its advice, the Somerset Councils have effectively imposed a moratorium on granting planning permission for new residential (including holiday lets) and agricultural developments that will lead to an increase in livestock. This applies to developments that would discharge waste or surface water within the Tone, Parrett, and Brue river catchments. It is estimated that across Somerset, some 18,000no. new homes are currently held up in the planning system. This is because existing sewage treatment facilities cannot effectively remove phosphates from waste and foul water and because

mitigation and offsetting solutions have proven complicated and incredibly land intensive.

The issue has had dramatic and far reaching consequences.

It has contributed to a drastic undersupply of housing across the affected area. This in turn has impacted enormously upon the construction industry and exacerbated house price growth.

Concerns over nutrient neutrality have also been raised in other parts of England, with 74no. local authority areas affected.

GREENSLADE TAYLOR HUNT www.gth.net

HOW CAN LAND AND PROPERTY OWNERS HELP TO SOLVE THIS ISSUE? In most cases, it is very difficult, if not impossible, for new developments to achieve nutrient neutrality with on-site measures alone. This means that house builders/developers are having to look for off-site solutions to offset the phosphates generated by their developments. This creates an opportunity for land and property owners to provide offsetting solutions (known as credits) and generate a sales receipt in doing so by selling these. A summary of the main opportunities for phosphate offsetting is provided below:Upgrading septic tanks Traditional septic tanks are highly inefficient at removing phosphates compared to modern package treatment plants (PTPs). Replacing septic tanks with PTPs can vastly reduce phosphate outputs, thereby offsetting the impacts associated with multiple new homes.

Tree planting Tree planting can reduce phosphate levels in the ground.

However, the amount of land required could be considerable, perhaps 0.5 hectares (1.24 acres), to offset just one new home.

Wetland creation Wetland creation is an effective means of filtering phosphates out of the water environment. To be effective wetlands require flat land and must be located adjoining a phosphate rich and free flowing watercourse, for example downstream of a sewage treatment facility.

Fallowing agricultural land A temporary solution can be to take land out of agricultural production and leave it fallow as managed grassland, without any stock or fertiliser applied. Fallowing is not seen as a permanent solution, but can provide a useful short-term measure until longer term solutions become available.

WHAT IS THE VALUE OF NUTRIENT OFFSETTING? This has been a big unanswered question over the last 2-years and has been a major contributor to the lack of offsetting schemes coming forward. However, as time has moved on values are starting to be established for nutrient offsetting. Of particular relevance, Somerset West and Taunton Council have confirmed it will be selling indicative price phosphate credits for approximately £55,000 per kilogram. This provides a benchmark against which to estimate the value of other offsetting schemes. However, it is important to note that the value of credits is not fixed and it is subject to prevailing market conditions.

For context, 1 kilogram of phosphates equates to try and offset 5no.-15no. homes, depending on where they are proposed and the standard of the sewage treatment works that will be serving the development.

WHAT’S THE CATCH? There is always a catch. Before you can sell your credits to a willing buyer you will need to establish how many credits you have to offer. This will require specialist input to calculate. In the case of replacing a septic tank, this process is likely to be relatively straightforward with minimal associated costs. The

process will be more complicated for tree planting, wetland creation and fallowing as these involve larger areas of land and more complex biological mechanisms. A new wetland will also require planning permission. Therefore, anyone wishing to promote these types of offsetting schemes themselves will need to commit to a greater level of investment or register with a nutrient credit trading platform such as that proposed

by Entrade, the commercial arm of Wessex Water.

Once you know how many credits you have to offer it is then simply a case of identifying a willing purchaser in the market, of which there is currently no shortage. Greenslade Taylor Hunt has been appointed by a landowner and instructed to market land with a suitable phosphate mitigation strategy in the catchment of the River Parrett and it has other land with similar capacities.

Where your nutrient offsetting solution will form part of a planning application, you will need to be a signatory to a legal agreement to confirm your obligations for the implementation and future maintenance of the offsetting solution.

See the latest phosphates catchment area map, via the link, as set out as below: Phosphates Map - March 2022 See the latest advice from Natural England, via the link, as set out as below: Letter from Natural England on Impact on 5YHLS

GET IN TOUCH Our Development Land and Planning department will continue to closely monitor Natural England and the Somerset Councils’ guidance in order to provide our clients with the best advice. In doing so we aim to add value for our clients and increase the supply of much needed new homes.

Please get in touch if you would like further information and advice regarding opportunities for providing nutrient offsetting solutions.

MARK CHUGG Partner, Head of Department mark.chugg@gth.net 07738 426759

GRAHAM FORD Partner graham.ford@gth.net 07803 957157

GREENSLADE TAYLOR HUNT www.gth.net

CLAIR ALERS-HANKEY Partner claire.alershankey@gth.net 07764 817730