Nutrient Neutrality: Our ideas to solve the Habitats Regulations Assessment Nutrient Neutrality Crisis

The recent reports of the Prime Minister and Housing Secretary Michael Gove thinking about the future of nutrient neutrality through further changes to the LURB Bill (see for example ENDS reports 12 July 2023 and 24 July 2023) have got us thinking.

True, the housing crisis is not assisted by the nutrient neutrality rules. But what we do not want or need is a huge undoing of the Conservation of Habitats and Species Regulations 2017. The 2017 Regulations are vital for the protection of our most important designated areas and their reach goes far beyond just nutrients.

In our view the Conservation Regulations 2017 already provide a perfectly appropriate mechanism to allow the Government to deal effectively with the nutrient pollution problem i.e. the Habitats Regulations Assessment (HRA) derogation system in regulations 64 and 68 of the 2017 Regulations, which in turn derive from Art 6(4) of the Habitats Directive.

The derogation system allows plans and projects to proceed, even where there is a risk of adverse effect on integrity on a European site (e.g. through nutrient impacts), where 3 derogation tests are met i.e. there are “no alternative solutions” (NAS); there are “imperative reasons of overriding public interest” (IROPI); and the Secretary of State (in England) secures that any necessary compensatory measures are taken to ensure that the overall coherence of  Natura 2000 (the national site network) is protected. We have a lot of experience in advising clients on taking their projects and plans through these tests so as to successfully achieve delivery of their plans / projects despite risks of adverse effects on the integrity of European sites.

If the Government wants to help ease the current approach to nutrient neutrality our view is that it needs to do 3 key things:

Continue to support the significant industry which has sprung up to deliver Habitat Regulations Assessment nutrient neutrality mitigation schemes.

Many schemes are already established or are being established and there is heavy existing investment behind them. These schemes will in many cases allow housing to avoid the need to address the HRA derogation tests by providing the necessary (“Dutch Nitrogen”) level of certainty that HRA caselaw requires of mitigation measures so as to demonstrate through the HRA “appropriate assessment” system “no adverse effect on site integrity”.

Give clear national guidance to assist competent authorities (i.e. LPAs / inspectors) know when the NAS and IROPI tests can be regarded as met for housing applications where there is an associated unmitigated risk of nutrient pollution of European sites.

Clearly we need new housing in this country. It is therefore no big leap to envisage successful derogation cases being made for housing schemes. This is particularly the case when one considers that the contribution made by housing to the risk of nutrient pollution is often very small (and will become smaller as the water industry takes steps to improve its waste water treatment facilities) and that the derogation tests ought to be applied proportionately (meaning that the level of required justification for reliance on the derogation tests increases with the severity of the impact). The Government could take the lead and make clear through guidance when reliance on the derogation tests would be appropriate. There are existing statutory powers to allow the Secretary of State to write such guidance e.g. regulations 64(3)-(4A) and reg 3A(4) of the 2017 Regulations. Writing this guidance could start immediately without any further legislative changes. Freeths could write this for the Government ourselves if we were asked to do so!

Devise national strategic compensatory schemes to be relied upon by developers (through the purchase of credits) to meet their compensatory habitat requirements.

The industry referred to at (1) above would be a key part of this. Everything that industry is doing now in the name of “mitigation” could also be regarded as “compensation” under the derogation tests. The HRA compensatory habitat requirement caselaw is less extensive and somewhat less prescriptive than the HRA appropriate assessment/mitigation measures caselaw. This is important as it would potentially mean that reliance could be placed by housing developers now on future compensatory schemes and yet still in the meantime get their permissions/start their developments, as long as the compensatory measures commitment by the developer (though the purchase of credits) took into account relevant delays to compensation delivery. It could also potentially allow a more flexible approach to the location of the compensation measures in relation to housing developments. Under an appropriate assessment the mitigation measures must be in the same catchment as the development’s impacts since the mitigation measures must directly address/negate the development’s specific impacts. By contrast a more flexible geographic approach could potentially be adopted in the delivery of compensatory measures.

In the meantime housing developers who applications are “stuck” in the nutrient crisis would be well advised to consider carefully the opportunities for relying on the derogation tests so as to move forward with their permissions. This will not be a ”silver bullet” in all cases but in the right cases we think it could be a way forward.

If you would like more information on anything involving the Habitats Regulations Assessment or Nutrient Neutrality, please contact Penny Simpson or Richard Broadbent.

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The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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