BNG trading rules: which habitats can replace which
The BNG trading rules decide what counts as acceptable replacement habitat. Area, hedgerow and watercourse units cannot substitute for each other. Within area habitat, losses of high or very high distinctiveness habitat must be replaced with the same habitat type or better, medium distinctiveness losses with the same broad habitat type or better and low distinctiveness losses with any habitat of equal or higher distinctiveness.
Key facts
- Three separate unit types: area habitat, hedgerow and watercourse. No substitution between them.
- Very high distinctiveness: same habitat type required (bespoke compensation).
- High distinctiveness: same habitat type or better.
- Medium distinctiveness: same broad habitat group or better.
- Low distinctiveness: any habitat of equal or higher distinctiveness.
Last checked: 3 October 2026
Why do trading rules matter when buying units?
Because a unit is only useful if it satisfies the rule for the habitat you lost. A developer losing 1.5 units of lowland meadow (very high) cannot buy 1.5 units of other neutral grassland (medium), however cheap. The register records what habitat each gain site created and BNG Sourced by Green Acres BNG checks every option against your metric before you see it.
The rules by distinctiveness
| Habitat lost | Acceptable replacement | Example |
|---|---|---|
| Very high | Same habitat type, bespoke | Lowland meadow for lowland meadow |
| High | Same type or higher distinctiveness | Mixed deciduous woodland for mixed deciduous woodland or lowland meadow |
| Medium | Same broad habitat or higher distinctiveness | Other neutral grassland for any grassland of medium or above or woodland |
| Low | Equal or higher distinctiveness | Modified grassland for other neutral grassland |
| Very low | Any habitat | Hard standing for anything |
How do hedgerow and watercourse units work?
Hedgerows and lines of trees are measured by length and have their own distinctiveness bands; losses must be met with hedgerow units of equal or higher distinctiveness. Watercourses, including ditches, rivers and streams, are measured by length and must be met with watercourse units. Both are scarcer than area units, so identify them early.
What about condition?
Replacement habitat should be in equal or better condition where the trading rule requires the same habitat type. Target condition and the time to reach it drive the temporal risk multiplier, which can increase the number of units needed where habitat takes years to mature.
Worked examples by distinctiveness
| Loss | Candidate replacement | Acceptable? |
|---|---|---|
| 1 unit modified grassland (low) | Other neutral grassland (medium) | Yes, higher distinctiveness |
| 1 unit other neutral grassland (medium) | Mixed scrub (medium, different broad habitat) | Check: medium requires same broad habitat or higher distinctiveness |
| 1 unit lowland mixed deciduous woodland (high) | Other neutral grassland (medium) | No |
| 1 unit lowland meadow (very high) | Lowland meadow in good condition | Yes, bespoke like for like |
Why design avoidance matters most for high distinctiveness habitat
Like for like supply for high and very high distinctiveness losses is scarce and dear and very high losses may be impossible to offset. Authorities expect the layout to avoid them. Where loss is unavoidable, start sourcing at pre-application because the search is national.
Distinctiveness bands at a glance
| Band | Examples |
|---|---|
| Very high | Lowland meadow, blanket bog, lowland raised bog, saltmarsh |
| High | Lowland mixed deciduous woodland, traditional orchard, lowland heath, reedbed |
| Medium | Other neutral grassland, mixed scrub, other woodland |
| Low | Modified grassland, cereal crops, dense scrub of low value |
| Very low | Hard standing, buildings |
Key takeaways
- Area, hedgerow and watercourse units never substitute
- High and very high distinctiveness: same habitat type or better
- Medium: same broad habitat or higher distinctiveness
- Design avoidance is the realistic answer for very high distinctiveness losses
Frequently asked questions
Can woodland units replace grassland losses?
For medium or low distinctiveness grassland, yes, because woodland is higher distinctiveness. Not the other way round.
Can I use area units for a hedgerow deficit?
No. Hedgerow deficits need hedgerow units.
Who checks compliance with the trading rules?
Your ecologist in the metric and the planning authority when approving the gain plan. We check before an introduction too.
What if no like for like supply exists?
Very high distinctiveness losses can be very hard to offset. Avoidance in design is the expected answer, with statutory credits as a last resort.
Does condition have to match too?
For like for like replacement, replacement habitat should reach equal or better condition. Target condition drives the number of units a site creates.
Can hedgerow distinctiveness be traded up?
Yes. Losses must be met with hedgerow units of equal or higher distinctiveness.
Sources
- Statutory biodiversity metric, gov.uk
- Biodiversity net gain guidance, gov.uk
- Environment Act 2021, Schedule 7A, legislation.gov.uk
Written by BNG Sourced by Green Acres BNG specialists and reviewed by Mike Dungait, Managing Director of Green Acres BNG, who has registered and manages two habitat banks. Indicative information, not legal or planning advice. Confirm with your ecologist and planning authority.
Related: BNG sourcing check, exemption checker, BNG unit prices, glossary, BNG unit types, statutory biodiversity credits.
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