Achieving nutrient neutrality : Nitrate and Phosphate Credit Allocation Agreements

Nutrient neutrality is a principle that seeks to ensure that development projects do not contribute to an increase in nutrient pollution in vulnerable ecosystems. It is based on the idea that development should not be adding additional nutrients to the environment and resulting in detrimental effects to the water quality and biodiversity. The concept aims to balance the nutrient load in a way that prevents further deterioration of sensitive habitats and water quality, and is a continuing hurdle for developers until the sewage treatment system is upgraded to deal with the issue.

What are Nitrate and Phosphate Credit Allocation Agreements?

Nitrate and phosphate credit allocation agreements play a part in the evolving regulatory framework designed to tackle nutrient pollution.

These agreements allow businesses, usually within the agricultural industry, to “earn” credits by adopting practices that result in the reduction of nitrates and phosphates entering the environment on their land. In order for credits to be sold, the landowner will need to covenant (usually through a Section 106 Agreement) to adopt certain practices to keep the land in that use for a specific period of time. This then allows credits to be earned, and these credits can then be sold to developers who need to meet specific reduction targets when applying for planning permission on other nearby sites.

For businesses in agriculture and related industries, these agreements offer a unique opportunity to engage in environmentally friendly practices while benefiting from economic incentives.

For developers, these agreements offer an opportunity to overcome the hurdle of the nutrient neutrality requirement for planning applications, whilst ensuring that the environment is not detrimentally affected by their development schemes.

Navigating Nitrate and Phosphate Credit Allocation Agreements

At Paris Smith, we provide legal guidance to help our clients maximise the opportunities offered by nitrate and phosphate credit allocation agreements.

Entering into a nitrate and/or phosphate credit allocation agreement requires the negotiation of the agreement between the mitigating landowners and developers. We assist clients in drafting and negotiating these agreements, ensuring that the terms are fair and reflect the agreed terms required in order for planning permission to be granted. There are key points which are negotiable in such agreements, including:

1. The amount of nutrient credits being allocated, which will be determined by the nutrient neutrality calculator and must be agreed at the outset;
2. The payment of the credits being purchased – is there a deposit payable and when does the full amount become due?;
3. The duration of the credits and the agreements – how long will the credits remain valid and available until they are allocated in full and are there opportunities to extend such time period?;
4. The responsibilities of each party – including monitoring, reporting, and compliance with environmental regulations; and
5. Penalties for non-compliance – including actions in case of failure to uphold the agreement’s terms.

These agreements aim to ensure that nutrient reductions are achieved in a verifiable and sustainable manner.

Get in Touch

With expertise in planning and environmental law and a commitment to sustainable development, we can offer comprehensive support for clients looking to adopt these market-based approaches to reduce nutrient pollution.

For more information on how we can assist, contact Emma Ship. Our team is ready to provide expert legal advice and help you take the next step towards achieving nutrient neutrality.

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