Introduction

The nature restoration levy was introduced in Part 3 of The Planning and Infrastructure Act 2025 (“the 2025 Act”). Section 73(2) of the 2025 Act set out that the in making the Regulations the Secretary of State: “must aim to ensure that the overall purpose of the nature restoration levy is to ensure that costs incurred in maintaining or improving the conservation status of environmental features can be funded (wholly or partly) by developers in a way that does not make development economically unviable.”.

The nature restoration levy gives Natural England a discretion to decide whether an Environmental Delivery Plan (“EDP”) is mandatory or discretionary. Where it is discretionary, a developer has a choice when a proposed development falls within the EDP. However, it should be noted that in some cases, the EDP will not be a complete answer, and a Habitats Regulations Assessment may still be required, where, for instance, a particular species is not covered by the relevant EDP.

The mechanism is not without controversy: it subverts the established hierarchy, no longer prioritising the avoidance of environmental harm, instead allowing compensation to be the first step. This has been discussed in a previous blog post. The new The Environmental Delivery Plans (Appropriate Prioritisation) Regulations 2026 respond to this to some extent by providing that when preparing an EDP, Natural England must prioritise avoidance measures over mitigation measures and compensation measures, and mitigation measures over compensation measures. However, this is subject to the caveat of “where appropriate”. As part of this, Natural England must also consider whether the prioritisation of conservation measures delivers “value for money”. This is likely to be controversial, and a key question remains: what constitutes value for money, and for whom?

The effect of allowing developers the choice between paying the levy and the previous strategy is that compensation is no longer the last resort; if economically viable, it may be the first port of call. This has led environmental campaigners to call the proposed Nature restoration levy scheme a scheme to allow developers to pay “cash to trash”[1] the environment.

Discussion of the NRL Regulations

As widely anticipated, the NRL Regulations are largely modelled on the Community Infrastructure Levy Regulations 2010 (“CIL regulations”). Like the CIL regime, the Regulations set out who is liable, when liability arises, and how the levy should be calculated. This has the benefit that the overall mechanism of the scheme will be familiar to many.

Part 2 of the NRL Regulations

Part 2 of the NRL Regulations sets out liability to pay the levy. Regulation 5 provides that where a developer wishes to pay the Levy, a public authority granting planning permission must impose a condition that development not begin before either liability to pay the levy is discharged, or if the levy is to be paid by instalments, liability to pay the first instalment is discharged. There is currently no provision in the Regulations to require the local planning authority (“LPA”) to be notified of the need for a pre-commencement condition for payment of the NRL. Presumably, the onus will fall on the developer to inform the LPA.

Regulations 7-9 provide for a developer to assume liability and transfer liability and are largely similar to those provisions found in CIL.

Regulation 10 provides that liability to pay for the levy arises for development authorised by planning permission when Natural England receives an assumption of liability notice or imposes levy liability.

Regulation 11 states that Natural England may allow the levy to be paid in instalments. By allowing developers to pay in instalments, environmental campaigners are concerned that the levy payments may come after harm to nature has been caused [2].  

It is only at the Regulation 12 stage, when a liability notice is issued, that the developers will become aware of exactly how much they will be liable to pay. This is after the developer would have assumed liability, and a planning permission with a pre-commencement condition for payment of the NRL has been granted. Accordingly, it seems likely that there will need to be pre-planning application correspondence between Natural England and developers to establish, at a much earlier stage in the planning process, how much the developer will likely be liable for. Otherwise, developers may face an unexpectedly high bill at a point of no return. Given how important certainty is to allow developers to make an informed choice between paying the NRL or doing their own on-site mitigation, it seems surprising that the Regulations, as currently drafted, have a scheme which leaves developers in the dark until they are effectively ‘locked’ into paying the levy. This issue is exacerbated by the limited opportunities for developers to avoid the NRL once they have accepted liability.

Regulations 16-20 provide that Natural England must impose levy liability on owners of land where development has begun, and Natural England has not accepted a request to pay. These Regulations also give a formula for calculating the owner’s liability under these Regulations.

Regulations 21-22 provide for the procedure where a developer wishes to rescind its acceptance of a request to pay. The circumstances under which Natural England must accept this application are limited and occur where:

1. There is an expiry of commitment (i.e. no planning application made);
2. The EDP has been revoked;
3. Planning permission has been refused;
4. Another consent needed has been refused;
5. Planning permission has been revoked, quashed or reversed on appeal;
6. Planning permission has expired without development having begun; or
7. There has been a change in development (i.e. the developer no longer intends to proceed with the development as described).  

The effect is that once a developer assumes liability and planning permission is granted, they are effectively at the point of no return and must continue with the NRL route. For developers, as noted, this underscores the importance of early consultation with Natural England. The benefit for EDPs of this system is that once a developer has committed to paying the NRL, the EDPs will have a certain source of funding.

Part 3 of the NRL Regulations

Part 3 of the NRL Regulations provides for the amount, payment and use of the levy. Of note is that Regulation 23 allows Natural England, when setting the rates in a charging schedule, to have regard to the actual costs incurred and costs expected to be incurred in the administration of the EDP. This addresses a repeated concern that Natural England has finite resources and has been increasingly stretched in recent years[3]. However, an outstanding concern is that there are no provisions in the Regulations or in any of the guidance that require monitoring or publication of the amount of funding used for the EDP's administrative costs. Regulation 34 provides for a final report to include the total sum of all the outstanding amounts of the levy, the total amount of levy funds spent on conservation measures, and the total amount of funds spent on the delivery, management, maintenance and monitoring of conservation measures. However, there is no specific provision for Natural England to lay out, in plain terms, the cost of administering the EDP. The lack of transparency means that it will be wholly unclear how much of the developers’ funding is going to the administrative side of the EDPs rather than being used directly in the operation of the EDP.

Furthermore, Regulation 23(2) states that Natural England “may set a reduced rate in a charging schedule to account for actual or expected sources of funding other than the levy for the conservation measures set out in the EDP”. This potentially allows Government funding or other funding sources to reduce a developer’s liability for harm caused directly by development. It will be interesting to see whether the power is ever used in practice. It is, however, an example of the careful balance the NRL seeks to strike between improving the environment while ensuring that costs for developers are kept under control. 

The rates set under Regulation 23 are specific to each EDP. While this means that the rate will accurately reflect the cost of the EDP, it may cause tensions and frustrations if the costs of EDPs vary substantially. Regulation 23(2) may provide some protection against that.

Regulation 23 further sets out how the charging schedule may operate. It may operate in reference to the total area of development, the number of buildings, and the number of units, and may provide for different rates depending on factors such as the amount of development and different zones. Again, one can see how flexibility is at the heart of the scheme, and that individual EDPs will vary.

Regulation 24 provides for the calculation of the levy amount. At this stage, it is difficult to say much about this provision, as the calculation depends on the individual rates that will be set by each EDP.

Regulation 26 provides for inflation-adjusted payment amounts. This seems specifically designed to address the concern that ‘in order to ensure that measures under an EDP are properly funded, even where levy payments are not received until several years after the EDP was made, amounts calculated and paid under an EDP’s charging schedule(s) are required to be uplifted for inflation’.

Regulation 31 provides for a limited refund scheme in cases of overpayment. Interestingly, this is a much more limited scheme than CIL for repayments, and in fact, Natural England is entitled not to reimburse overpayments where the overpayment results from a material change in development or a transfer or payments between developers. Furthermore, where a scheme has been cancelled under Regulation 22 (i.e. because a planning permission has lapsed), the levy liability is not extinguished if payment was due before the cancellation notice was given. The effect is that, in most cases where a developer has committed to pay, Natural England can be reasonably sure it will receive the money and can implement the EDP without concern about having to refund any money at a later date. On the other hand, for developers, this underscores the importance of confirming the NRL route before committing to it.

Parts 4 and 5 of the NRL Regulations

Part 4 gives the Regulations their teeth: providing for surcharges for failure to assume liability, late payments, and failure to notify changes in development and interest rates. Regulations 40-41 also allow Natural England to issue a stop notice where payment is overdue and to impose injunctions for a breach.

Part 5 provides for reviews and appeals and allows developers to review calculations if they believe they are too high. This is again similar to the CIL regime.  

Final Thoughts

For the NRL Regulations to be effective, they rely on a careful balancing act.  The rates that the individual EDPs set must be sufficient to fund both the administration, creation, and implementation of EDPs, but at the same time, they cannot be too high as to deter developers from using the NRL, as it is no longer more cost-effective over the previous site-specific approach.

While there is much detail in the NRL Regulations, the key detail – namely the rates themselves – remains to be seen, and will only be understood when the first EDPs come forward. It is consequently unclear whether the EDPs will be effective in practice, as only if each EDP strikes the right balance will a sufficient number of developers use the new scheme.

The draft Regulations will be debated by Parliament and will come into effect only after being approved by both houses.

[1] A Letter to MPs from economists and ecology experts tilted ‘Re Planning and Infrastructure Bill nature levy: A licence to kill nature’ (24th April 2025)

[2] The Wildlife Trusts briefing: The Nature Restoration Levy Regulations 2026 (8th July 2026)

[3] See e.g. ‘What does the Planning and Infrastructure Act mean for ecology’ (25th February 2026): [url=https://www.britishecologicalsociety.org/content/what-does-the-planning-and-infrastructure-act-mean-for-ecology/]https://www.britishecologicalsociety.org/content/what-does-the-planning-and-infrastructure-act-mean-for-ecology/[/url]