The Nature Restoration Fund could change how developers meet certain environmental obligations, replacing some site-specific mitigation with a defined levy. What could the new system mean for SME developers?
Environmental requirements have become an increasingly important consideration for property developers, particularly in areas where development could affect protected habitats and species.
Nutrient neutrality has been a particular challenge. In affected areas, developers have been required to demonstrate that new development will not add to existing nutrient pollution, with mitigation often needing to be identified and secured before development can proceed.
The Government estimates that nutrient neutrality requirements affect around 16,500 homes a year. Its Nature Restoration Fund (NRF) is intended to provide an alternative approach – moving some environmental mitigation away from individual developments and delivering it strategically across a wider area.
What is the Nature Restoration Fund?
The Nature Restoration Fund was established under the Planning and Infrastructure Act 2025 as a new way for housing and infrastructure developers to meet certain environmental obligations.
Under the existing approach, a developer may need to assess the environmental impact of an individual scheme and identify and secure appropriate mitigation. The NRF introduces an alternative where a qualifying development is covered by an Environmental Delivery Plan (EDP).
Rather than carrying out the relevant project-level assessments and arranging site-specific mitigation themselves, developers may have the option to pay a Nature Restoration Levy. Natural England will pool payments from multiple developments and use the money to deliver conservation measures on a larger, strategic scale.
The intention is to provide greater certainty for developers while enabling environmental improvements to be planned across a wider area rather than development by development.
The first Environmental Delivery Plan
The first indication of what this could mean in practice came on 17 September 2026, when Natural England published the first draft Environmental Delivery Plan for consultation in Norfolk.
It proposes a Nature Restoration Levy of £2,675 per house or flat, plus indexation, and has capacity for up to 15,780 homes. For a hypothetical ten-home development eligible to use the plan, that would mean a base levy of £26,750 before indexation.
The Norfolk plan isn’t operational yet. But for developers, it provides the clearest indication so far of how the new system could affect development costs, environmental mitigation and the planning process.
How do Environmental Delivery Plans work?
Environmental Delivery Plans sit at the centre of the new system. Prepared by Natural England, each EDP applies to a defined geographical area and addresses specific environmental impacts on protected sites or species.
An EDP sets out the types and amount of development that can use it, the environmental impacts being addressed, the conservation measures that will be delivered and the charging schedule used to calculate the levy. It also has a defined development capacity.
The existence of the Nature Restoration Fund therefore doesn’t automatically change the environmental requirements for every development. A project needs to fall within an applicable EDP, the development type and particular environmental impact need to be covered, and sufficient capacity needs to remain within the plan.
Most EDPs are expected to be voluntary, giving eligible developers the option of using the levy or continuing through existing routes. The legislation also provides for an EDP to be mandatory in certain circumstances. Before an EDP comes into effect, it must go through consultation and be approved by the Secretary of State.
What changes for developers?
Once an EDP has come into force, eligible developers will be able to use an online service to obtain an estimate of the levy they would need to pay. The calculation will follow the charging schedule contained within the relevant EDP. Developers can then request to use the EDP and, once approved and planning permission is granted, become committed to paying the levy according to the agreed timetable.
The more significant change comes during the planning process. Where the relevant environmental impact is covered by an EDP, an eligible development using it can rely on the EDP in place of the required habitats assessment or species licence for that environmental feature.
Instead, responsibility for delivering the necessary conservation measures sits with Natural England through the EDP. For developers, that potentially replaces a project-specific process of assessing an impact, devising mitigation and securing that mitigation with a clearer route and an identifiable cost.
What doesn’t the levy replace?
Paying the Nature Restoration Levy does not remove every environmental or planning obligation associated with a development. It only addresses the specific environmental impact covered by the relevant Environmental Delivery Plan.
Local planning authorities must still consider environmental effects outside the EDP and comply with other relevant planning and environmental legislation. Depending on the development, that could still include biodiversity net gain (BNG), flood risk, contamination, noise, air quality and other ecological requirements, with BNG remaining separate from the Nature Restoration Fund.
Developers therefore need to establish exactly what an EDP covers – and what it doesn’t – before incorporating the levy into an appraisal or planning strategy. The NRF should be viewed as an alternative route for meeting defined environmental obligations – not a way of bypassing environmental assessment altogether.
Greater certainty – the potential benefit for developers
For SME developers, one of the most significant potential benefits is greater certainty over cost and process. Where professional fees, delays and uncertain mitigation costs can have a disproportionate impact on a smaller scheme, being able to quantify an environmental obligation earlier could be particularly valuable.
Environmental mitigation can affect both the cost and programme of a development. Where a solution is difficult to identify, unavailable or uncertain in cost, it becomes harder to establish whether a project is viable and when it can realistically proceed.
A published EDP and charging schedule puts a defined cost against the environmental obligation it covers. That means the levy can be incorporated into the development appraisal alongside land, construction, professional fees and finance.
Norfolk illustrates the point. The draft £2,675-per-home charge means an eligible developer can calculate a proposed base cost from the unit count rather than first having to establish a bespoke nutrient-mitigation solution.
That doesn’t establish that the levy will always be cheaper than existing mitigation. The relevant comparison will depend on the site and the alternative mitigation available. For an SME developer, the potential advantage is being able to compare those routes – and their effect on viability and programme – much earlier.
Whether that translates into materially shorter planning times will become clearer as EDPs move from consultation into operation.
Norfolk provides the first major test
The first draft EDP focuses on nutrient pollution affecting the Broads Special Area of Conservation, Broadland Ramsar site and River Wensum Special Area of Conservation.
Nutrient pollution can increase levels of nitrates and phosphates entering waterways through wastewater and runoff, damaging protected aquatic environments. The proposed EDP has a maximum development capacity of 15,780 homes.
The proposed Nature Restoration Levy is £2,675 for each house or flat, plus indexation. Rather than each qualifying development arranging its own mitigation for the nutrient impacts covered by the EDP, levy payments would be pooled by Natural England to fund strategic conservation measures. Natural England estimates that the plan could raise more than £30 million for large-scale improvements to rivers and wetlands, including the Norfolk Broads.
The £2,675 figure is important, but it shouldn’t be read as a national NRF rate. Each EDP will contain its own charging schedule based on the conservation measures it needs to deliver. Nor is 15,780 a forecast of the number of homes that will now be built – it is the maximum development capacity proposed for this particular EDP.
Most importantly, the Norfolk plan isn’t operational yet. It remains a draft under consultation until 27 October 2026 and can only become available to developers after the consultation process has concluded, the plan has been approved and it has come into force. Norfolk therefore provides a useful early test of the model, rather than an example of an EDP already in operation.
The NRF could extend beyond nutrient neutrality
Nutrient pollution is the starting point, rather than the limit of the Nature Restoration Fund. The framework has been designed to address impacts on protected sites and species more broadly where there is robust evidence that a strategic approach can deliver an improvement for nature.
Government has already indicated that Natural England will begin preparatory work on great crested newts, examining how the strategic approach used through District Level Licensing could be transferred into the NRF. Further detail on potential great crested newt EDPs will be published in due course.
If the model proves effective, that creates the possibility of a wider shift in how some development-related environmental impacts are addressed – from mitigation organised scheme by scheme towards coordinated interventions delivered across a larger area. For developers, the progress of these early EDPs is therefore worth watching even where current projects aren’t affected by nutrient neutrality.
What should SME developers do?
For developers with sites potentially affected by an EDP, the starting point is to establish four things:
Is the development within the geographical area covered by the EDP?
Is the type of development eligible to use it?
Does the EDP cover the specific environmental impact affecting the site?
What would the levy cost – and what environmental or planning requirements would remain outside it?
Capacity matters too. Each EDP defines the scale and type of development it can support, so developers will need to establish whether the relevant plan has capacity for their scheme.
Where an EDP is voluntary, developers will also need to compare the levy route with any existing mitigation option available to the project. A fixed levy isn’t automatically the cheapest route, but greater visibility over cost and process could make it easier to assess both options before significant commitments are made.
For sites potentially covered by the Norfolk plan, there is an additional distinction to make now: the proposed £2,675 levy is an appraisal input to consider, not yet a mechanism developers can use.
A new route – but the appraisal still comes first
he Nature Restoration Fund represents a different approach to balancing development with environmental protection. For eligible schemes, replacing certain individual mitigation requirements with a defined levy and strategic conservation programme could provide greater certainty over cost and process. Pooling contributions could also enable environmental measures to be delivered at a scale that would be difficult to achieve development by development.
Norfolk now gives developers something tangible against which to assess that model: a proposed £2,675-per-home levy and capacity for up to 15,780 homes. The next question is how effectively that model works once EDPs move from consultation into operation.
For SME developers, the practical questions are straightforward: does an Environmental Delivery Plan cover your site, what does it cover, what will it cost and how could it affect the viability and programme of your development?
Just as importantly, developers need to understand what remains outside it. Environmental Delivery Plans are intended to simplify specific obligations – not remove the wider environmental considerations fundamental to planning and development.
Further reading and resources
Nature Restoration Fund: how it works and what developers need to know – GOV.UK
Environmental Delivery Plans – GOV.UK
Using the Nature Restoration Levy – GOV.UK
Nutrient pollution: draft Norfolk Environmental Delivery Plan consultation – GOV.UK
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