England seeks views on nature recovery payments

England's environment department has proposed principles for paying farmers and land managers for several environmental benefits from the same land, while making clear that the proposals do not change existing schemes. The approach appears in its Growing Places policy paper, published on October 26.

The Department for Environment, Food and Rural Affairs, known as Defra, wants views before deciding whether to use the principles in future policies. Its paper also outlines work on independent checks for nature markets, possible voluntary oversight and support to help local projects prepare for investment.

The question is how a project that improves wildlife habitat, stores carbon and reduces flood risk can receive money for those different results without selling the same outcome twice. Defra says current arrangements can make such combinations difficult, limiting the incentive to develop projects that address more than one environmental problem.

For land managers, the proposals concern how future contracts could separate environmental outcomes and funding claims. For businesses buying those outcomes, the central issue is what they can legitimately claim in return for their payments. Neither group faces an immediate replacement of existing rules through this publication.

Separating payments from overlapping claims

The first proposed principle would let suppliers combine funding sources if they clearly identify which outcomes each source finances, with no double funding. The paper describes several ways to do this, including dividing a project's outcomes proportionately or allocating different activities to different funders.

Timing could also matter. Finance provided at the start of a project could initially be associated with its outcomes, before those outcomes pass to buyers at a defined later stage and the initial finance is repaid. Alternatively, one source could pay for carbon removal and another for a biodiversity improvement.

A second principle would allow a buyer addressing several environmental impacts to purchase more than one verified outcome from the same project. Defra says the arrangement should preserve the land manager's choice about which outcomes to sell and to whom. It would not require every supplier to bundle different benefits into one contract.

The third principle addresses the more difficult question of compensation for damage elsewhere. The government wants to avoid different buyers using separate benefits from one project in ways that leave gaps in accounting for their environmental impacts.

Its example concerns a carbon credit from a project that also improves biodiversity. Under the proposal, those biodiversity benefits would normally remain linked to the carbon purchase rather than support another buyer's separate compensation claim. An exception could apply if the buyer demonstrates no residual biodiversity impact, or shows that it has already compensated for that impact elsewhere.

Payments that make no claim over specific environmental outcomes would fall outside the proposed principles. The paper gives some forms of public funding and philanthropy as examples. This distinction separates financial support for a project from a purchase used to make a particular environmental claim.

Future checks, not an immediate rule change

Defra intends to hold webinars and roundtable discussions during autumn and winter to refine the proposals. The paper welcomes feedback through its published contact route but does not specify a closing date. It says any future application to new or revised schemes would include appropriate transitional arrangements and would not retrospectively undermine decisions made under existing arrangements.

Separately, the government is funding work to develop and test an assurance framework for the UK Nature Investment Standards. The project is expected to run from 2027 to 2029, examining costs, accessibility and participation before a wider rollout. The envisaged move towards accredited certification follows an earlier policy expectation, rather than a certification requirement introduced by this paper.

Defra is also exploring an Environmental Market Governance Scheme with industry and devolved governments. It would be voluntary and industry-led, with participants required to follow its rules. Initial design work has received funding, but further support to establish it depends on approval of the final design. The proposal does not establish a new statutory regulator.

For farming, the paper sets out a planned 2027 call for evidence on a possible common code or standard for regenerative agriculture and related product claims. That process has not yet produced an adopted national standard. A separate market-discovery phase will examine gaps in the skills and support needed to prepare nature projects for finance, while decisions on the payment principles remain ahead.