The Department for Food Environment and Rural Affairs (Defra) has gone out to tender with a contract to establish a trading platform contract for an innovative nutrient trading pilot project in the Solent area.

Photo courtesy NASA: aerial view Solent and the Isle of Wight

Defra, working with the Environment Agency, Natural England and the Ministry of Housing, Communities and Local Government (MHCLG), is delivering the Solent project over two years (2020-2022).

In September 2020, Her Majesty’s Treasury (HMT) confirmed funding from the Shared Outcomes Fund (SOF) to trial market and nature-based solutions to unblock housing delivery whilst understanding nitrogen pollution pathways and impacts on protected wildlife sites in the Solent area.

The project will pilot a trading process, supported by an online trading platform, for long term (80 years+) land use changes for nitrogen pollution mitigation in 2021/22 in the Solent area.

The Solent is home to a range of nationally and internationally important habitats and bird species for which it has been designated.

However, many of the sites are in unfavourable condition due to excess nutrients (particularly nitrogen) in the water from a range of sources, including agriculture and wastewater.

Natural England has advised local planning authorities that demonstrating ‘nutrient neutrality’ (i.e. zero net impact on nitrogen pollution of the protected sites for 80+ years) is a way of allowing development to proceed, while ensuring it does not further damage the condition of the protected site features.

There is an estimated backlog of at least 5,500 houses (at least partly due to nitrogen pollution) across the Solent catchment awaiting planning permission; a lack of offsite mitigation has meant some developments have struggled to demonstrate ‘nutrient neutrality’.

Defra is piloting a nutrient trading process to enable developers and local planning authorities in need of nitrogen pollution mitigation solutions to connect via an online platform with farmers and land managers able to provide such solutions.

The pilot, funded through Government’s Shared Outcomes Fund, will test the feasibility and cost effectiveness of this approach, using a trading process, and explore how multiple benefits for people and nature can be maximised. The approach will bring together relevant local actors - house builders, developers, local authorities, landowners (including farmers and wildlife organisations) - and statutory bodies (NE and EA).

The Solent Nutrient Trading Pilot project, which started in late 2020 and runs through to September 2022, consists of four key work packages:

1. Stakeholder engagement (including a recently completed rapid user research phase) to understand user needs and inform the design of the trading process

2. Water quality modelling and opportunity mapping – to better understand pollution sources and pathways and opportunities to deliver wider benefits (e.g. natural flood risk management). Phase one of this ongoing work will be completed before successful contractor is in place.

3. Development and implementation of online nutrient trading platform and associated trading process/rules and governance – drawing on evidence from the two work packages above - the contract The Authority are procuring here.

4. Monitoring and evaluation – contractor should be in place.

The workstreams are interconnected and findings from workstreams 1, 2 and 4 will be shared with the contractor appointed to develop and implement the online nutrient trading platform

If successful, the pilot will unlock housing delivery whilst delivering wider environmental benefits. Defra would then look to continue implementation of the trading approach in the Solent area and also consider roll out of the approach to other parts of England facing similar challenges. Defra would also like to explore the potential for the private sector to take a lead role in taking this forward.

Anticipated contract start date is 6 September 2021 and end date is 30 September 2022.

Deadline to submit tenders is 12pm on 4th August 2021 – click here to access the tender documentation.