Developers will be able to purchase 'nutrient credits' that will discharge the requirement to provide nutrient pollution mitigation in order to be granted planning permission under new Government plans.
Alongside the credit scheme, the Government has also announced a new legal duty on water companies in England to upgrade wastewater treatment works by 2030 in 'nutrient neutrality' areas.
The policy proposals come a week after the Court of Appeal rejected a claim for judicial review of Fareham Council's decision to grant permission for new housing applying Natural England's nutrient neutrality advice for the Solent.
Disputes over nitrates began in 2019 when Natural England said that a ruling in the Netherlands on the interpretation of the Habitats Directive meant it had to take a more cautious approach than before when advising on assessments under the directive for residential development.
Increased levels of nutrients like nitrogen and phosphorus can speed up the growth of certain plants, disrupting natural processes and impacting wildlife. Currently, local planning authorities can only approve a plan or a project if they are certain it will have no negative effect on legally protected sites for nature.
The new credit programme, named the 'Nutrient Mitigation Scheme', will be established by Natural England.
The regulator will accredit mitigation delivered through the scheme, enabling local planning authorities to grant planning permission for developments which have secured the necessary nutrient credits. "This will ensure developers have a streamlined way to mitigate nutrient pollution, allowing planned building to continue and creating new habitats across the country," the announcement claims.
Natural England will invest the funds in projects like new and expanded wetlands and woodlands.
The Government said that the policy would help support the delivery of tens of thousands of homes currently in the planning system by significantly reducing the cost of mitigation requirements.
Alongside this, the Government announced a new legal duty on water companies in England to upgrade wastewater treatment works by 2030 in 'nutrient neutrality' areas to the highest achievable technological levels. The duty will be implemented via an amendment to the Levelling Up and Regeneration Bill. The Government said it wants these improvements to be factored in for the purposes of a Habitats Regulation Assessment.
The Levelling Up Secretary, Greg Clark, said it is "essential that new homes do not impair the quality of our rivers, streams and wetlands".
"These measures will ensure the development can take place, but only where there is practical action taken to protect our precious aquatic habitats."
The nutrient credit scheme is due to open in the Autumn. All affected areas can continue to access practical support from the Government and Natural England in meeting nutrient neutrality requirements, the Government said.
Last month, the Local Government Association (LGA) raised concerns over the impact of nutrient and water neutrality on housing supply, highlighting that more than 7% of all of England's planned house building cannot go ahead due to river pollution levels.
The LGA argued the majority of pollution was caused by agriculture and water companies. It also noted that 23 councils had more than 90% of likely house-building areas impacted by nitrate neutrality issues. Forty councils, meanwhile, have more than a quarter of their likely house building impacted. Almost a third of building in the whole of the Northeast of England is impacted, it added.