NEIRF Round 3: Insights into the 50 newest NEIRF projects
Analysis of the farmer-focused third round of the Natural Environment Investment Readiness Fund shows that Defra is supporting projects with a range of objectives – here is our quick run-down.
The 50 projects awarded funding in the third round of the trailblazing Natural Environment Investment Readiness Fund (NEIRF) got up and running in the autumn and have now been announced. The projects are distributed across 48 organisations, all taking a share of the £5 million funding made available by the Environment Agency & the Department for the Environment, Farming & Rural affairs (DEFRA).
Two rounds of NEIRF funding have previously been allocated, with 86 projects already supported across England. The first round awarded 27 projects in July 2021, and the second round awarded in May 2022. Both rounds totaled £10 million of funding, with the selected 86 projects across England receiving grants of up to £100,000[1]. Round two looked at further developing a diverse variety of ecosystem services. Round three has been targeted at projects looking at supporting farmers in accessing nature markets by generating revenue from natural capital alongside food production.
In the third round of NEIRF, the funding allocated to projects ranges from £49,358 to £100,000, with an average grant amount of £96,233 per project. The funding supports a variety of ecosystem services, including biodiversity uplift for biodiversity net gain, natural flood management, regenerative agriculture, and peatland restoration.
Our analysis has found a strong emphasis on projects centered on regenerative agriculture and the generation of ecosystem service credits. More projects are exploring developing ecosystem services, such as the three projects focusing on biochar to support habitat creation. At Accelar, we’re proud to be contributing to one such project, supporting Albanwise Environment Ltd. in Norfolk. This initiative, backed by NEIRF funding, aims to revive opportunities for woodland coppicing through the biodiversity improvements alongside whole life carbon reduction based on biochar applications.
A prominent theme continues to be biodiversity net gain (BNG), a market whereby prices are more viable for landowners looking to diversify their income stream and support nature recovery. Projects such as the Duddon Farm Cluster, Severn Valley Wetlands Project, and Blackwater Environmental Investment for Conservation project highlight BNG as a primary focus. Notably, 23 of the 50 projects in this round of NEIRF include the creation of BNG units. With the launch of mandatory BNG in February, this is becoming one of the UK’s more established nature markets. However, further efforts are needed to support the development of this market. Accelar’s BNG Finder can help by connecting buyers and sellers of BNG units across the country, offering curated options and enabling developers and suppliers to make informed decisions.
Many of the successful projects focus on multiple ecosystem services, indicating a preference by the Environment Agency (EA) and DEFRA for initiatives that deliver co-benefits—a trend carried forward from NEIRF round 2. This is visualized in the second graph, which indicates that the number of ecosystem services provided significantly outstrips the total number of projects funded.
The organisations awarded funding span the public, private and third sectors. Charities received the largest allocation of funding, followed by the private sector and the public sector. This round of grants has significantly extended the spatial coverage of NEIRF-funded projects, as illustrated in the map below. Funding has now been distributed across all regions of England. However, spatial disparities in funding allocation remain. For instance, areas such as Worcestershire, Staffordshire, East Yorkshire, and Cambridgeshire have not received the same density of funding as regions like Sussex and Surrey.
Accelar’s Nature Finance Impact Hub showcases a variety of investable nature projects across the UK and beyond. NEIRF round two projects and the ecosystem services they cover can be seen in the hub, with further details on round three projects to be added shortly. Projects can also be registered for free here.
Accelar has been supporting many land management businesses, charities and the public sector to get their nature recovery projects off the ground using private and blended green finance. We are always interested in comparing notes or if you need a bit of specific help taking your project towards investment readiness, why not get in touch? You can also read about some of our previous projects via these case studies.