But developers complain the system adds thousands of pounds to housing costs and delays construction.
Natural England itself sells nutrient credits, prompting accusations of a conflict of interest because it advises on the environmental requirements while also offering developers a way to meet them.
Its Government-funded scheme was launched in 2022 with an ambition to help unlock 40,000 homes.
But figures reported in December 2025 showed £28million had been spent while certificates had been issued for just 2,999 homes – fewer than one in 13 of the original target.
Henri Willmott, who leads environmental projects at Biocore Agri, a British organic fertiliser manufacturer, accused Natural England of marking its own homework.
His company is challenging the watchdog over plans to let farmers earn pollution-offset credits by switching from chemical fertilisers rather than taking land out of production.
He said: “You wouldn’t let the Financial Conduct Authority run a hedge fund or the Civil Aviation Authority run an airline so why is an environmental regulator participating commercially in the nature markets it oversees?”
Biocore Agri claims Natural England initially accepted its proposed scheme before reversing its position over how pollution savings would be calculated.
“They create the problem and they sell the solution,” Mr Willmott said.
“Natural England are acting as judge, jury and executioner.
“They decide who can enter the market, set market standards whilst milking their own rules as a revenue stream. That is the conflict of interest.”
The Government has already moved to reduce planning bureaucracy.
On October 1, ministers announced reforms after Government figures suggested nearly a third of the 22,500 planning consultations referred to Natural England annually were unnecessary.
The watchdog has also come under fire over expensive measures to protect wildlife on major infrastructure projects.
At Hinkley Point C nuclear power station, developer EDF says it is spending more than £700million on three fish protection systems.
These include an underwater “fish disco” using sound to scare fish away from the plant’s cooling-water pipes.
On high-speed train development, HS2, Natural England gave advice and licensed a £95million structure near Sheephouse Wood in Buckinghamshire to protect rare Bechstein’s bats from passing trains.
Farmers have also clashed with the organisation over restrictions on grazing and controlled heather burning.
On Dartmoor, Natural England advice to reduce grazing sparked fears of a mass cull of the moor’s famous ponies. Ministers intervened after protests and ruled that ponies would no longer count towards grazing limits in new environmental agreements.
And in the north of England, Moorland managers are warning restrictions on heather burning are increasing wildfire risks by allowing dry vegetation to accumulate. Mr Carmichael said increasingly restrictive rules on rural land could also threaten Britain’s food security.
“Natural England needs to have a sense of stewardship that farmers do, which runs deep into the farming psyche,” he said.
“Food security is national security and we need to do more to protect and grow food and too often Natural England is standing in the way of this.”
Natural England maintains protecting wildlife, supporting farming and enabling development should go hand in hand. It says its statutory duties require it to safeguard vulnerable habitats while helping developers and land managers find practical solutions.