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Good practice Imported

NSW Biodiversity Offsets Scheme (Australia)

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Evidence: Observational / pre–post Top 47% 47/100 · Ask Evidence Copilot about this practice

Largest biodiversity credit market in Australia: 381 stewardship agreements covering 109,911 ha under NSW Biodiversity Conservation Act 2016. A$467M Stewardship Payments Fund (March 2025). 2022 audit: 86–97% of credits untradeable; 2024 reforms mandated net-positive outcomes.

381 agreements
Active Biodiversity Stewardship Agreements (as of January 2026)
109,911 hectares
Land under stewardship agreements (as of January 2026)
467.74 AUD million
Biodiversity Stewardship Payments Fund balance (31 March 2025)
30.3 AUD million+/year
Annual management payments distributed (n/a)
86 %
Ecosystem credit trading groups never traded (2022 audit)
97 %
Species credits never traded (2022 audit)
1 in 7 ratio
Offset conditions non-compliant or potentially non-compliant (2022 audit)
NSW Biodiversity Offsets Scheme (Australia)

Details

Maturity
Established
Promoter
NSW Biodiversity Conservation Trust (BCT) / NSW DCCEEW
Period
2017–present
Keywords
biodiversity credits, woodland, grassland, statutory offsets, threatened species

Context

The NSW Biodiversity Offsets Scheme (BOS) was established under the Biodiversity Conservation Act 2016 and replaced the earlier BioBanking Agreement Scheme (2008). It requires developers whose activities impact native vegetation or species to retire biodiversity credits equivalent to the assessed loss; credits are generated by landholders who enter voluntary Biodiversity Stewardship Agreements (BSAs) to permanently manage and protect habitat.

Objectives

Offset unavoidable biodiversity impacts from development through a statutory credit market, with landholders permanently managing and protecting habitat in exchange for payments.

Activities

The NSW Biodiversity Conservation Trust (BCT), an independent statutory body, holds and disburses the Biodiversity Stewardship Payments Fund and manages the Biodiversity Credits Supply Fund. The Biodiversity Conservation Amendment Act (November 2024) introduced net-positive biodiversity outcomes requirements and improved market transparency; most provisions took effect in March 2025.

Results

As of January 2026, 381 landholders hold active BSAs covering 109,911 hectares across New South Wales. The BCT holds A$467.74 million in the Biodiversity Stewardship Payments Fund (31 March 2025) and distributes over A$30.3 million per year in management payments. The Biodiversity Credits Supply Fund had purchased A$98.7 million worth of credits and on-sold A$97.5 million by April 2025.

Conclusions

The 2022 NSW Audit Office performance audit found that 86% of ecosystem credit trading groups and 97% of species credits had never been traded, and that one in seven environmental offset conditions was non-compliant or potentially non-compliant. The 2023 Henry Review found the Act's operative provisions "incapable" of supporting its biodiversity objectives, prompting the 2024 legislative reform.

Implementation
Indicative cost
Very high (> €5M) — A$467.74 million held in the Biodiversity Stewardship Payments Fund (31 March 2025); A$30.3M+/year distributed in management payments; the Credits Supply Fund purchased A$98.7 million and on-sold A$97.5 million of credits by April 2025.
Time to results
Long (> 3 years) — Scheme established 2017 (replacing the 2008 BioBanking scheme); stewardship agreements are typically permanent; major legislative reform took effect March 2025.
Staffing & skills
NSW Biodiversity Conservation Trust (BCT) — independent statutory body administering payments, NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW) — scheme oversight, NSW Audit Office — independent compliance auditing, Accredited biodiversity assessors and landholders entering BSAs

Conditions for success

  • Independent statutory trust (BCT) managing a perpetual payment fund separate from government budget cycles
  • A public credit register for market transparency
  • Willingness to legislate reform (2024 Amendment Act) in response to independent audit findings

Common failure modes

  • The 2022 Audit Office review found 86-97% of credits in some categories had never been traded, undermining the offset market's liquidity and function
  • One in seven offset conditions was found non-compliant or potentially non-compliant
  • The 2023 Henry Review concluded the Act's operative provisions were "incapable" of supporting its own biodiversity objectives
  • Backstop reforms (net-positive outcomes) only took effect in March 2025, years after the problems were identified

Where it fits

Governance type
state statutory scheme with independent trust administration
Scale
state-wide (New South Wales)
Income level
high-income

Commonly funded by

National / regional programmes

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Data sources

Where this practice's information was retrieved from, and when.

Attachments

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