Can my land generate biodiversity credits?
Possibly. Whether your land can generate biodiversity credits comes down to three things: what grows and lives on it, whether anyone is buying those credits, and whether you are prepared to commit the land to conservation for good.
Each of those can be checked before you spend money on a formal assessment.
What a biodiversity credit is
A biodiversity credit is the unit NSW uses to measure biodiversity under the Biodiversity Offsets Scheme.
When a development clears native vegetation, the developer usually has to offset that loss. They do it by buying and retiring credits created on land that is being conserved somewhere else.
There are 2 kinds. Ecosystem credits measure ecosystems. Species credits measure threatened species that cannot be reliably predicted from the vegetation alone.
The 3 things that decide it
1. What is on the land
Credits are created from the native vegetation and habitat a site can conserve and improve.
The plant community types mapped on your lot, their condition, and any threatened ecological communities or species all shape the class and number of credits the land could produce.
A paddock that has been cropped for decades has little to work with. Remnant bushland may have a lot.
2. Whether anyone is buying
Credits only turn into income when they sell.
Demand depends on developers and agencies needing that type of credit to meet an offset obligation.
NSW publishes current credit demand, and the free Credits Near Me NSW app shows what is being sought in your area. Both are worth a look before anything else.
3. Whether you will commit the land
Credits are created through a Biodiversity Stewardship Agreement (BSA) with the NSW Biodiversity Conservation Trust.
A BSA is registered on the title and runs with the land in perpetuity. It binds future owners too.
That is the trade. The land earns, and the conservation commitment is permanent. We cover it in more detail in what a stewardship agreement commits you to.
How the money works
When credits sell, part of the price goes into a Total Fund Deposit. The Biodiversity Conservation Trust holds and invests it, and pays you annually to manage the site under its management plan.
The credit market sets the price, but the price has to be enough to cover the Total Fund Deposit. Anything above that, the landholder can keep as profit.
How to find out, in order
- Check demand for free. Look at the NSW credit demand page and the Credits Near Me NSW app.
- Get a desktop read on your lot. Find out which vegetation is mapped, what it could indicatively produce, and what similar credits have sold for. Our Biodiversity Value & Market Report is built for this step, before you pay for fieldwork.
- Commission a formal assessment. An accredited assessor applies the Biodiversity Assessment Method (BAM) on site. Their report sets the credits you can actually sell.
- Apply for a BSA. The application is checked against legal and technical requirements before the agreement is registered on title.
Step 2 is about deciding whether step 3 is worth paying for. It does not replace it.
Common questions
Can any land generate biodiversity credits?
No. Credits come from native vegetation and threatened species habitat that a site can conserve and improve. Land that is mostly cleared or cropped generally has little to generate credits from.
Who decides how many credits my land creates?
An accredited assessor, using the Biodiversity Assessment Method. Their report sets the class, type and number of credits the site can generate.
Who buys biodiversity credits?
Developers who need to offset the impact of a project, government agencies, and the NSW Biodiversity Credits Supply Fund.
Is there a free way to check demand?
Yes. NSW publishes current biodiversity credit demand, and the Credits Near Me NSW app shows what is being sought near you.
Sources
- Biodiversity credits, NSW Biodiversity Offsets Scheme
- Generate and sell biodiversity credits, NSW Government
- Total Fund Deposit and discount rate, NSW Government
This article is general information, not legal, financial or tax advice. A MapCheck report is a preliminary screening tool.