Generating and selling biodiversity credits

Landholders establish a biodiversity stewardship site on their land, generating credits to sell to developers or landholders who need those credits to securely offset activities at other sites.

The Biodiversity Conservation Trust facilitates the generation of biodiversity credits.

Four key steps

There are 4 key steps in the process for generating and selling credits.

Generating credits flowchart

First, the landholder needs to establish that:

  • their land meets the eligibility criteria 
  • they can meet the fit and proper person test 

In the early planning stage, it is recommended that a landholder seeks advice from an accredited assessor to identify the likely types of credits that will be generated on their site. It's also recommended that the landholder consults with any property interest holders at this stage. Property interest holders may include banks or mining lease holders.

Before they begin to formally apply, landholders may also want to advertise their site on the Expression of interest register to identify potential purchasers of credits.

The landholder must employ an accredited assessor to apply the Biodiversity Assessment Method (BAM) to their site. The assessor will produce a Biodiversity Stewardship Site Assessment Report (BSSAR). This report will set out:

  • The class, type and number of credits generated by placing a Biodiversity Stewardship Agreement (BSA) on the site, and
  • A proposed management plan for the site, which will be included in the BSA. 

The Biodiversity Conservation Trust is responsible for entering into BSAs with landholders. When the BSSAR has been prepared, the landholder submits their application (including the BSSAR) to the Biodiversity Conservation Trust using the Biodiversity Offsets and Agreement Management System (BOAMS) with the relevant fees.

The Biodiversity Conservation Trust assesses the landholder’s application against relevant legal and technical requirements and agrees on the terms of the Biodiversity Stewardship Agreement (BSA). The BSA will include a management plan that sets out proposed annual management actions and the cost of those actions over a 20 year period, and the ongoing maintenance costs. The total costs are called the Total Fund Deposit.

When the BSA is agreed and entered into by the Biodiversity Conservation Trust and the landholder, the agreement and credits will be registered on the relevant registers. The agreement will also be registered on the title of the land. 

The landholder can:

Sell the credits to either the Biodiversity Conservation Trust or a private purchaser such as a developer. The sale will be recorded in the public register of credit transactions.

  • Pay the Total Fund Deposit to the Biodiversity Conservation Trust. They will deposit it in the Biodiversity Stewardship Payments Fund. The Department will then transfer ownership of the credits to the buyer.
  • The first amount of money from any sale of credits or a retirement of credits (without first selling them) is used to pay the total fund deposit. If you only sell part of the credits - that part of the TFD needs to be paid. 
  • Retire credits themselves if they choose to. This could be for philanthropic purposes or for their own development.

When the total fund deposit is fulfilled, landholders receive their first annual management payment and the site moves into ‘active management’. This means the landholder must start actively managing their site (e.g. weed management) in accordance with the agreed management plan.

The first amount of money from any sale of credits or a retirement of credits (without first selling them) is used to pay the total fund deposit, or part thereof. Any additional money that is made from the sale of credits beyond the TFD amount can be retained as a profit by the landholder.

The BCT will make annual payments to the landholder over the 20-year period, and the landholder is required to report annually to the Trust. After the 20-year period, the landholder can re-apply parts of the Biodiversity Assessment Method (BAM) to renew the active management plan or continue to receive payments to maintain the BSA site.

The BCT is responsible for ensuring landholders comply with their obligations. Landholders may be subject to auditing and other compliance activities by the BCT or the Department.

More information: Biodiversity Conservation Trust