Credit obligations

Credit obligations are generated by a development or clearing activity resulting in unavoidable biodiversity impacts.

Five key steps

There are 5 key steps for generating credit obligations and buying credits to meet the obligation.

Creating credit obligations flowchart

In the early stages of the project the proponent needs to determine whether the Biodiversity Offsets Scheme (BOS) applies to their proposed activity.

The BOS applies to:

  • Local development (assessed under Part 4 of the Environmental Planning and Assessment Act 1979) that is likely to significantly affect threatened species or triggers the BOS threshold. 
  • State significant development and state significant infrastructure projects, unless the Secretary of the Department of Planning and Environment and the Environment Agency Head determine that the project is not likely to have a significant impact
  • Biodiversity certification proposals
  • Native vegetation clearing in urban areas and areas zoned for environmental conservation that exceeds the BOS threshold and does not require development consent 
  • Native vegetation clearing that requires approval by the Native Vegetation Panel under the Local Land Services Act 2016  
    Activities assessed and determined under Part 5 of the Environmental Planning and Assessment Act 1979 (generally, proposals by government entities), if proponents choose to ‘opt in’ to the Scheme. 

More information about when the threshold will be triggered is available at When does the BOS apply?

If the BOS does apply to a development or activity, the proponent must engage an accredited assessor to apply the Biodiversity Assessment Method (BAM) to the proposal. 

The Department keeps a public register of individuals accredited to apply the BAM

Access the accredited assessor register.

After applying the BAM, the accredited person will prepare a Biodiversity Assessment Report (BAR) that sets out how the proponent has applied steps to avoid and minimise impacts on biodiversity, and setting out the number and type of ecosystem and species credits required to offset residual impacts of the activity on biodiversity (‘credit obligation’).  

In the application for the development or clearing, the proponent can propose to meet the credit obligation using the variation rules rather than the like-for-like rules. The proponent must demonstrate that they have been unable to find like-for-like after completing the required Ancillary rules: Reasonable steps to seek like-for-like biodiversity credits (PDF 58KB). The proponent may also use Ancillary rules: Biodiversity conservation actions (PDF 69KB) as an alternative to retiring credits.

When completed, the proponent must submit the BAR to the relevant decision maker as part of their application.

When the application has been received by the decision maker, the decision maker must consider whether the proposal may have a ‘serious and irreversible impact’. For some approval pathways, if the decision maker determines that the development is likely to result in a serious and irreversible impact, the development or activity can't proceed. Proponents are encouraged to discuss any potential serious and irreversible impacts with the decision maker before making their formal application.

The decision maker then assesses the application against the requirements of the legislation that the application is being assessed under. The decision maker will determine whether to approve or refuse the application, including by considering the impacts on biodiversity, which is likely to be only one of multiple issues to be considered.

For the impacts on biodiversity, the decision maker will assess the Biodiversity Assessment Report against the legal and technical requirements of the Biodiversity Conservation Act 2016, Biodiversity Conservation Regulation 2017 and the Biodiversity Assessment Method.

If the decision maker approves the application, the credit obligation (and any other actions required) will be included as conditions of the relevant approval or consent. The decision maker has the discretion to increase or decrease the credit obligation generated by the Biodiversity Assessment Report (BAR). If the obligation is decreased, the decision maker may be required to publish reasons or seek Department concurrence.

The decision maker can approve use of the variation rules if the proponent demonstrates they have been unable to find like-for-like credits after completing reasonable steps, or funding of biodiversity conservation actions to meet the credit obligation. These should be set out in the conditions of consent.

Other conditions may also be imposed to secure commitments in the BAR that the proponent has made to avoid or minimise impacts on biodiversity.

When the decision maker has issued the approval or consent that includes the final credit obligation, proponents have 3 ways to satisfy this obligation by either:

  1. They can identify the required 'like for like' credits in the market through the BOS public registers, then purchase the appropriate credits using the BOS transaction forms
  2. If they have a suitable site, they can develop a Biodiversity Stewardship Agreement (BSA) with the BCT to meet the credit requirements.
  3. They can use the offsets payment calculator to determine the cost of the credit obligation, and pay this amount into the Biodiversity Conservation Fund. The Biodiversity Conservation Trust is then responsible for identifying and securing the credit obligation.

Proponents may also be able to use biodiversity conservation actions or mine site rehabilitation.

When the proponent has completed these steps for all credits that the proponent is required to retire, they can proceed with their activity in accordance with their approval. The decision maker is responsible for ensuring compliance with credit obligations, and any other conditions of the consent or approval.