Generating and selling biodiversity credits

Landholders can establish a Biodiversity Stewardship Agreement on their land and generate credits to sell through the NSW biodiversity market.

The sale of credits funds ecological restoration and conservation and management of weeds, pests and fire. 

The Biodiversity Credits Supply Taskforce works with landholders to establish Biodiversity Stewardship Agreements (BSAs) and facilitates the generation and sale of biodiversity credits.

Five key steps

There are 5 key steps for establishing a BSA and selling credits.

Landholders can check the Current In-Demand Credits List or submit a Stewardship Expression of Interest to find out if there are in-demand credits on their land.

The site is assessed using the Biodiversity Assessment Method by an Accredited assessor. The assessor’s report will set out:

  • the class, type and number of credits generated by the BSA
  • a proposed management plan for the site which will form part of the BSA .

This may also be the time to start discussing the proposed BSA with any property interest holders (eg banks and other landholders). Landholders can also start looking for a credit buyer or finding out if the Biodiversity Credits Supply Fund could buy the credits.

An application for a Biodiversity Stewardship Agreement (BSA) is made by the landholder, or another person acting on behalf of the landholder. Applications are checked for legal and technical requirements, including that the BAM has been correctly applied.  

The BSA is then prepared based on a standard template. It includes the number and type of credits generated, a payment schedule for annual payments to the landholder (total is called the Total Fund Deposit), and a management plan for the site to improve biodiversity, plus other terms and conditions. The BSA is signed by the landholder and Minister’s delegate. The agreement is registered on title and runs with the land. Credits are issued when they are registered.

Buyers include proponents who need credits to offset development, or governments who need to offset the impact of infrastructure projects or as part of a conservation program. Government also buys credits for onselling through the Credits Supply Fund or the Biodiversity Conservation Fund.

The sale of credits is recorded in the public register of credit transactions.

By selling the credits, the landholder uses the proceeds of sale to pay the Total Fund Deposit (TFD), which provides for the site to be managed in the long-term through annual management payments made by the Biodiversity Conservation Trust (BCT).

Any additional money that is made from the sale of credits beyond the TFD amount can be retained as profit by the landholder.

Once the BSA is signed, the landholder is responsible for implementing the BSA. When the Total Fund Deposit is also paid, landholders receive their first annual management payment and the site moves into ‘active management’ when there are additional requirements for active management (e.g. weed and pest management).

The BCT makes annual payments to the landholder over 20 years. There are 5-yearly reviews of the plan, and the BAM can be re-applied and the management plan updated after 20 years. Landholders may be subject to auditing and other compliance activities by the Taskforce, BCT or the Department.