Offset rules

The offset rules permit proponents to meet their offset obligation by:

• retiring credits based on the like-for-like rules, or
• funding a biodiversity conservation action that benefits the threatened entity impacted by the development. The action must be listed in the Ancillary rules: Biodiversity conservation actions and meet the other requirements set out by these rules, or
• committing to deliver mine site ecological rehabilitation that creates the same ecological community or threatened species habitat (available for major mining projects only). The ecological rehabilitation must meet the requirements set out in the `ancillary rules for mine site ecological rehabilitation' which will be published by the Environment Agency Head, or
• making a payment to the Biodiversity Conservation Fund calculated using the offsets payments calculator.

If a proponent can demonstrate they were not able to find like-for-like credits and chooses not to use the other offset options, they can seek approval to offset with a broader suite of biodiversity using the variation rules.

There is a hierarchy of offset options for the Biodiversity Conservation Trust (the Trust).

If the Trust decides to move down through the hierarchy of options, the Biodiversity Conservation Regulation 2017 requires that this decision is justified in annual reporting.

The hierarchy of options is:

1. retire credits under the like-for-like rules or fund a biodiversity conservation action that benefits the entity impacted and is listed in the ancillary rules
2. retire credits under the variation rules (noting the variation rules can be applied to all threatened entities, unlike for proponents where impacts on entities identified in the ancillary rules are excluded from the variation rules)
3. fund a biodiversity action that benefits the entity impacted, but this action does not need to be listed in the ancillary rules
4. retire credits under the variation rules, but these credits can be generated from anywhere in the State i.e. the location requirement in the variation rules does not apply
5. use any other conservation measure approved by the Minister for the Environment.

Compared to proponents, the Trust has some additional flexibility to ensure it can meet its offset obligations.

The offset rules provide the following options for a biodiversity certification applicant to meet an offset obligation:

• retire credits based on the like-for-like rules or
• make a payment to the Biodiversity Conservation Fund.

Biodiversity certification applicants can access a broader set of biodiversity credits under the variation rules if they are not able to find like-for-like biodiversity credits after following specific ‘reasonable steps,’ as set out in the Ancillary rules: reasonable steps to seek like-for-like biodiversity credits (PDF 58KB).

For Strategic Biodiversity Certification, the Minister for the Environment may approve the reservation of land under the National Parks and Wildlife Act 1974, development controls under the Environmental Planning and Assessment Act 1979 and other measures to form the package of conservation measures that support a Strategic Biodiversity Certification.

The Biodiversity Assessment Method provides guidance around demonstrating the value of reservation of land under the National Parks and Wildlife Act 1974 or development controls under the Environmental Planning and Assessment Act 1979. The Minister has the discretion to identify any other appropriate conservation measures.

The like-for-like rules seek to ensure biodiversity impacts are offset with biodiversity that is very similar to the biodiversity that is being impacted.

The like-for-like rules require that:

• impacts on native vegetation must be offset with vegetation that is in the same local area as the impact (based on near or adjacent IBRA subregions ⁽¹⁾) and:
  • If a threatened ecological community was impacted, the offset must be for the same threatened ecological community, or
  • If native vegetation that is not a threatened ecological community was impacted, the offset must be vegetation that is the same vegetation class and in the same or higher offset trading group. ⁽²⁾

In addition, if the impacted vegetation contained hollow bearing trees then the offset site must also contain hollow bearing trees.

• Impacts on threatened species (that are not associated with a particular type of vegetation) must be offset with the same threatened species. This offset can be located anywhere in NSW.

⁽¹⁾ IBRA subregions are identified under the Interim Biogeographic Regionalisation for Australia (IBRA) system, which divides Australia into bioregions and subregions on the basis of their dominant landscape-scale attributes.

⁽²⁾ Offset trading groups will be based on how extensively a vegetation type has been cleared and on associations with a threatened ecological community in the NSW Vegetation Information System.

The Biodiversity Conservation Regulation 2017 contains variation rules that provide some flexibility by allowing offsetting with a broader suite of biodiversity that is the same, or more threatened than the biodiversity impacted.

Use of the variation rules to allow offsetting using this broader suite of biodiversity must be approved by the decision maker through conditions of consent.

Before applying the variation rules, the proponent must demonstrate to the decision maker that they have been unable to find like-for-like credits after following the reasonable steps, set out in the Ancillary rules: Reasonable steps to seek like-for-like biodiversity credits (PDF 58KB). In summary, these steps are:

• checking the credit register for the required credits
• contacting landholders on the landholder expression of interest register
• lodging an expression of interest on the credits wanted register.

The variation rules can't be applied by proponents for impacts on some threatened entities listed in the Ancillary rules: impacts on threatened entities excluded from variation (PDF 38KB).  All critically endangered entities are included on this list. This restriction does not apply to the Biodiversity Conservation Trust.

The variation rules require that:

• Impacts on native vegetation must be offset with vegetation that is in the same region as the impact (based on the IBRA region and nearby IBRA subregions) and:
  • Is in the same vegetation formation and is in the same or higher offset trading group
  • In addition, if the impacted vegetation contained hollow bearing trees then the offset site must also contain hollow bearing trees or artificial hollows.
• Impacts on threatened species (that are not associated with a particular type of vegetation) must be offset with threatened species in the same local area as the impact (based on surrounding IBRA subregions) and:
  • impacts on threatened plants must be offset with a threatened plant that is the same or more threatened under the Biodiversity Conservation Act 2016
  • impacts on threatened animals must be offset with a threatened animal that is the same or more threatened under the Biodiversity Conservation Act 2016.