A NSW Government website

How the Biodiversity Offsets Scheme works


The Biodiversity Offsets Scheme uses a transparent, consistent and scientific approach to assess biodiversity values and offset impacts from developments and other projects with a significant impact on biodiversity.  

Impacts are offset with gains in biodiversity at stewardship sites with the aim of delivering no net loss to biodiversity. 

Generate credits with a Biodiversity Stewardship Agreement

Avoiding, minimising and offsetting development impacts

‘Avoid, minimise, offset’ hierarchy  

The scheme is based on the 'avoid, minimise, offset' hierarchy. Where the scheme applies, developers and other proponents must:


Consider whether a proposal can avoid impacts on biodiversity


Consider whether the proposal can minimise impacts that cannot be avoided


Offset any remaining impacts on biodiversity (if the project is approved)

The Biodiversity Assessment Method provides guidance on how to avoid and minimise impacts and calculate offsets. This is documented in a Biodiversity Development Assessment Report or Biodiversity Certification Assessment Report that the proponent provides to a decision maker with the project application.   

Learn more about the Biodiversity Assessment Method.

Offsetting impacts to a standard of no net loss

The scheme assesses impacts to biodiversity from development and gains at stewardship sites to a no net loss of standard, which is calculated using the Biodiversity Assessment Method.  

The Biodiversity Assessment Method provides a consistent method to assess:  

  • impacts on biodiversity values from a proposed development, activity, clearing or biodiversity certification  
  • improvements in biodiversity values from management actions undertaken at a stewardship site.  

Biodiversity credit obligations are created at project impact sites, and biodiversity credits are created at biodiversity stewardship sites. Credit obligations must generally be met before the impact on biodiversity occurs.

Biodiversity credit obligations

Generating credit obligations

Credit obligations are generated when projects that have unavoidable impacts on biodiversity are approved. The credit obligation will set out the number and class of biodiversity credits that the developer or other proponent must retire to offset their proposal, generally before any impacts can commence.  

To learn more, go to Credit obligations.

Meeting credit obligations

Developers and other proponents can meet their credit obligations by purchasing and retiring like-for-like credits, transferring their obligation to the Biodiversity Conservation Trust by paying into the Biodiversity Conservation Fund, or using variation rules or funding biodiversity conservation actions in certain circumstances.  

To learn more about the options for meeting a credit obligation go to Offset rules

To learn more about finding credits on the market go to Find credit buyers and sellers.

Biodiversity stewardship sites

Biodiversity stewardship sites help conserve habitat for native species and ecosystems. By setting up a biodiversity stewardship site, landholders can generate biodiversity credits that can be sold to fund the management of weeds, pests and fire, and ecological restoration. Biodiversity stewardship site agreements are in perpetuity and registered on title. To learn more about stewardship sites, visit the webpage Generate credits with a Biodiversity Stewardship Agreement.