Buying and selling biodiversity credits
The Biodiversity Offsets Scheme has established a market for biodiversity credits that allows people to create, buy and sell biodiversity credits.
Biodiversity credits are created when landowners establish Biodiversity Stewardship Agreements to conserve and manage the biodiversity on their land.
Most demand for biodiversity credits comes from developers with legal obligations to offset the impact of their project on biodiversity.
Subject to regulation, anyone can buy biodiversity credits, including:
- government bodies using the market to achieve conservation outcomes
- government market intermediaries, such as the Biodiversity Credits Supply Fund or the Biodiversity Conservation Fund
- philanthropic organisations
- corporations seeking to meet environmental, social and governance or nature-related commitments.
It is up to buyers and sellers of credits to agree on a price for biodiversity credits; however, the price must cover the relevant proportion of the Total Fund Deposit (land management and other costs) calculated when establishing the credits.
Types of biodiversity credits
Over 1,000 different types of biodiversity credits can be created under the Biodiversity Offsets Scheme. There are rules about which biodiversity credits developers must secure to meet their offsetting obligation. Because most of the demand for biodiversity credits comes from these developers, demand for each type of credit may vary.
The biodiversity credits market is growing
Major projects account for a substantial proportion of all credit demand in the credits market. More than two-thirds of cumulative demand likely relates to state significant development and infrastructure.
This demand is increasing as major projects in the New South Wales infrastructure pipeline seek to offset their development impacts.
The Credits Supply Taskforce was launched in 2022 to:
- help increase certainty for landholders
- reduce the lag time between supply and demand for credits
- assist in further developing the credits market.
For more information, see Generating credits with a Biodiversity Stewardship Agreement.
The total market value of Biodiversity Offsets Scheme credit trades (excluding trades under the previous BioBanking Scheme) in the financial year 2022–23 was $105.1 million, compared with $63.3 million in the previous financial year 2021–22. As the Credits Supply Taskforce ramps up activity, this is expected to grow again in the 2023–24 financial year.
The total value of all market trades to date (including trades under the current scheme and previous BioBanking Scheme) is $763.1 million between 31 May 2010 and 28 November 2023.
Credit demand, supply and price information
There are a range of resources to help people consider:
- the supply, demand and pricing of biodiversity credits
- how to identify buyers and sellers.
An overview of these resources is available in the Summary tables of biodiversity credit market information.
There are 3 tables, which cover information about:
- supply of credits
- demand for credits
- prices of credits.
Independent market monitoring
The Independent Pricing and Regulatory Tribunal (IPART) is monitoring and reporting on the biodiversity credits market for 3 years from 2022–23 to 2024–25. Independent monitoring will support transparency and confidence in the Biodiversity Offsets Scheme and help to improve its operation.
For more information and to see how you can participate visit the IPART website.