IPART is monitoring the NSW Biodiversity Credit Market
Healthy biodiversity is important for the quality of life of current and future generations. The biodiversity credits market plays a key role within the NSW Biodiversity Offsets Scheme to ensure biodiversity losses due to development or land clearing are offset by equivalent biodiversity gains at a price that reflects the efficient cost of conserving biodiversity.
We have been asked to monitor the biodiversity credits market for 3 years from 2022-23 and make findings and recommendations with the aim of:
- maintaining and promoting competition
- addressing the interests of existing and potential biodiversity market participants, and supporting fair trading
- identifying opportunities to improve market efficiency and address market failure.
We have published our first Annual Report for 2022-23, which found several key challenges affecting fundamental aspects of the market such as pricing, transaction costs and barriers to entry. We have made recommendations including 4 priority actions to remove price distortions, and other actions to reduce entry costs and make the market more accessible for landholders and development proponents to trade credits.
We would like to thank all stakeholders who engaged with us throughout our review of the market in 2022-23.
In December 2024 we will publish our next Annual Report, which will consider the Government’s response to our recommendations as part of our review of the market’s performance in 2023-24.