IPART has released final findings and recommendations as part of its third and final annual review into the NSW biodiversity credits market.
Tribunal member Jonathan Coppel said a well-functioning biodiversity credits market was important to ensure development takes place in a way that conserves our unique natural environment, and to meet the objectives of the Biodiversity Conservation Act 2016.
“Our third Annual Report has found that key challenges remain, including:
- The Biodiversity Conservation Fund continues to hold a significant number of obligations, and a growing proportion of these have not been met on a like-for-like basis.
- The risk that the Fund will not be able to source like-for-like credits to meet its obligations is not adequately considered in Fund charges or in current planning processes.
- Trading in the market continues to be administratively complex, and improvements to the quality and reliability of market data are needed.
- There is limited reporting on the environmental outcomes of the Scheme, including which offsets have been delivered and using what pathways.
- Key government entities continue to have multiple, overlapping roles and objectives, which risk creating conflicts of interest and impacts participants’ confidence to participate in the market.”
Mr Coppel said the NSW Government has made changes to the credits market in recent years, including to require the Biodiversity Conservation Trust to meet offset obligations paid into the Fund within 3 years, and to improve participants’ access to information. Further changes are also proposed to improve various aspects of the market, including reducing reliance on the Biodiversity Conservation Fund.
“These changes will take time to work their way through, and the market is showing some early signs of improvement. However, there are still fundamental shortcomings of the market that need to be addressed to ensure its success over the long run.” Mr Coppel said.
“For example, the Biodiversity Conservation Trust should be required to take into account the risk that it cannot secure like-for-like credits when accepting obligations.”
“We have released an Annual Report that outlines our findings on the performance of the market in 2024-25 and recommends how the NSW Government should improve it. We thank all stakeholders for engaging with IPART’s review and sharing their views on the credits market.”
Stakeholders can read more information via IPART’s website.
Media Contact: Mark O’Brien, 0427 105 865, media@ipart.nsw.gov.au.