Report highlights: Effectiveness of the Biodiversity Offsets Scheme

What the report is about

This audit examined whether the Department of Planning and Environment (DPE) and the Biodiversity Conservation Trust (BCT) have effectively designed and implemented the Biodiversity Offsets Scheme (‘the Scheme’) to compensate for the loss of biodiversity due to development.

Under the Biodiversity Conservation Act 2016, the Scheme enables landholders to establish in-perpetuity Biodiversity Stewardship Agreements on sites to generate credits for the unique biodiversity on that land. These credits can be sold to offset the negative impact of development on biodiversity.

What we found

DPE has not effectively designed core elements of the Scheme. DPE did not establish a clear strategic plan to guide the implementation of the Scheme.

The BCT has various roles in the Scheme but lacked safeguards against potential conflicts, creating risks to credit supply.

The effectiveness of its implementation has also been limited. Key concerns around the Scheme’s transparency, sustainability and integrity are yet to be fully resolved.

A market-based approach to biodiversity offsetting is central to the Scheme's operation but credit supply is lacking and poorly matched to growing demand. DPE has not established a clear, resourced plan to manage the shortage in credit supply. Data about the market, published by the DPE and the BCT, does not provide an adequate picture of credit supply, demand and price to readily support market participation.

These factors create a risk that biodiversity gains made through the Scheme will not be sufficient to offset losses resulting from development, and that the DPE will not be able to assess the Scheme’s overall effectiveness.

DPE is leading work with the BCT to improve the Scheme, but this is not yet guided by a long-term strategy with clear goals.

What we recommended

The audit made 11 recommendations to DPE and the BCT, focusing on:

  • a long-term strategic plan for the Scheme
  • improvements to the operation and transparency of the market and credit supply
  • frameworks to ensure the financial and ecological sustainability of biodiversity stewardship sites
  • enhanced public reporting and data management
  • resolving issues in conflicting governance and oversight.


 Fast facts

  • 96% –  proportion of developer demand for species credits not met by current supply
  • 97% – proportion of species credits that have never been traded on the biodiversity market
  • 60% – proportion of the 226 Biodiversity Stewardship sites under active land management
  • $90m – value of developers’ obligations paid directly into the Biodiversity Conservation Fund
  • 20% – proportion of developer obligations transferred to the BCT that have been acquitted.

Further information

Please contact Ian Goodwin, Deputy Auditor-General on 9275 7347 or by email.