Apply for an agreement to generate credits
If you are a landholder, company or local council, you may wish to enter a Biodiversity Stewardship Agreement that will generate biodiversity credits for sale.
What are biodiversity credits and how do they work?
Biodiversity credits are generated by landowners who commit to enhance and protect the biodiversity values on their land through a Biodiversity Stewardship Agreement.
They represent the expected improvement in biodiversity that will result from the protection and management of the site.
Landholders (or their representatives) negotiate the sale price of their biodiversity credits with the credit buyer, which may include developers, the BCT or other interested parties. A portion of the sale price must be paid into the Biodiversity Stewardship Payments Fund to cover the costs of managing the site in-perpetuity. Any remaining income from the credit sale is kept by the landholder as profit. Find out more about Biodiversity credits.
What are Biodiversity Stewardship Agreements?
A Biodiversity Stewardship Agreement (BSA) is a voluntary agreement between the BCT and a landholder to permanently protect and manage an area of land to improve its biodiversity values. It enables you to generate biodiversity credits, which you can sell to:
- a developer; or
- to the BCT; or
- to other interested parties.
The agreement doesn’t have to cover all of your land – you can set aside a portion as an agreement site to be protected and continue other activities on the remainder. You can even undertake some activities on a stewardship site - such as strategic grazing or an ecotourism venture - provided the activity doesn’t have negative impacts on the biodiversity values of the land.
When it comes to managing your agreement site, you can choose to undertake the biodiversity management activities yourself, or use contracted bush regenerators. Either way, annual payments should cover your costs.
Find out more information below:
- Fact sheet – Biodiversity Offsets Program
- Brochure – biodiversity stewardship agreements
- BSA expression of interest form
- BSA Application form
- BSA supporting documents
- Taxation Issues Landholder Guide for details about taxation and council rates under a BSA*
- Nominated bank account form
- BSA Variation form
- BSA template
- BSA management plan template
- Frequently Asked Questions
Entering a Biodiversity Stewardship Agreement - the steps:
Step 1: confirm eligibility for a BSA
- Confirm your land meets the eligibility requirements to enter into a BSA
- Check you meet the fit and proper person test
Step 2: consider submitting an EOI (optional)
- You can choose to advertise your interest in setting up a BSA on the EOI register.
- This allows you to identify potential interested purchasers, before you proceed with establishing a BSA.
- This is an optional step. You can proceed directly to a BSA however most landholders will want to identify firm buyers for their credits before establishing a BSA.
Step 3: engage an accredited assessor to assess the biodiversity values of your site
- The biodiversity values on your land must be assessed by an accredited assessor in accordance with the Biodiversity Assessment Method (BAM) before you can apply for a BSA.
- We recommend that an assessment be conducted in three steps. Step a and b are optional, but allow you to have enough information to make an informed decision about whether you should proceed to a full BAM assessment and Biodiversity Stewardship Site Assessment Report (a BSA application) under step c.
- Step 3a: feasibility assessment
- This is a relatively low-cost, initial assessment to give you information about whether a BSA may be feasible on your land.
- It will likely be a “desktop” assessment (i.e. using existing information and mapping about your proposed site, without physically visiting the site) or may involve a brief site visit (a ‘walkover’) to key areas of your property. Any existing ecological information should be made available to improve the accuracy of this step.
- The accredited assessor will determine the types of vegetation and habitat on your site and will estimate (possibly a range) the number of each credit type that may be generated.
- The accredited assessor should also give you an indication of the likely demand for the type of credits you may generate, i.e. whether there may be a potential buyer for those credits.
- An accredited assessor will generally charge you a fee to undertake a feasibility assessment.
- More detailed information on what should be included in the feasibility assessment is available here.
- Step 3b: business case
- A business case is more detailed and accurate than a feasibility assessment.
- The purpose of the business case is to provide a reliable estimate of the financial viability of establishing the proposed BSA.
- The business case relies on a preliminary field assessment and the knowledge and experience of an accredited assessor to provide an informed estimate of the type and number of credits likely to be created.
- It should also provide you with initial information on the management costs to generate those biodiversity credits (the total fund deposit) as well as the likely minimum price at which those credits could be sold to cover those management costs. This information may be informed by past and current market prices for the credits that will be generated on your site.
- The business case should provide information on the past and current market price for the credits to be generated on your site.
- An accredited assessor will charge you a fee to undertake a business case.
- More detailed information on what should be included in a business case is available here.
- Step 3c: full BAM assessment and preparation of a Biodiversity Stewardship Site Assessment Report
- This is a detailed, comprehensive assessment of the biodiversity values on your site and the management requirements, in accordance with the Biodiversity Assessment Method.
- It involves the preparation of a document called a Biodiversity Stewardship Site Assessment Report and a management plan for the site, which form your application for a BSA. This step is essential to apply for a BSA.
- It will involve a detailed field assessment of the vegetation and (sometimes) the threatened species on site. Threatened species assessment is optional and will involve additional costs (but may generate additional credits for sale).
- It will involve agreeing on a management plan for the site with the accredited assessor, noting there are standard, required management actions that must be undertaken. The number of biodiversity credits you will generate on your land is directly related to the expected improvement in biodiversity values to be achieved through management actions.
- It will accurately determine the number and type of biodiversity credits that can be generated on your site.
- It will specify the in-perpetuity management costs for the site (the total fund deposit) based on the management plan. This is calculated as the total present value of management costs for the site, which the BCT will invest and return to you as annual management payments once you have sold enough credits.
- The report will also provide you with information to determine the likely minimum price at which your credits can be sold to cover your management costs.
Step 4: submit a BSA application
- The landholder submits an application form for a BSA and pays the BSA application fee to the BCT.
- The application includes the Biodiversity Stewardship Site Assessment Report (BSSAR), management plan and supporting documentation listed in the application form and on the BSA Application Supporting Documents guide.
- The application will be reviewed by the BCT. This will generally involve a BCT staff member based in your region visiting your site, along with your accredited assessor.
Step 5: entering into the BSA
- A BSA is a legally binding contract that you enter into with the BCT, through signing the document.
- It is registered on your property title and remains there in perpetuity. It binds any future owners of your land.
- Biodiversity credits are generated and transferred into your ownership. They are listed on the public registers, managed by OEH so they can be seen by interested buyers.
- You are obliged to undertake ‘passive management’ (e.g. refraining from activities that will disturb native vegetation or other fauna habitat such as bush rock and dead timber) as soon as your agreement commences.
Step 6: selling your biodiversity credits
- You can sell your biodiversity credits to a developer, the BCT or use them to offset your own development.
- You determine the sale price of your credits. You should set a price that covers your management costs (total fund deposit), other costs and a desired profit margin, on a per-credit basis.
- Once you sell credits, money from the sale needs to be provided to the BCT until the total fund deposit (management money for the site) is fully met. This money is returned to you once your site enters ‘active management’ (see next step).
- Once your total fund deposit is met, any further money earned from the sale of credits is kept by you, the credit owner.
Step 7: receiving management payments
When your total fund deposit is fulfilled, you receive your first annual management payment and your site moves into ‘active management’. This means that you must start actively managing your site (e.g. weed management) in accordance with your agreed management plan.
The information in this document is general in nature and is intended as a guide only. It is not designed to be, nor should it be regarded, as legal or accounting advice. The NSW Biodiversity Conservation Trust (BCT) will not accept liability for any reliance on the content of this document.
The BCT also notes that the business and financial structure for each landholder or entity managing a biodiversity stewardship site or conservation area is likely to be unique. Therefore, the way taxation law applies will depend on individual circumstances.
The BCT encourages landholders to obtain independent advice on taxation that considers their specific circumstances before (and ongoing after) entering a private land conservation agreement.