The Biodiversity Offsets Payment Calculator

Under the Biodiversity Offsets Payment Calculator Order 2022 we are required to publish the following rules to our website:

• Rules for Estimating Typical BSA Size
• Rules for Estimating Ecosystem Credit Yield
• Rules for Allocating Species to Categories
• Rules for Application of Market Soundings
• The transitional price cap has expired in accordance with Rule 5 – after 16 October 2023 no credits are subject to a price cap.

We use one or more of the following tools to calculate credit charges for biodiversity and species credits.

Cost-structure tools

We apply different cost models depending on the type of credit.

For ecosystem credits, we consider:

• Biodiversity Stewardship Agreement (BSA) management and entry costs, based on typical costs from existing sites
• land value, estimated using vegetation mapping and current sales data
• credit yield, based on typical yields from existing BSA sites.

For species credits, we consider:

• predicted survey, management and monitoring costs
• difficulty in finding suitable offset sites
• a weighting based on the area the species is likely to occupy on a BSA site.

Statistical model

This model is currently used only for:

• Cumberland Plains Woodland (Sydney Basin Bioregion)
• River-Flat Eucalypt Forest on Coastal Floodplains (NSW North Coast, Sydney Basin and South-East Corner Bioregions).

The model is currently not used for any other credit types. There are currently no offset trading groups with enough trades to support the use of a statistical (econometric) model.

We may add more offset trading groups (OTGs) as trade data becomes available.

Market soundings

We seek input from market participants when data is limited. This helps us estimate:

• typical credit yield for underrepresented OTGs
• OTG distribution where state-wide data has limitations
• forecast demand and supply over the next 3 years for a specific OTG or region.

We use market pricing when there is strong evidence of value, including:

• there is strong evidence of a market price and ongoing credit supply from relevant sites.
• a reverse auction process identifies a market price from multiple suppliers.
• we have entered an agreement or option to purchase relevant credits.

We can use these market soundings to help develop a credit charge.