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What is the Biodiversity Credit Exchange?

The Biodiversity Credit Exchange enables South Australian landholders to produce biodiversity credits by committing to protect, manage and restore native vegetation in designated areas on their land. Eligible landholders receive payments to establish and maintain these areas as part of an agreed management plan. The credits generated on their land are deposited into the Biodiversity Credit Exchange (a credit register that will be available here on the department’s website) and sold at cost to buyers that are required to offset vegetation clearances in the same region. The Biodiversity Credit Exchange supports sustainable development in our growing regional economies while providing long-term protection for our state’s ecosystems.

How does the exchange work?

The Biodiversity Credit Exchange facilitates the creation and purchasing of biodiversity credits in the following way:

How is the program funded and delivered?

The program is funded and administered by the Native Vegetation Council, an independent body established by the Native Vegetation Act 1991, and is being delivered by the Department for Environment and Water’s Native Vegetation Branch.

Is there a cost for landholders to take part in the program?

There is no cost to take part in the program (including the on-ground assessment of your site) and you can withdraw from the process without obligation up until the signing of the management agreement.

Who can apply?

Applications for the Biodiversity Credit Exchange can only be accepted from land owners. This includes the lessee of a pastoral lease.

Do I need to be located within a particular region to be eligible?

The program will initially be established in selected regions where demand for biodiversity credits is predicted to be highest. The first round will focus on areas within the SA Arid Lands and Northern and Yorke regions (view map). If your property is outside of the target area, you can seek to establish a significant environmental benefit (SEB) site, or register your interest in participating in future stages of the program by contacting the Native Vegetation Branch on (08) 8463 4821.

What conditions does my site need to meet to be eligible?

To be eligible for the program your site must:

  • be located on land that is owned by you or that you are leasing if you are in the pastoral region
  • contain moderate levels of remnant native vegetation (e.g. intact upper storey but degraded understorey)
  • contain vegetation types that match the vegetation types in clearance areas (this will be cross-checked with the Native Vegetation Branch clearance database)
  • be free from conservation covenants and other management agreements
  • not have received prior funding for management
  • not have proposed or future conditions of use that would prohibit it from being used as a biodiversity site (e.g. easement, land use intensification).

What is the application process?

There are four simple steps:

  • Step 1 – Expression of interest. Complete the ‘Expression of Interest’ form. If you meet the eligibility criteria, an appointment will be made with you for a site visit at your property with a field officer.
  • Step 2 – Site assessment. The field officer will visit your property at an agreed time to assess your potential credit site. The officer will determine the amount of credit that can be generated by your site and will discuss management options with you. 
  • Step 3 – Submission of bid. If your site is assessed as being suitable for the program, you will be invited to submit a bid. The bid will outline the price you are seeking to establish and maintain the credit site. It should cover costs associated with managing the site, any loss of production or land value, and any desired income. Bids will be assessed by the Native Vegetation Council. The bid is non binding at this point in the process.
  • Step 4 – Management agreement and payment. If your bid is successful you will be invited to enter into a management agreement. The agreement will include a ten year management plan prepared by the Native Vegetation Branch. The plan will outline the management actions you will need to implement to ensure that your site achieves the anticipated improvement in biodiversity. Once the agreement is in place you will begin to receive payments (see ‘How much will I be paid?’ for more information). The credits that your site will generate will transfer to the Biodiversity Credit Exchange registry at this point. Your credits will eventually be sold at cost to eligible clearance applicants that need to offset their activities.

What are biodiversity credits and how are they calculated?

Biodiversity credits represent the expected improvement in biodiversity that will result from the protection and management of a site. The credits are calculated by comparing:

  1. an on-ground quantitative assessment of the vegetation to establish its current condition
  2. the likely improvement in condition of the vegetation over a ten year timeframe if the site is managed and protected.

It is this improvement that qualifies as credits.

Who needs biodiversity credits?

Industry and landholders that are clearing vegetation are required (in most cases) to produce a significant environmental benefit (SEB) to offset the impacts on biodiversity. There are several ways a clearance applicant can achieve a SEB requirement under legislation. They can:

  1. establish a new SEB area on land they own or on land under their care and control
  2. apply to use SEB credit that they have previously established
  3. apply to have SEB credit (referred to as ‘biodiversity credit’ for the Biodiversity Credit Exchange) assigned from another person or body
  4. engage an Accredited Third Party Provider to find and deliver an SEB on their behalf
  5. pay into the Native Vegetation Fund if the achievement of an on-ground SEB is not possible.

The Biodiversity Credit Exchange will support option 3, having credit transferred from another person or body, by providing an efficient and straightforward means for doing this.

How do individuals and groups that need to offset clearance activities purchase biodiversity credits?

A request to purchase biodiversity credits is submitted to the Native Vegetation Council as part of a native vegetation clearance application. Approved applicants then make a payment into the Native Vegetation Fund and the credits are removed from the Biodiversity Credit Exchange.

How many credits will my site generate?

The number of credits your site will generate is dependent on its current condition and the expected improvement in biodiversity that would result from its management and protection (sites that are in moderate condition are ideal, i.e. intact upper storey but degraded under storey). This will be determined by an on-ground assessment conducted by field staff (a member of the Native Vegetation Branch or a consultant engaged by the branch). The results of the assessment will be discussed with you and you will be provided with a report of the outcomes.

Is there a minimum and maximum size for a site to be eligible?

There is no set minimum or maximum site size as this is influenced by the type of land holding and other factors such as the overall property size and current land use. This will be discussed with you at your site assessment.

Can sites that are already protected be considered?

Sites that have existing management obligations or that have previously received funding for management will not be considered. This includes areas that are already subject to a Heritage Agreement and existing significant environmental benefit (SEB) sites. 

Does the program include revegetation?

Revegetation sites are not part of the Biodiversity Credit Exchange program.  The program deals with the protection and improvement of remnant native vegetation.  Supplementary planting of native species into remnant native vegetation is supported, particularly where understorey has been lost due to past disturbance. Buffering or infill planting may also be acceptable if it extends or connects existing areas of remnant vegetation.

How long will my site need to be set aside for conservation purposes?

A credit site is generally established in perpetuity and is subject to:

  1. a ten year management plan which stipulates the management actions that need to be undertaken
  2. a management agreement which provides ongoing protection of the site to prevent future impacts.

The exception is for pastoral leases under the Pastoral Land Management and Conservation Act 1989 where the management agreement will likely be for a fixed term. In this case the lessee can request to have the agreement terminated at the conclusion of the fixed term.

Are management agreements legally binding?

Management agreements are registered on title to the land and are binding on all current and future owners of the land.

What management actions will I need to undertake?

The field officer that conducts your site assessment will assess the quality of your native vegetation and the actions required to achieve an improvement in biodiversity. They will discuss management options with you and this discussion will form the basis of the ten year management plan that will be developed for your site if your application is successful.

Common activities include:

  • fencing to control grazing by stock and/or pest animals
  • excluding stock or adapting grazing practices to maximise vegetation quality 
  • weed and pest animal control above current responsibilities
  • retaining trees, understorey, logs, fallen branches and leaf litter
  • supplementary planting into existing patches of native vegetation.

The final management actions listed in the management agreement can be varied with the written consent of both parties (i.e. the landholder and the Native Vegetation Council). In general, only actions that lead to an equal or improved outcome will be considered.

How will my site be monitored?

You will be required to undertake monitoring in line with the management plan developed for your site. The costs of the monitoring should be incorporated in the overall price you submit as part of your bid (see ‘How much will I be paid?’ for more information). Monitoring is not anticipated to be labour intensive and may be something as simple as annual photo point monitoring and reporting on activities undertaken to the Native Vegetation Branch.

What happens at the end of the ten year management plan?

If the anticipated improvement in biodiversity has been achieved at the end of the ten year period, the management plan expires. You will still be expected to maintain the site in line with the management agreement, however there will be no specific monitoring or management requirements.

If the anticipated improvement in biodiversity has not been achieved at the end of the ten year period due to climatic conditions, the management plan and associated timeframe will be revised. The Native Vegetation Council will discuss funding options with you if this eventuates.  

If the anticipated improvement in biodiversity has not been achieved due to a failure to carry out agreed management actions, the Native Vegetation Council will contact you to discuss compliance options. Continued non-compliance with the management plan may result in you losing your bid payments.

What happens if unforeseen events occur?

Events such as fire, flood, drought or new weeds or pest appearing may require you to undertake additional management actions at your own cost, such as replanting vegetation or reconstructing fences. You are encouraged to purchase insurance as a contingency for such unforeseen events and to include the cost of this in your bid (see ‘How much will I be paid?’ for more information).

What happens if the vegetation doesn’t recover to the extent expected?

Compliance with the agreement will be based on your completion of agreed management actions, not on the outcomes of the vegetation recovery. This is in recognition that circumstances outside of your control (such as below average rainfall) may prevent the vegetation from recovering to the extent expected. There will be repeat assessments of the vegetation after year five and ten to quantify the changes in vegetation condition.

If your application is successful, you will be paid the amount that you specified in your bid. Your bid is the payment amount that you require to enter into a management agreement to establish and maintain the credit site.. It should incorporate all costs associated with the agreed management actions for your site (discussed at your site assessment and provided as part of your bid pack), as well as any costs for loss of production and any income you are seeking. You will receive an initial upfront payment upon signing the management agreement for your site, followed by payments at certain time intervals upon the satisfactory completion of the agreed actions and/or delivery of outcomes. The schedule and amount will be negotiated with you. Payments will be by cheque or Electronic Funds Transfer.

Who assesses landholder bids?

The Native Vegetation Council based on:

1. the dimensions of the site and its connectivity in the landscape

2. the potential for the site to achieve a significant improvement in biodiversity

3. value for money.

What happens to the credits once they are purchased by a clearance applicant?

Once a clearance applicant has purchased the credits they are extinguished and removed from the Biodiversity Credit Exchange register.

Can I access funds from other sources to cover management costs for the site?

There should be no requirement to seek additional funding as all anticipated costs  for managing the site should be included in your bid (see ‘How much will I be paid?’ for more information). There will be no further funding from the Native Vegetation Council beyond the agreed price.

Can I get rate relief for my site?

Credit sites do not provide rate relief.

What if I change my mind?

You can withdraw from the process without obligation up until the signing of the management agreement. If you wish to withdraw from the agreement after signing you will need to contact the Native Vegetation Council to discuss your options.

Who can I contact for more information?

If your question hasn't been answered here, please contact the Native Vegetation Branch on (08) 8463 4821 or email nvc@sa.gov.au.

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