Draft Biodiversity Offset Scheme Changes for Credit Holders
The NSW Government has released a draft set of changes to the Biodiversity Offset Scheme. Here is a simple breakdown of the draft BOS regulation 2026 for credit holders.
The key changes for credit holders to be aware of relate to fund that holds management payments and about the demand for your credits.
A deposit-deferral change eases the cash position on certain transfers. And buyer-side changes point more demand toward the market.
How your management payments are funded
The largest change for credit owners is how the Biodiversity Stewardship Payments Fund is managed.
At present, investment earnings and losses are attributed to each individual stewardship site account in proportion to what that site paid in. The draft would let the Biodiversity Conservation Trust manage the fund as a single pool, putting all total fund deposits and their investment proceeds into one common account, and paying every BSA holder's annual management payment from that common account.
The rationale is that pooling spreads that risk across all sites, strengthening the fund's ability to keep paying every holder over the long life of these in-perpetuity agreements.
There is of course a trade-off. Under the current model, payments are tied directly to your own deposits and its performance. Under pooling, they are drawn from a shared account, so you are no longer relying on your own account alone, but you are also no longer ring-fenced from the position of other sites.
The draft includes an opt-out so existing BSA holders would be able to elect to keep their site on the current individual-account basis, described in the consultation paper as opting out of pooling for up to five years.
The exact opt-out period and the date the arrangement ends are marked in the draft as still subject to consultation, so treat the length as provisional.
The Department and the Trust have said they will consult with existing holders before the new arrangements start.
BSA Termination
If a BSA is terminated, including where the site is reserved as national park, the draft allows the Minister to direct a payment from the fund to help manage that reserve.
If the fund were ever wound up, the proceeds of the common account would, after the Fund Manager's liabilities, be distributed among the owners of common-account sites in the way the Minister directs.
The Trust will continue to report publicly on the fund's financial position.
Deferring the total fund deposit on transfer
When credits are transferred, the total fund deposit (or portion of it) is normally paid.
The draft broadens the Department's discretion to defer that payment to the next transfer of the credit, where it would be unreasonable to require it then, deferral would not harm the biodiversity values protected under the agreement, and the recipient of the transfer agrees.
The draft names two situations:
where the transfer is to the beneficiary of a deceased estate as part of distributing the estate, and
where the transfer is part of a single sale, to the same buyer, of both the remaining credits created under a BSA and the land they were created for.
More of the market comes to sellers
Two changes aimed at buyers work in a credit owner's favour on the sell side.
The first limits the Biodiversity Conservation Fund for buyers.
A proponent with an obligation of 100 or more credits of the same class will no longer be automatically able to meet it by paying into the Fund above the credit retirement threshold unless they first declare they have taken an approved measure to source the credits another way, such as lodging a demand expression of interest and joining a reverse auction, or listing on the credits-wanted register.
The second removes the fee to transfer credits.
At present a fee applies both to transfer and to retire credits; the draft removes the transfer fee and moves to a per-credit retirement fee instead.
Together, these push more buyers to look for credits on the market rather than paying into the Fund, and lower the friction on a sale.
For a credit owner, that points to more genuine buyers testing supply and lower costs for transfers.
Selling through an accredited broker
The draft establishes a mandatory accreditation scheme for conservation brokers. Accredited brokers will appear on a public register and must comply with a code of conduct.
Selling your own credits does not make you a broker, so this places no accreditation obligation on a credit owner selling their own holding.
Once the accreditation regime is in place, anyone you engage to sell, or to negotiate on your behalf, will need to be accredited. The public register makes it possible to check that a broker you are considering is accredited and in good standing.
Timeline
Have your say. The draft regulation and consultation paper are open for submissions until COB on 17 July 2026, by email to the department. Full details and documents are here.
