IPART report: A market improving at the edges, stuck at the centre
IPART’s has released its draft report on the NSW biodiversity credits market in 2025
Submissions on IPART’s draft report close Friday 5 June 2026.
IPART has released the draft of its third annual report monitoring the NSW biodiversity credits market, the last under its current three-year terms of reference.
The verdict is one of real but uneven progress: the market is broadening and the government has made genuine changes, yet the structural problems IPART named in 2022-23 are largely still there.
What the numbers show
As at 30 June 2025, around 948,000 Biodiversity Offsets Scheme credits had been generated since the Scheme began, of which roughly 218,000 had been retired and about 454,000 remained available in supply.
Trade itself plateaued: the total number of credits transacted (about 82,000) and the total value (around $170 million) barely moved on the prior year, even as the number of individual transactions climbed from 215 to 328 and both buyer and seller numbers grew. The average deal got smaller — 250 credits and $525,000, down from 383 credits and $792,000.
Trade is also spreading out. Credit types changing hands rose to 118 across ecosystem and species credits, the top ten credits fell to 55% of activity (from 92% two years earlier), and trading reached an all-time high of 35 IBRA sub-regions. That diversification is the clearest sign of a maturing market.
The headline shift sits with the Biodiversity Conservation Fund. For the first time the Trust purchased more credits than the new obligations it took on and its obligation balance fell. But around 60% of all obligations transferred to the Fund since 2018 (about 80,000 obligations, $337 million in payments) still have no credits purchased against them, and the proportion of acquittals met off a like-for-like basis jumped from 13% to over a third.
The findings
IPART’s ten draft findings track its long-running themes.
The Fund pay-in charge continues to act as a price ceiling, preventing prices from rising to clear demand and supply. The report focusses on the Glossy-Black Cockatoo, where uncleared demand and uncleared supply coexisted because bids sat above the pay-in charge.
Buyer concentration remains high and higher than seller concentration, driven by a handful of major infrastructure projects, and IPART expects this to be a permanent feature of a compliance-driven market.
Roughly 80% of proponents still meet obligations through the Fund and about 20% through the market, though market buyers move far larger volumes (around six times the Fund) at far lower unit prices (about $1,420 a credit versus roughly $5,000 through the Fund).
Beneath that sit persistent frictions:
a fragmented information landscape that participants must stitch together across many registers;
a transactions register that doesn’t flag bulk, related-entity or option trades, distorting price signals;
high transfer and retirement fees ($1,905 each); and
heavy upfront costs and capital gains exposure for landholders entering in-perpetuity stewardship agreements.
Confidence remains thin — particularly around governance, the multiple government roles flagged by ICAC in 2023, the opacity of the new Strategic Offset Delivery Agreements, and the absence of broker oversight.
The recommendations
IPART’s twelve draft recommendations cluster around price signals, transparency and accountability.
Most directly for market design, it again calls for a business case for a centralised trading platform to lift transparency and price discovery, and for the transactions register to identify off-market trade types.
It recommends amending the BOPC Order so the Trust can price the risk it cannot secure like-for-like credits into the Fund charge, publishing auction bid stacks and clearing prices to all participants, and simplifying the transfer process.
On conservation outcomes — a lens IPART has broadened this year — it recommends the Trust publish an annual list of “high offset risk entities” (obligations held beyond three years or previously offset off a like-for-like basis), that Accredited Assessors flag these in assessment reports so consent authorities can see the risk before approving development, and that the Department report annually on what was cleared, what was delivered as offset, and by which pathway.
Underpinning it all: a recommendation to separate the government’s operational, regulatory and policy roles, and to keep independent monitoring of the market going beyond IPART’s expiring mandate.
