NSW implements 'net positive' Biodiversity Conservation Act reforms
What you need to know
- Reforms to NSW's biodiversity offsets scheme contained in the Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Act 2024 now recognise the "avoid, minimise and offset hierarchy" as the key principle for managing impacts on biodiversity values when carrying out biodiversity assessment. The ultimate aim is to deliver "net positive biodiversity outcomes".
- Multiple aspects of the reforms have not yet been fully implemented. The NSW Government is still developing amendments to the Biodiversity Conservation Regulation 2017 to implement some of these reforms and deliver other commitments in the 2024 NSW Plan for Nature.
- Ultimately, these reforms are likely to result in more onerous biodiversity assessment and offsetting requirements for proposed State significant projects and modifications to approved State significant projects.
What you need to do
- Proponents operating in NSW should consider the impact of the reforms on their existing and future projects, particularly the likely increased costs and timelines associated with the more onerous requirements for biodiversity development assessment reports.
- Continue to monitor the evolving NSW biodiversity conservation regime, including in relation to proposed transitional arrangements for pending applications under the EP&A Act and any further changes required in light of the recent Federal EPBC Act reforms.
Context of the reforms
The Biodiversity Conservation Act 2016 (NSW) (BC Act) is the primary biodiversity conservation legislation in NSW. The BC Act provides for the NSW Biodiversity Offsets Scheme (BOS) and regulates the biodiversity assessment and approval process for development proposals under the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act).
In relation to State significant development and State significant infrastructure proposals under the EP&A Act, the BC Act requires the preparation of a certified biodiversity development assessment report (BDAR) - which specifies in accordance with the NSW Biodiversity Assessment Method the biodiversity credits required to be retired to offset the residual biodiversity impacts of the proposal - and regulates how biodiversity impacts are assessed and offset under the BOS.
In November 2024, the NSW Parliament passed the Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Act 2024 (NSW) (BC Amendment Act) to implement various reforms relating to the BOS. Most of the reforms to the BC Act came into effect in March 2025.
The reforms are intended to give effect to the 2024 NSW Plan for Nature, which set out the NSW Government's response to a 2023 independent statutory review of the BC Act led by Dr Ken Henry AC. The NSW Government has indicated that the reforms are a major first step in delivering necessary reforms to the BOS and meeting its commitment to ensure the effectiveness of the BOS in protecting biodiversity.
Key reforms
The key reforms to the BC Act relating to the biodiversity assessment and approval of development proposals under the EP&A Act are set out below.
The BOS will be transitioned from aiming to deliver "no net loss of biodiversity" to aiming to deliver "net positive biodiversity outcomes". To this end, the reforms require the NSW Minister for the Environment to make a strategy (following a public consultation process) as soon as practicable for the transitioning of the biodiversity offsets scheme to deliver net positive biodiversity outcomes. This strategy is likely to result in changes to the NSW Biodiversity Assessment Method, which sets out the detailed technical biodiversity assessment requirements for the purposes of the BOS. As at the date of this publication, a draft strategy has not yet been released.
The BOS has been reformed to recognise the "avoid, minimise and offset hierarchy" as the key principle for avoiding, minimising and offsetting impacts on biodiversity values when carrying out biodiversity assessment and preparing reports under the BOS. BDARs prepared for development proposals will need to demonstrate how the avoidance, minimisation and offsetting of biodiversity impacts follow the prescribed approach below:
a. first taking all reasonable measures to avoid the impacts of the action on biodiversity values;
b. after taking the actions in (a), taking all reasonable measures to minimise the impacts that have not been avoided; and
c. after taking the actions in (b), taking biodiversity conservation measures under the BOS to offset or compensate for any residual impact on biodiversity values.
The requirements for BDARs are set to become more onerous because such reports will need to set out and assess "the genuine measures" the proponent has taken or proposes to take to avoid and minimise the impact of the proposed development on biodiversity values. Further, the BC Act will provide for regulations to establish "genuine measures" assessment standards and require BDARs to include information relating to them. As at the date of this publication, this component of the BC Amendment Act reforms has not yet come into effect.
There has also been a change to make certain decisions to approve a proposed State significant project conditional on the retirement of biodiversity credits of the number and class specified in the BDAR (unless the concurrence of the NSW Minister for the Environment is obtained for some alternative condition). The BC Act previously provided the relevant EP&A Act decision-maker for State significant development and State significant infrastructure proposals with discretion to decide whether the proponent should be required to retire biodiversity credits to offset the residual impact on biodiversity values of the number and class specified in the BDAR. The BC Act has been reformed so that the relevant decision-maker is obliged to impose a condition requiring retirement of such number and class of biodiversity credits as specified in the BDAR unless concurrence of the NSW Minister for the Environment is obtained for some alternative condition. In deciding whether to concur, the Minister must have regard to multiple prescribed matters and may concur subject to conditions. Similar changes have been made to decisions to approve proposed modification applications relating to existing State significant projects.
The BOS has historically provided that a legal requirement to retire biodiversity credits can, in some circumstances, be satisfied by paying an amount into the Biodiversity Conservation Fund in lieu of obtaining the biodiversity credits. The BOS has been reformed so that regulations can be made which prescribe circumstances in which this is not allowed. As at the date of this publication, the regulations have not been amended to prescribe such circumstances. The reforms have also introduced additional means by which a legal requirement to retire biodiversity credits may in some circumstances be alternatively satisfied (e.g. by undertaking prescribed biodiversity conservation measures).
In May 2025, the Biodiversity Conservation Regulation 2017 (NSW) was amended to prescribe entering a "strategic offset delivery agreement" as a new biodiversity conservation measure in relation to certain renewable energy related State significant development and State significant infrastructure proposals. This provides an alternative mechanism under the BOS to satisfy an offset obligation imposed by a planning approval granted for such proposals under the EP&A Act.
Key insights
There are several aspects of the reforms that proponents of State significant projects under the EP&A Act should be aware of:
- The potential implications of the transition of the BOS to aim to deliver "no net loss of biodiversity" are likely to become evident when the Minister releases the required BOS transition strategy for public consultation. This strategy is likely to shed light on proposed consequential changes to the Biodiversity Assessment Method, which may result in more onerous biodiversity assessment and offsetting requirements for proposed State significant projects and modifications to approved State significant projects.
- We expect that the BOS reforms to give effect to the "avoid, minimise and offset hierarchy" and the associated "genuine measures" BDAR reforms will result in heightened scrutiny of whether proposed State significant projects and modifications to approved State significant projects have sufficiently investigated and implemented all reasonable measures to avoid and minimise biodiversity impacts.
- The BC Act reforms to make certain EP&A Act decisions conditional on obtaining the concurrence of the NSW Minister for the Environment may make it more challenging to obtain approval of a biodiversity offset strategy involving the retirement of a reduced number of biodiversity credits than that calculated in accordance with the Biodiversity Assessment Method.
- Multiple aspects of the reforms have not yet been fully implemented. The NSW Government is still developing amendments to the Biodiversity Conservation Regulation 2017 (NSW) to implement some of the reforms and deliver other commitments in the 2024 NSW Plan for Nature.
- We expect that the recent significant reforms to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) regime will necessitate consequential reforms to aspects of the NSW biodiversity assessment and offsetting components of the existing BC Act regime.
- Proponents of State significant projects should keep a "watching brief" as the BC Act regime continues to evolve, including in relation to proposed transitional arrangements for pending applications under the EP&A Act.
- These reforms differ from recent South Australian reforms. For example, the Biodiversity Act 2025 (SA) introduces a new "general biodiversity duty", requiring operators in South Australia to implement reasonable and practicable measures to prevent or minimise harm to biodiversity from their activities. For more details about these reforms, see our article "South Australia's New Biodiversity Act: Key changes and next steps".
Other author: Diana Chen, Lawyer.
