The Australian Government has launched a new biodiversity trading platform, and is consulting on a potential national legislative scheme to support investment in biodiversity stewardship.
These are the latest in a suite of initiatives which seek to encourage farmers and other landholders to undertake biodiversity stewardship projects, in another indication of the increasing importance of biodiversity conservation.
We have provided a snapshot of the key initiatives and how interact with other carbon offset and biodiversity programs.
Australia's new biodiversity stewardship trading platform
The National Stewardship Trading Platform (NSTP) was established as a "marketplace" to help make connections between landholders who are carrying out (or proposing to carry out) biodiversity stewardship projects with potential investors in those projects and potential buyers of environmental products (such as biodiversity credits) which those projects may create.
The NSTP has two key components:
The environmental products themselves are not available on the NSTP, and any transactions which interested stakeholders may then pursue would be done outside of the NSTP.
Some potential benefits of the NSTP include:
- a single, national entry point for key information relating to environmental products and potential stakeholders in those products;
- reduced need for brokerage fees, marketing costs and search fees to match landholders with prospective buyers and investors;
- simpler and lower-cost access to data and other information and services which landholders need in order to plan environmental projects; and
- better access to information about available and potential environmental products which could help address issues in some existing environmental product registers.
The NSTP is currently in its initial phase, with more functions to be added to the platform over time. There is potential for the NSTP in future to provide farmers with tools which would help them measure and report project outcomes, and to provide for onsite trading in environmental products.
Round 2 of the Carbon + Biodiversity pilot
The Australian Government has also launched Round 2 of its Carbon + Biodiversity (C+B) pilot scheme, which offers landholders the opportunity to receive payment for added biodiversity initiatives as part of a carbon abatement project.
Under the scheme, a landholder who establishes a reforestation project under the Carbon Credits (Carbon Farming Initiative) Act 1991 to earn Australian carbon credit units (ACCUs), and also plants local native vegetation for that project in accordance with a "C+B planting protocol" (developed by the Australian National University and the Natural Resource Management organisation in each trial region) can obtain Government payments towards the cost of designing and establishing the project.
The scheme is intended to:
- incentivise landholders to consider establishing carbon farming projects, by providing an additional source of finance;
- reduce some of the cost barriers to establishing a carbon farming project (since the revenue-generating ACCUs from a project may not come online for a few years after the project has begun); and
- enhance biodiversity outcomes for those projects.
The scheme is available only in designated Natural Resource Management regions. Round 2 regions include Fitzroy Basin (Queensland), Riverina (New South Wales), Goulburn Broken (Victoria), Southern (Tasmania), Northern and Yorke (South Australia) and South Coast (Western Australia).
The scheme may also encourage opportunities for landholders to tap into separate revenue sources from the additional biodiversity outcomes they generate – such as through a biodiversity offsets scheme, although they may need to navigate the additionally requirements in that scheme before being able to produce valuable products (given that many of the project activities will be required in order to generate the project's ACCUs).
A national biodiversity trading scheme?
The Australian Government is also exploring opportunities to develop a legislative scheme to support some of its current biodiversity initiatives, and is now consulting on a potential national scheme.
Last month the Minister for Agriculture, the Hon David Littleproud, indicated one of the potential scheme features would be a consistent and credible way to describe and measure biodiversity outcomes. Other features which have been suggested include the creation of a new form of tradeable environmental product, and the establishment of assurance and compliance systems to promote the integrity of any related environmental market (an issue on which there is increasing focus, as stakeholders seek reliable support for their environmental objectives and claims).
Given the very early stages of consultation, there is limited detail available for the potential legislative scheme. We will be monitoring and reporting on the progress of any legislative scheme in 2022.