Nature Repair Market Team
Department of Climate Change, Energy, the Environment and Water
naturerepairmarket@dcceew.gov.au

 

Dear Nature Repair Market Team

Re: Nature Repair Market: Ongoing development

Thank you for the opportunity to comment on the ongoing development of the Nature Repair Market (the Market).  Friends of Grasslands (FOG) and the Conservation Council ACT Region (Council) provide detailed comments by Issues Paper; they appear below our signature blocks.

Overall, we make the following recommendations in relation to the Market:

1. Embed weighting inside methods: to increase the value of biodiversity certificates for the repair and protection of biodiversity in small, fragmented critically endangered ecosystems
2. Adopt an accounting approach: that the Market Register be required to show what residual significant impact each Market project is compensating for
3. Promote convergence toward a common biodiversity metric: the Clean Energy Regulator (CER) should be required, preferably via the Rules, to administer a structured approval test to materially strengthen the consistency and comparability of biodiversity outcomes across the Market
4. Introduce requirements that prevent Market proponents from stating that a Market project compensates fully for permanent residual significant impacts
5. Introduce additional security requirements for projects committed for an offset purpose: to align with Principle 2 (Security) of the draft Offsets Standard
6. Require the CER to tightly control the processes that will be used for setting baselines
7. Require the ‘suitably qualified person’ to be independent
8. Make available on the Register the information and assessments provided by ‘suitably qualified people’: so the public can check detail against requirements
9. Require the CER to show individual species-level scores on the Register
10. Explore options and then include in the Rules a requirement for the CER to follow a structured administrative process when a significant reversal is suspected
11. Amend the criteria for testing certificate equivalence requirements to ensure useful ‘encumbrances or restrictions’are not excluded.

Should you need any clarification of our points, please contact us via advocacy@fog.org.au

Yours sincerely

SIGNED	SIGNED
Matt Whitting Vice President, Friends of Grasslands 4 May 2026	Dr Simon Copland Executive Director, Conservation Council ACT Region 4 May 2026

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About us

FOG is a community group dedicated to the conservation of natural temperate grassy ecosystems in south-eastern Australia. FOG advocates, educates and advises on matters to do with the conservation of native grassy ecosystems, and carries out surveys and other on-ground work. FOG is based in Canberra and its members include professional scientists, landowners, land managers and interested members of the public.

The Council is the peak environmental advocacy organisation and hub for community groups in Canberra. Our mission is to protect nature and create a safe climate future in the ACT and region.

Issues Paper 1 – Policy settings to enable the Market to supply environmental offsets

We appreciate the explanation of proposed Market settings and agree offset supply will support threatened biota. Where residual significant impacts are approved to occur and occur elsewhere, it is good that under the future s 134(1)(b) of the Environment Protection and Biodiversity Act 1999 (EPBC Act) the Minister can now attach to approvals conditions that require compensation for damage.

To demonstrate overall ‘net gain’, ‘measurable improvement’ on offset sites needs to be supported by robust ecological evidence and monitoring. It is good that an explicit pathway for demonstrating offset benefits is in development.

We understand the Department is considering whether additional requirements are needed for offsets-capable Market projects. We make the following recommendations:

Recommendation 1: Embed weighting inside methods

We are concerned the Market will only offer adequate returns for the managers of large land holdings. For the managers of small holdings, the transaction costs will remain high, limiting managers’ capacity to participate. Small, fragmented land portions is precisely the profile of many if not all critically endangered grassy ecosystems found in southeastern Australia. Acknowledging the Nature Repair Market Act 2023 (NR Act), Nature Repair Market Rules (Rules) and Biodiversity Assessment Instrument (BAI) do not provide for explicit price‑weighting, the most viable pathway is to embed weighting inside methods via indicator scoring, benchmark setting, and species/ecosystem prioritisation, all of which are expressly permitted.

Recommendation 2: Adopt an accounting approach

We recommend the Market Register be required to show what residual significant impact each Market project is compensating for, following development approval decisions made under the EPBC Act by the Minister, delegates, or accredited decision makers. This will be a transparent and accountable approach to demonstrating net gain. The alternative, i.e., not doing this, will make the demonstration of net gains difficult. Gains certified through the Threatened Species Characteristic will be able to be directly matched to the quantified losses they are offsetting.

Recommendation 3: Promote convergence toward a common biodiversity metric

We agree indicators and thresholds should remain tailored to species and site conditions. Adopting that approach, it is correspondingly necessary to require that the Clean Energy Regulator administer a structured approval test to materially strengthen the consistency and comparability of biodiversity outcomes across the Market. Such a test is needed to ensure indicators and thresholds are assessed against the same evidentiary standards, and is preferably written into the Rules (but if not, implemented administratively within the CER’s existing verification role).

This would oblige proponents to demonstrate ecological relevance, provide transparent justification of starting, forecast and threshold values, and provide a defensible counterfactual, ensuring indicators are anchored to ecological logic rather than subjective judgement.

In parallel, the approval process would confirm that each indicator and threshold integrates cleanly into Threatened Species Characteristic scoring, maintaining internal coherence and supporting comparability of species‑level and project‑level scores published on the Register.

The approach would preserve ecological flexibility while establishing a common quality benchmark across projects, reducing variability risks and strengthening confidence in the integrity of market outcomes. It would directly address a key issue in the Market, i.e., biodiversity outcomes do not currently converge on a common metric.

Recommendation 4: Introduce requirements that prevent Market proponents from stating that a Market project compensates fully for permanent residual significant impacts

Recommendation 5: Introduce additional security requirements for projects committed for an offset purpose, to align with Principle 2 (Security) of the draft Offsets Standard

The Market architecture alone cannot require biodiversity outcomes that will endure once a Market project's permanence period ends. Section 32A of the Nature Repair Market Act is very clear on this. The Revised Explanatory Memorandum explains:

208. Clause 32A would have the effect that a project’s registration would be automatically cancelled at the end of the permanence period for the project. This is consistent with the fact that the permanence period is intended to cover the life of the project and there would be no obligations for project proponents (or any other person) in respect of the project after the end of the permanence period. ...[1]

The Draft Policy Position: National Environmental Standard for Environmental Offsets indicates offset decision-makers must form “a reasonable expectation that the projected gain will be delivered and maintained for the duration of the impact.”^[2] Given:

• at present, the Enhancing Native Vegetation (ENV) appears to be the only method the Department is developing to be offsets-capable[3],
• most if not all offset requirements arise because EPBC Act decision-makers determine (albeit implicitly) that residual significant impacts at impact sites will be permanent,
• the design concept paper for the ENV method notes that, for some ENV projects, it is expected there will be “limited observable change in ecosystem condition and the main project benefit would be conveyed through commitment to protection”[4],
• the “detailed design of the commitment to protection characteristic – including indicators and the scoring system – is being developed in the context of the proposed Protect and Conserve method”[5],

it is both surprising and disappointing that the Policy settings to enable the Nature Repair Market to supply environmental offsets Issues Paper make no reference to the Department’s progress toward requiring outcomes that will be initiated through the Market and required beyond any Market project’s permanence period due to some extraneous requirement. We hope this work is continuing through the development of the Protect and Conserve Method. We therefore recommend introducing additional security requirements for projects committed for an offset purpose. We also recommend that Market proponents are not allowed can state that a Market project compensates fully for permanent residual significant impacts – this is needed, however, the Market architecture does not enable such claims to be made for the duration of a permanent impact.

In May 2024, the Australian Conservation Foundation recommended measures to protect and maintain offset sites after the expiry of EPBC Act approvals. Recommendations five and six of their report directly address ‘commitment to protection’ issues (Attachment 1); we support the Australian Conservation Foundation’s recommendations. As above, given the Market’s architecture, it is not the role of the Market to ensure net gains endure; it is the role of decision-makers granting approvals that have effect for EPBC Act purposes.

To be sure, we will be looking for evidence the ‘net gain test’ to be prescribed in regulations made to address ss 527K(2)(b)(i) of the future EPBC Act will deliver on the principle that projected gain will be delivered and maintained for the duration of the impact.  

In relation to ‘Developing offset-capable methods for the Market’, we agree with the proposition that a “Nature Repair Market project may either be used as an EPBC Act offset or be stacked with an ACCU Scheme project if the method permits it, but not both.”

Issues Paper 2 – Supporting threatened species and threatened ecological communities in Nature Repair Market projects

We support the focus on developing methods systematically. It will give effect to the standardised assessment framework in the BAI for identifying, describing, measuring, assessing, recording and reporting relevant matters across methods and projects.

We note project proponents may be required under some methods to identify indicators relevant to their project under two proposed indicator themes, habitat condition and threat management. However, we understand the design of the proposed of the ENV Method does not include a requirement for proponents to assess change for the variable biodiversity project characteristic “removal or reduction of the impact of threats.”[6] Assuming this is true, we strongly support the flexibility to limit the variable biodiversity project characteristics that should be applicable, by method. In the ENV case, allowing project proponents to identify indicators and indicator outcomes for this threats variable has a high risk of exposure to exaggerated, unsubstantiated claims that will erode the integrity of the method and the Market.

Recommendation 6 - Require the CER to tightly control the processes that will be used for setting baselines

We recommend the CER be required to tightly control the processes that will be used for setting baselines. This is very important. Seasonal variability is one issue, i.e., project proponents may ‘game the system’ by waiting for a drought before setting their baseline. Unless a high degree of sophistication is evident at this initial step, the measurement of gains will be compromised permanently. Assessment metrics need to account for latent threats such as the soil seed bank, which could easily be missed by a ‘suitably qualified person’ due to no more than the timing of an inspection. We look forward to seeing the detail in the ENV and other methods.

Recommendation 7 – Require the ‘suitably qualified person’ to be independent

Recommendation 8 - Make available on the Register the information and assessments provided by ‘suitably qualified people’

We note the ‘suitably qualified person’ will play an important role in the Market. We recommend they be independent.

We recommend making available on the Register the information and assessments provided by ‘suitably qualified people’ so the public can check detail against requirements. The standard of information required and accepted is a key to the presence or absence of Market integrity.

Recommendation 9 – Require the CER to show individual species-level scores on the Register

On scoring, we support and recommend the plan to show individual species-level scores on the Register.

Site condition should be scored for the purpose of supporting the species, and species presence/usage, only. It is not appropriate to include site condition scores in any assessment of management activity or threat abatement outcomes. To do so would confuse activity with outcomes. Further, site condition should be recorded/scored only for the purpose of the species, not the ecosystem, e.g., a bird that forages in the tree tops is not affected by leaf litter at ground level.

Issues Paper 3 – Rules to support Market integrity and administration

Recommendation 10 – Explore options and then include in the Rules a requirement for the CER to follow a structured administrative process when a significant reversal is suspected

We support providing in the Rules “for the CER to identify whether a reversal is significant or not by considering the impact of the reversal on the indicators for applicable variable Biodiversity Project Characteristics.” It is however then proposed that, for the purpose of deciding whether to issue a relinquishment notice, “the Rules would prescribe the following circumstances could be considered as a significant reversal” in a given set of circumstances (p. 3).

In our view this is vague. We note you explain issuing relinquishment notices is a ‘step of last resort’ meaning there may be information at hand for making these decisions; however, having regard to the range of examples of issues listed on p. 2, the Rules need more structure to reduce subjective weighting.

Where a significant reversal is suspected, options might include requiring the:

• CER to apply a published decision matrix
• CER to publish reasons referencing the factors listed explicitly
• proponent to complete a standardised restoration feasibility assessment
• CER to assess feasibility against method defined ecological trajectories (not discretionary expectations).

Recommendation 11 – Amend criteria for testing certificate equivalence requirements to ensure useful ‘encumbrances or restrictions’ are not excluded

Defining certificate equivalency for relinquishment of biodiversity certificates

We support the approach but not the underlined criterion for testing equivalency:

Any certificate/s that a Market project proponent provides to the CER to meet the relinquishment equivalence requirements must be:

·         valid

·         free from any encumbrances or restrictions.

Some encumbrances and restrictions are positive for nature. To suggest that a project proponent cannot relinquish a biodiversity certificate with, e.g., an in perpetuity conservation covenant registered over it, may be at odds with good outcomes for nature. Most conservation covenant programs already provide for the removal of covenants if the values they exist to protect no longer exist. We recommend this criterion is checked and as necessary revised to ensure useful encumbrances or restrictions are not excluded.