Environment Law Reform Taskforce
Department of Climate Change, Energy, the Environment and Water

To the Taskforce,

Comment on the exposure draft of the
National Environmental Standard for Environmental Offsets

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

The Conservation Council (Council) is the leading environmental advocacy organisation in Canberra and hub for over 40 community groups. Our mission is to protect nature and safeguard ecosystems in the ACT and region. We also support broader initiatives to counter regional and global climate change. The Council is a non-profit, non-government organisation that runs campaigns, promotes and upskills local groups, undertakes research, advocates passionately, and engages and informs our community.

Thank you for the opportunity to comment on the exposure draft of the National Environmental Standard for Environmental Offsets (Offset Standard).

Introduction

FOG recognises that the Offset Standard and its accompanying Policy Paper represent a significant shift in Australia's approach to environmental offsetting, consistent with the Nature Positive Plan: better for the environment, better for business.[1] The longstanding emphasis on protecting relatively intact, high-conservation-value habitats under threat, i.e., averted-loss offsets, is being replaced by a model focused on rehabilitating and restoring degraded sites that are like, or have the potential to become like, the habitats of threatened species and ecological communities lost to development.

FOG supports this shift in principle. For FOG's support, however, the Offset Standard must be amended to achieve the following outcomes, explained in more detail under the first two sub-headings in the Issues section below:

Before we explain the issues, it is appropriate to note the context. The shift will have immediate benefits for approval holders while protected matters impacted at impact sites must suffice with a promise of future benefits. The shift will alter Australia's environmental offset market dramatically. Under the averted loss offset scenario, approval holders must identify, acquire, protect and manage relatively intact high conservation value places for the duration of the residual significant impact at an impact site. This costs. If a like for like high conservation value offset site cannot be found and acquired, that is a powerful market signal, i.e., it should be expected the price will go up for damaging intact habitats that are increasingly scarce. By contrast, sadly, places in need of repair are plentiful.

Issues

securing outcomes over time

Our first condition relates to time. To avoid compounding losses through time, offset sites under repair to compensate for permanent impacts must be formally (legally) protected and managed for the duration of the impact at the impact site, i.e., in perpetuity.

Starting with management, the notion that an offset site needs management for a short activity period only, sufficient to achieve a net gain state, inappropriately discounts the time dimension. The loss of grassy ecosystems at impact sites is typically permanent. A 'maintenance period' won't work to compensate for grassy ecosystem loss because, intact or otherwise, they need regular, ongoing management. Given threats from increasing biomass and invasive species, there is no such thing as a 'self-sustaining' grassy ecosystem.

Approved legal mechanisms are already available to legally secure the protection of offset sites from development for the long-term[2]; as such, the Australian Government has a ready-made list of mechanisms capable of securing offset sites under repair. If necessary, a separate list could be made for this specific purpose, i.e., protecting sites under repair.[3] The Offset Standard should insist on the formal protection of sites under repair via mechanisms on an approved mechanisms list listed on a schedule to regulations or rules made under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).

scope

Our second condition concerns the scope of the Offset Standard, which is inadequate as currently drafted. In November 2025, the EPBC Act was amended to require that all residual significant impacts on nationally protected matters be compensated to achieve a net gain[4]; given this, an approval will satisfy the net gain test only if compliance with its conditions results in a net gain for the affected protected matter.

FOG consider the objective, outcomes and principles of the Offset Standard should therefore apply to both 'offset activities' delivered by or for approval holders and to the outcomes of "more strategic offsets" delivered by the Restoration Contributions Holder following restoration contribution payments[5]. In other words, the Offset Standard should apply to all things done and all measures taken, including following the payment of restoration contribution charges, to 'adequately compensate' with measurable improvement for residual significant impacts on affected protected matters.[6]   

The Policy Paper makes the deficiency our point addresses clear, i.e., the Restoration Contributions Holder will not be required to act consistently with the Offset Standard when making decisions around the expenditure of funds.[7] As drafted, it will not be necessary for "more strategic offsets" to be 'like-for-like' on secure tenure in a 'relevant area' as close to the impact as possible. Given we expect many approval holders will elect to make restoration contribution payments (payments) rather than deliver offset activities themselves[8], FOG cannot support this standard as is; its scope is too narrow. As drafted, the Offset Standard will be unenforceable for most actions taken to restore habitats for the protected matters clearly at risk.

Conceding on the like-for-like and relevant area principles may ensure a capacity to expend payments, avoiding the problems experienced in more than one existing environmental offset scheme based on strategic landscape-scale environmental offsetting approaches (Attachment A).

However, for protected matters, every failure to demonstrate a measurable improvement for that affected matter risks a failure to deliver a net gain outcome. If like for like is to sacrificed, then wherever this occurs we recommend (and our draft changes suggested in track changes to the Offset Standard below) set a high bar when it comes to the likelihood of achieving an overall strategic net gain.

FOG's support is conditional on the Offset Standard being re-drafted so net gain claims are underpinned by a high standard of accountability. Anything less and the description of the new regime as a 'pay to destroy' scheme will be apt.

lack of overarching architecture

The extent of change between the 2025 and 2026 exposure drafts is evidence of ad hoc policy development. The 2026 draft is not a light edit; it is a substantial rewrite.

FOG consider this is so, in large part, because vital elements of the framework are missing. Policy makers are 'making it up on the run'. For example:

Recommendations

Below these recommendations we suggest changes to the exposure draft, in track changes, to achieve desirable outcomes, enhance clarity and promote consistency; however, the changes recommended are only a start because as drafted the Offset Standard relates to and is only intended to apply to 'offset activities' delivered by or for approval holders.

As noted in the Introduction, FOG's support depends on the Offset Standard capturing all actions and measures taken to 'adequately compensate' for residual significant impacts on protected matters, including the 'more strategic offsets' to be delivered by the Restoration Contributions Holder.

FOG recommend that:

1.       progress on this Offset Standard is paused until overarching architecture is settled. At minimum, if Regulations and/or a policy document and/or an offset calculator are to prescribe how the required net gain will be determined, then:

  1. this should happen
  2. this exposure draft should be re-drafted and presented again to enable more-informed consultation on an informed draft.

2.       the Offset Standard is re-drafted to broaden its scope, sufficient to provide enforceability over "more strategic offsets" to be delivered by the Restoration Contributions Holder. Consistent with track changes suggested on the exposure draft below (where changes recommended to text relate to 'offset activities' only), the re-drafted Offset Standard must apply an equivalent standard to expenditure by the Restoration Contributions Holder:

  1. Projects delivered by the Restoration Contributions Holder should be like-for-like and delivered on secure tenure in a relevant area as close to the impact site(s) as possible.
  2. If for any reason the like for like standard cannot be achieved, for expenditure on a strategic project to be approved by the Restoration Contributions Holder, the project must have (among other matters covered by other principles) a high (> 90 per cent) probability of achieving a measurable improvement for each protected matter damaged by a residual significant impact at an impact site.
  3. Each such impact is to be accounted for separately on a single (nation-wide) publicly-accessible register.

On the pages to follow, track changes suggested to the exposure draft should be taken as applying to 'offset activities' delivered by or for approval holders, only (that is how the Offset Standard is drafted). Summarising the track changes, the key amendments FOG recommend are as follows:

3.       Replace 'should' with 'must' (two instances). This will enhance compliance and promote consistent practice regardless of the jurisdiction carrying out the decision-making process.

4.       Enhanced accountability. Edits suggested impose appropriate obligations on decision-makers.

5.       Require a suitably qualified expert to be independent. This is to mitigate the current risk of industry employing their consultants and staff as 'experts'. Independent has been defined as per a recent EPBC Act approval.[12] In addition, expertise is defined as relevant to the protected matter and the principle.

6.       Definitions are added for these terms:

  1. approved mechanisms list;
  2. compensation;
  3. independent.

7.       The objective is altered to remove reference to the provision of a framework. The Offset Standard provides a standard.

8.       The objective should invoke the newly-defined term, compensation. This is because, as drafted, the objective refers to 'adequate' compensation; however, that is the only mention in the Offset Standard of the word 'adequate', which is confusing.

9.       The outcomes to be achieved by this Offset Standard should be clarified.

10.   Sub-sections 7(2) and 7(4) should be removed as they weaken the protection of protected matters. These sub-sections provide that activities can satisfy the whole Standard if they meet only the principles in the Standard. This is not appropriate. Any assurance derived from the Offset Standard is undermined by these two sub-sections.

11.   Evidentiary requirements should be strengthened:

  1. The requirement for the decision-maker to have a 'high level of certainty' in decision-making is introduced into all principles. As drafted, the objective calls for "a high level of certainty that affected protected matters will be protected and enhanced" (sub-section 5(c)); however, throughout the principles, the standard as drafted requires a 'high level of confidence'. Principle 1 of the 2025 draft said a "high degree of certainty" should be demonstrated that an offset is feasible through: specific, high quality, externally validated evidence pathways; independent expert review and endorsement of comprehensive adaptive management plans. On this principle, there is no justification for retreating from this strong standard. A "high degree of certainty" demands good knowledge and leaves little if any room for error. "Certainty" is objective and evidence driven.
  2. The requirement that decision-makers to be satisfied "appropriate" evidence supports decisions is vague and needs strengthening. In its place, the evidentiary standard suggested is the demonstration of 'scientifically valid' (principles 1-4 and 6) and 'legally valid' evidence (principle 2), verified by written judgement or opinion prepared by more than one independent suitably qualified expert.  

12.   In sentences stating compensation "for damage that will or may be caused by impacts to an affected protected matter as a result of an action or class of actions" (or similar), the underlined words are removed. Decisions to require offsets have already been made based on an assessment that an impact will or is likely to occur.

Should any clarification or additional information be needed, please email advocacy@fog.org.au.

Yours sincerely

SIGNED

SIGNED

Jamie Pittock

President, Friends of Grasslands

9 June 2026

Dr Simon Copland
Chief Executive, Conservation Council ACT Region

9 June 2026

Attachment A: Problems with existing environmental offset programs delivering 'strategic offsets'

Pilbara Environmental Offsets Fund (PEOF)

The Pilbara Environmental Offsets Fund (PEOF) combines money from individual offset payments required under both Part IV of the Environmental Protection Act 1986 (WA) (EP Act) and contributions required under Part 9 or 10 of the EPBC Act.[13]

The "cost of delivering offsets in the Pilbara is significant"[14]; however, the problem is not a lack of money, it is finding land that can be dedicated to conservation. The aim of the PEOF is to expend funds on strategic projects; yet, "by the end of FY24, proponents [had] paid over $15 million into PEOF, with total expenditure from PEOF expected to be $3.9 million."[15] The "main challenge" has been security of tenure, i.e., "no land has been expressly set aside for offset activity."[16] The PEOF has been unable to expend money when, to compensate for permanent impacts, the PEOF program rules require a mere 20 years of secure tenure before an offset activity will be approved.[17]

NSW Biodiversity Conservation Fund (Fund)

As noted in footnote 8, funds paid by developers to acquit offset obligations have accumulated in the Biodiversity Conservation Fund (Fund) because developers overwhelmingly chose to pay into the Fund instead of buying like-for-like credits. This led to a rapid build-up of unmet obligations, with the Biodiversity Conservation Trust receiving payments faster than it could source matching credits in a range of biodiversity types that are scarce and therefore difficult to offset.

In 2023, an Independent Review of the Biodiversity Conservation Act 2016 recommended a 'review of the like-for-like credit rules to identify if they can be simplified to support effective operation of the market without compromising biodiversity outcomes.'[18] The report noted:

There may be exceptional circumstances where discretion is needed to move away from core principles [such as the 'like for like' principle]. In these instances, there must be full transparency and public accountability for decisions. The outcomes of the scheme overall must be more transparent, with tracking and public reporting on the delivery of offset obligations.[19]

What followed was not subtle. Far from requiring transparency, the NSW Legislature imposed a time limit on the period the Biodiversity Conservation Trust (BCT) could hold new offset payments paid by developers into the Fund. This will force the BCT to apply variation provisions that side-step like-for-like requirements.

The latest NSW biodiversity market monitoring report explains the changes "are likely to lead to a further increase in the number of obligations being secured that are not on a like for like basis."[20]

FOG comment on the exposure draft of the National Environmental Standard for Environmental Offsets (track changes)

References

[1] Department of Climate Change, Energy, the Environment and Water (DCCEEW) (2022) Nature Positive Plan: better for the environment, better for business, href="http://www.dcceew.gov.au/environment/epbc/publications/nature-positive-plan">www.dcceew.gov.au/environment/epbc/publications/nature-positive-plan, pp. 3, 21-22

[2] Department of Climate Change, Energy, the Environment and Water (online) Conservation covenanting programs approved by the Environment Minister, www.dcceew.gov.au/environment/biodiversity/conservation/covenants/approved-programs

[3] This would be consistent with recommendations 5-6 in: Australian Conservation Foundation (2024) Set and forget: How offsets under national environmental law drive habitat destruction, https://canopy.acf.org.au/m/43fc6d973765eb79/original/Offsets_report_single_pages.pdf, p. 29

[4] Parliament of the Commonwealth of Australia (2025) Environment Protection Reform Bill 2025: Revised Explanatory Memorandum (Revised EM), https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fems%2Fr7398_ems_cdcd24f7-f04d-43b0-a7de-f532a25d565f%22, p. 3, see also p. 195

[5]] Revised EM n 4, p. 3

[6] This sentence paraphrases the Offset Standard's objective (s 5) and definition of 'offset activity' (s 4).

[7] DCCEEW (2026) Policy Position Paper: National Environmental Standard for Environmental Offsets (Draft for discussion), p. 33

[8] This is what has happened in NSW, and in the Pilbara (Attachment A). In NSW, Funds paid by developers to acquit offset obligations accumulated in the Biodiversity Conservation Fund because developers overwhelmingly chose to pay into the Fund instead of buying like-for-like credits. This led to a rapid build-up of unmet obligations, with the Biodiversity Conservation Trust receiving payments faster than it could source matching credits in a range of biodiversity types that are scarce and therefore difficult to offset.

[9] DCCEEW n 7, p. 34

[10] DCCEEW (October 2025) Nature Repair Market Enhancing Native Vegetation method - proposed design, https://consult.dcceew.gov.au/env-methods-nature-repair-market, p. 49, underline added.

[11] See, in order: our submission on an earlier Protect and Conserve Method Discussion Paper, here: www.fog.org.au/Submissions/20251215.htm, recommendation 3; and footnote 2 in this submission.

[12] DCCEEW (15 May 2026) Notification of approval decision Residential Development, Lot 4 RP45728, New Beith, Queensland (EPBC 2019/8398), https://epbcpublicportal.environment.gov.au/_entity/sharepointdocumentlocation/88e1301a-a0fb-ee11-9f89-00224892a860/2ab10dab-d681-4911-b881-cc99413f07b6?file=2019-8398-Approval-Decision.pdf, p. 23

[13] Western Australia (online) Program: Pilbara Environmental Offsets Fund , www.wa.gov.au/service/environment/business-and-community-assistance/program-pilbara-environmental-offsets-fund

[14] Impact Seed (2024) Evaluation of the Pilbara Environmental Offsets Fund 2024, www.wa.gov.au/system/files/2024-10/final-evaluation-of-the-peof.pdf, p. 23

[15] Impact Seed n 14, p. 6

[16] Impact Seed n 14, p. 18

[17] Impact Seed n 14, p. 2

[18] Henry, K., Keniry, J., Leishman, M., Mrdak, M (August 2023) Independent Review of the Biodiversity Conservation Act 2016 – Final Report, Report to State of NSW and the Department of Planning and Environment. www.parliament.nsw.gov.au/tp/files/186428/Independent%20Review%20of%20the%20Biodiversity%20Conservation%20Act%202016-Final.pdf, recommendation 32, p. 53

[19] Henry et.al. n 18, p. 23

[20] Independent Pricing and Regulatory Tribunal (May 2026) Draft Annual Report 2024-25 - Monitoring the NSW Biodiversity Credits Market - 4 May 2026, www.ipart.nsw.gov.au/sites/default/files/cm9_documents/Draft-Annual-Report-2024-25-Monitoring-the-NSW-Biodiversity-Credits-Market-4-May-2026.PDF, p. 9