IPART Review of NSW Biodiversity Credit Market released
The Independent Pricing and Regulatory Tribunal (IPART) has released a summary of workshops and stakeholders’ submissions concerning the functioning of the NSW Biodiversity Credits Market.
In late September of 2024, the IPART held a series of consultation workshops to hear stakeholders' views on the performance of the credits market.
The key findings of the IPART Review are that the biodiversity credits market is not operating effectively in 5 key areas:
- The option for development proponents to pay into the Biodiversity Conservation Fund prevents the market from developing.
- High up-front costs and long credit generation times create a lag between credit demand and supply. The Credits Supply Taskforce work program is making a difference.
- Market participants lack accurate and timely information.
- High transaction costs and market complexity discourage participation.
- Stakeholders lack confidence in market oversight and governance, which hinders their participation.
These are fundamental issues that, if unaddressed, will continue to prevent the market from functioning effectively. To address these issues, the IPART recommends the following priority actions:
- Phase out the option to pay into the Biodiversity Conservation Fund.
- Establish interim measures to reduce proponents’ reliance on the Fund pay-in option.
- Continue to intervene in the market to reduce entry costs, make trading more efficient and instil confidence in the market.
The Scheme, and these issues, are not going anywhere soon.
The IPART has published a summary of the stakeholder workshops on its website. The summary outlines the main themes and issues raised by stakeholders at these workshops and can be accessed here: https://www.ipart.nsw.gov.au/ipart-biodiversity-market-monitoring-2023-24-stakeholder-workshops
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