When the NSW Biodiversity Offsets Scheme applies: triggers, assessment reports and consent consequences

Whether the Biodiversity Offsets Scheme applies turns first on the approval pathway. That classification controls the statutory trigger, the assessment document and the decision-maker’s response. Credit demand comes later.

Where the scheme applies, an accredited person prepares a report that assesses the proposal’s impacts on biodiversity under the biodiversity assessment method and sets out the measures the proponent proposes to avoid or minimise them. The remaining impact is then generally offset by retiring biodiversity credits, or by paying an amount set by the offsets payment calculator into the Biodiversity Conservation Fund.

The governing provisions are in the Biodiversity Conservation Act 2016 (NSW) (BC Act) and the Biodiversity Conservation Regulation 2017 (NSW) (BC Regulation).

Start with the approval pathway

Do not begin and end with the Biodiversity Values Map. Classify the proposal first. If the pathway itself is uncertain, our map of NSW development approval pathways is the place to start.

Pathway	Assessment consequence
Ordinary Part 4 development	Under section 7.7, a development application must be accompanied by a biodiversity development assessment report (BDAR) if the proposal is likely to significantly affect threatened species under the Part 7 tests. The Minister may, by an order under section 7.7(3), exempt an application relating to particular development, or a kind of development, but only in connection with a natural disaster or where the Minister considers there are exceptional circumstances.
State significant development (SSD) or State significant infrastructure (SSI)	Current section 7.9(2) provides: “Any such application is to be accompanied by a biodiversity development assessment report unless the Planning Agency Head determines that the proposed development is not likely to have any significant impact on biodiversity values.” Until 1 July 2026, the Planning Agency Head and the Environment Agency Head had to make that determination together. A saving provision, explained under the reforms below, requires some applications lodged before that date to be determined as if the change had not commenced. Our article on State significant development in NSW explains the wider assessment.
Part 5 activity	The biodiversity offsets scheme threshold route is excluded. If the activity is otherwise likely to significantly affect threatened species, the assessment-document rules in section 7.8 apply.
Vegetation clearing outside a development application	Clearing may require approval through the Local Land Services Act 2013 (NSW) or Chapter 2 of the State Environmental Planning Policy (Biodiversity and Conservation) 2021. The NSW Government pathway guide identifies when the threshold engages the Native Vegetation Panel or other clearing-approval process.
Biodiversity-certified land	Section 7.6 excludes Part 7 for development and activities on certified land. The more specific consequences are in section 8.4. Confirm the certification boundary and conditions; do not assume an entire lot is certified.

Part 5 requires separate treatment. Section 7.2(1)(b) now states only: “the development exceeds the biodiversity offsets scheme threshold”. Section 7.2(2) then provides: “To avoid doubt, subsection (1)(b) does not apply to development that is an activity subject to environmental impact assessment under Part 5 of the Environmental Planning and Assessment Act 1979.” The exclusion applies to the biodiversity offsets scheme threshold route as a whole, including its area-clearing and Biodiversity Values Map limbs. If the activity is otherwise likely to significantly affect threatened species, section 7.8 requires the environmental impact statement to include or be accompanied by a species impact statement, or a BDAR if the proponent elects that route.

A modification can also engage the scheme. Section 7.17 applies to an application to modify a development consent, or a State significant infrastructure approval, granted after Division 4 of Part 7 commenced. If the Division applies to the development as proposed to be modified, a further BDAR must be submitted with the modification application. That is so even if the Division did not apply to the original development, for example because the modification is what takes the development over the threshold. No further report is needed if the decision-maker is satisfied that the modification will not increase the impact on biodiversity values, or if a section 7.7(3) exemption order would have covered the application.

Three routes into the scheme under section 7.2

For a pathway to which it applies, section 7.2(1) treats development or an activity as likely to significantly affect threatened species if any one of these routes is engaged:

1. the section 7.3 significant-effect test;
2. the biodiversity offsets scheme threshold; or
3. the proposal is carried out in a declared area of outstanding biodiversity value.

They are alternative routes. A proposal below the area threshold and outside mapped land may still engage the section 7.3 test. Conversely, the mapped-land and area limbs do not require a separate section 7.3 conclusion.

The area-clearing calculation

Clause 7.1 and clause 7.2 of the BC Regulation set the area route:

Minimum lot size applying to the land	Native vegetation clearing that reaches the threshold
Less than 1 hectare	0.25 hectare or more
1 hectare to less than 40 hectares	0.5 hectare or more
40 hectares to less than 1,000 hectares	1 hectare or more
1,000 hectares or more	2 hectares or more

The minimum lot size is the standard minimum lot size that an environmental planning instrument sets for development generally on the land. If no instrument sets one, the actual size of the allotment is used (clause 7.2(2)). If the land has different minimum lot sizes, the smallest applies. Separate patches of clearing are added together (clause 7.2(3)).

The calculation is project-wide, not a choice of the smallest visible works pad. Include associated clearing and apply the method the Environment Agency Head publishes under clause 7.2(4). For a subdivision, clause 7.1(3) includes clearing that the consent authority or approval body considers required or likely to be required for the purposes for which the land is to be subdivided. That prevents likely future lot clearing from being fragmented out of the first assessment. Once counted at the subdivision stage, that clearing is not counted again when the later development of the lots is tested against the threshold.

The NSW Government’s Biodiversity Values Map and Threshold Tool (BMAT) guidance explains how to generate a dated threshold report. Keep the report, spatial inputs, minimum-lot-size source and clearing calculation with the application file.

Clearing native vegetation on category 1-exempt land is disregarded for the threshold under section 7.4(2). That does not remove every biodiversity issue. Section 6.8(3) says the biodiversity assessment method is to exclude the assessment of the impacts of clearing native vegetation and loss of habitat on category 1-exempt land “other than any impacts prescribed by the regulations under section 6.3”. The statutory exception, not guidance, is the source of the prescribed-impact qualification; the NSW Government guidance explains its administration.

What the Biodiversity Values Map does, and does not, do

The mapped-land limb in clause 7.1(1)(b) requires clearing of native vegetation, or another action prescribed by clause 6.1, on mapped land. A coloured map overlay alone is not enough if the proposal involves neither clearing nor a prescribed action in the mapped area.

Check the live map close to lodgement. The Government’s map-update page records amendments and explains the map version displayed by BMAT.

Two current exceptions require careful treatment:

• Clause 7.3(4) contains a confined exception for development, other than subdivision, on a mapped lot that was created by a subdivision carried out before the BC Act commenced, if the lot is in one of the zones the clause lists. The draft 2026 regulation discussed below would remove this exception.
• Clause 7.3(5) provides: “If an area of land is included in the Map, proposed development to be carried out in that area of land does not exceed the biodiversity offsets scheme threshold if it is the subject of an application for planning approval when the area is so included or within 90 days after it is so included.” The official BMAT guidance explains the administrative treatment of that confined window. Other trigger routes remain available.

The map is therefore a dated statutory input, not a permanent parcel certificate.

Areas of outstanding biodiversity value and the section 7.3 test

Development or an activity in a declared area of outstanding biodiversity value engages section 7.2(1)(c) independently of the threshold.

The section 7.3 test is a separate, qualitative inquiry into likely effects on threatened species, ecological communities and their habitats. It must be applied to current ecological evidence and the whole proposal. A threshold report is not a substitute for that assessment.

A BDAR requires accredited preparation and timely submission

A BDAR is prepared by an accredited person under section 6.12. It applies the biodiversity assessment method (BAM) to:

• assess site biodiversity values and project impacts;
• record measures to avoid and minimise those impacts; and
• calculate the number and class of credits required for residual impacts.

The BAM tools and resources support the technical assessment. BMAT performs threshold screening; it is not the BDAR and does not replace field work or BAM calculations.

Certification timing matters. Section 6.15(1) says a biodiversity assessment report “cannot be submitted in connection with a relevant application” unless the accredited person certifies the report’s basis date and “the report is submitted within 14 days after the certification date”. Manage survey season, design changes, final certification and portal submission as one program.

Credit conditions and serious and irreversible impacts have different consequences

For an ordinary Part 4 application required under Division 2 to be accompanied by a BDAR, section 7.13 requires the consent authority to consider the report. Section 7.13(3) provides:

“Subject to subsection (4), if the consent authority decides to grant consent and the biodiversity offsets scheme applies to the proposed development, the conditions of the consent must require the applicant to retire biodiversity credits to offset the residual impact on biodiversity values of the number and class specified in the biodiversity development assessment report.”

Section 7.13(4) states the exception and reasons duty:

“The consent authority may reduce or increase the number of biodiversity credits that would otherwise be required to be retired if the consent authority determines that the reduction or increase is justified having regard to the environmental, social and economic impacts of the proposed development. The consent authority must give reasons for a decision to reduce or increase the number of biodiversity credits.”

A reduction has a further consequence for ordinary Part 4 development. Where a Minister is not the consent authority, consent cannot be granted for development likely to significantly affect threatened species without the concurrence of the Development Coordination Authority, unless an exemption order applies or the application is accompanied by a BDAR and, where the scheme applies, the conditions require at least the number and class of credits the report specifies (section 7.12). Before 1 July 2026, that concurrence was the Environment Agency Head’s, and it still is for an application covered by the saving provision explained under the reforms below.

For Part 4 consents, SSD, SSI and Part 5 activities alike, a credit condition must be complied with before any development or activity that would impact on biodiversity values is carried out, although retirement can be staged to match stages of the project (sections 7.13(5)–(5A), 7.14(4) and 7.15(5)). The obligation to retire credits can generally be met instead by paying into the Biodiversity Conservation Fund the amount set by the offsets payment calculator (section 6.30). From 1 October 2026, that amount is calculated under the Biodiversity Offsets Payment Calculator Order 2026 (NSW), which replaces the 2022 Order. A quote issued under the 2022 Order generally continues to govern the amount if payment is requested by the quote’s expiry date.

For SSD and SSI, section 7.14 also starts with the BDAR credit requirement. A different condition generally requires the concurrence of the Minister administering the BC Act, although an increase that does not reduce another credit class can be made without it. If the Minister has not given written notice of a decision within 14 days of receiving a written request, or another period prescribed by the regulations, concurrence is taken to have been given without conditions (section 7.14(3D) and (3G)). For an elected Part 5 BDAR pathway, section 7.15 permits different credit conditions but requires reasons for a reduction.

Serious and irreversible impacts (SAII) are not simply a larger offset bill. Section 7.16(2) requires the consent authority to refuse an application to which Division 4 applies if, in its opinion, the proposed development is likely to have SAII. Under section 7.16(2A), that refusal duty does not apply to SSD or to an application exempted from the BDAR requirement by an order under section 7.7(3). For SSD, SSI and Part 5 activities, the decision-maker must instead take SAII into consideration and determine whether there are any additional and appropriate measures that will minimise those impacts. The principles for identifying SAII are in clause 6.7 of the BC Regulation.

Recent reforms and the unmade 2026 regulation

The Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Act 2024 (NSW) was assented to on 2 December 2024 and commenced on 7 March 2025, except for its genuine-measures provisions. Operative changes include recognition of the avoid, minimise and offset hierarchy in the Act’s purposes and changed credit-condition and SSD concurrence rules. The NSW Government reform update summarises them, including new public registers.

Separately, Schedule 3.1, item 1 of the Environmental Planning and Assessment Amendment (Planning System Reforms) Act 2025 (NSW) removed the Environment Agency Head from section 7.9(2), with effect from 1 July 2026 (commencement proclamation 2026 (266), published 19 June 2026). The same Schedule gave the section 7.12 concurrence to the Development Coordination Authority from that date. A development application, or an application to modify a development consent, lodged but not finally determined before 1 July 2026 must be determined as if those amendments had not commenced (Environmental Planning and Assessment Regulation 2021 (NSW), Schedule 6, section 46). That saving provision does not refer to applications for approval of State significant infrastructure.

As at 30 September 2026, the genuine-measures provisions (Schedule 1, items 21, 22 and 25 of the 2024 amending Act) had not commenced. When they do, a BDAR will have to set out and assess, under the BAM and the regulations, the “genuine measures” the proponent has taken and proposes to take to avoid and minimise impacts on biodiversity values. The regulations may then set standards for assessing those measures.

The draft Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Regulation 2026 was exhibited until 17 July 2026. As at 30 September 2026, it had not been made. Among other things, it would:

• take a proposal outside the Biodiversity Values Map route if the clearing or other action on mapped land covers 100 square metres or less, unless the land includes a declared area of outstanding biodiversity value;
• remove the clause 7.3(4) exception for lots created by subdivisions carried out before the BC Act commenced;
• specify what a BDAR must contain, including evidence of how impacts have been avoided, and set criteria for assessing a measure as a genuine measure; and
• require a declaration that an acceptable measure has been taken to try to obtain the credits before a large obligation is met by payment into the Biodiversity Conservation Fund (the draft’s threshold is 100 credits of the same class).

Each of these would start on a later date. They are proposals only and must not be applied as if they were law.

What the appellate authority establishes

In Timbarra Protection Coalition Inc v Ross Mining NL & Ors (1999) 46 NSWLR 55; (1999) 102 LGERA 52; [1999] NSWCA 8, Spigelman CJ recorded at [99] that Handley JA, with Kirby ACJ and Priestley JA agreeing, had delivered the reasons in Helman v Byron Shire Council (1995) 87 LGERA 349. His Honour concluded at [106] that the reasoning in Helman “clearly indicates” that a species impact statement, when required, is an “essential preliminary” or “essential condition” to a valid decision-making process. Mason P and Meagher JA agreed with Spigelman CJ: [123]–[124]. Timbarra concerned judicial review under predecessor legislation, not the present BC Act. Its significance lies in the need to satisfy any statutory condition governing the power to determine an application.

Resolve the pathway while the design can still change. Fix the whole project footprint, retain a dated threshold record and test each statutory route. Any BDAR must be commissioned in time for valid certification and submission, with credit conditions and SAII modelled before the design is fixed.

Where credits must be bought, they are created by landholders under biodiversity stewardship agreements. Our page on biodiversity and land clearing sets out the situations in which these rules most often affect a project, and our project approvals and licensing practice covers the wider approval.