BioBanking (New South Wales)

BioBanking is a state program driven by regulatory requirements to offset impacts from urban development. As the name implies, the BioBanking program allows offset activities to occur in a 'biobank' site by third parties or by those needing credits themselves. The program calls itself a biodiversity credit market because the scheme creates: 1) a demand for credits; 2) a financial incentive create credits; and 3) a 'trading floor' (public registry) for buyers and sellers to find one another. The BioBanking program also has an associated Assessment Methodology, Credit Calculatr, and Trust Fund. The BioBanking program was born in 2007 from several pieces of legislation: the Environmental Planning and Assessment Act of 1979 (NSW), the Threatened Species Conservation Act of 1995 (NSW), and the Threatened Species Conservation (Biodiversity Banking) Regulation of 2008 (NSW). Up until the fall of 2009, the program has existed as a pilot program, testing the BioBanking Assessment Methodology and process. BioBanking has only officially been live since the fall of 2009.

The pilot BioBanking program was set up with a public registry of BioBanking agreements (aka BioBank sites), BioBank site 'expressions of interest,'  BioBanking statements (which links impacts to credits retired), available and retired credits, and transactions. As of March 2011, there are 2 active BioBank sites and there are 11 'expressions of interest.' From May 31, 2010 until Feb 23, 2011; the program has seen 607 credits transferred and 757 credits retired. Credit prices ranged from AUD $2,563 (2010) to AUD $8,000 (2011). The total value of credits transferred in 2010 was AUD $1,555,741 (or US $1,498,614, in 2010 dollars).

Developers can voluntarily use the BioBanking program to minimize and offset biodiversity impacts. To participate in the program, development projects must meet an 'improve-or-maintain' test that requires adherence to a mitigation hierarchy (avoid, minimize, offset), and then determines the project's impact on biodiversity. Impacts and required offsets are calculated with the BioBanking Assessment Methodlogy and its associated Credit Calculator software. Credits are created through protection and management of ecological communities, threatened species, and habitat corridors. BioBanking requires a 'like-for-like' trade of credits associated with  a complex number of ecosystems and species types related 50-100 vegetation types and over 1,000 threatened species in 13 bioregions.

Experience during the pilot showed that the intended 'trading floor' - the listing of available credits - was not actually used. Instead, developers lined up the offsets themselves. Early experience in BioBanking has shown that high upfront cots may damper speculative offset development by landowners.

Payments to landholders for management of offset sites are centralized through a government-managed BioBanking Trust Fund, which distributes annual payments to BioBank owners for conservation and management of the BioBank site in perpetuity. Landholders can charge those purchasing credits any agreed upon sum, but will only recieve funds after the Trust Fund is paid. So far, the players in the BioBanking market are the regulator (NSW Department of Environment, Climate Change and Water, or DECCW), the buyers (developers, transportation, wind farms, and extractive industry), consultants accredited to conduct BioBanking assessments of sites, and offset brokers (e.g. Eco Logical Australia). A shift in energy policy may result in a much larger demand for wind farm development. Also, NSW DECCW is considering a catchment-wide offset development strategy and sees themselves in the role of broker. As noted before, developers have been supplying thier own offsets so far, but landowners could also supply offsets.

Program Statistics

Date Established: 2009 Status: Active Program Type: Combination (One-Off Offset, Banking)
About the program:
Annual size of program (area): 80 (hectares) Year of Data: 2010
Cumulative size of program (area): 104.1 (hectares) Years of Data: 2010 - 2011
Annual payments of program (US$): 1,498,614 Year of Data: 2010
Cumulative payments of program (US$): 1,498,614 Years of Data: 2010 -
Notes on program size or payments:

The payment figure reported here represents transactions that occurred from the first BioBank that was established in the summer of 2009.  The transactions occurred in 2010 (AUD $1,555,741, or US$ 1,498,614, converted in Dec 2010). The cumulative area figure totals two BioBank sites that were active as of 3/2011 (80 ha in 2010, and 24.1 ha in 2011). The public register for these transactions and biobank sites can be found at: http://www.environment.nsw.gov.au/bimspr/index.htm.

The Missionaries of the Sacred Heart was required to deposit around AUD $500,000 (2010) to the BioBank Trust Fund. The remaining funds went to the landowner as profit. Growth Centres were the purchaser of credits from this BioBank. see press release: http://www.environment.nsw.gov.au/resources/MinMedia/MinMedia10051701.pdf; and biobanking register: http://www.environment.nsw.gov.au/bimspr/index.htm

The Brownlow Hill BioBank site established in Jan 2011 is required to deposit AUD $1,450,954 (Jan 2011) to the BioBank Trust Fund. The estimated profit of the bank is expected to be AUD $2,948,310 (Jan 2011). See biobank register: http://www.environment.nsw.gov.au/bimspr/index.htm.

Species or habitat types (if applicable): Dry sclerophyll forests (shrub/grass), Dry sclerophyll forests (shrub/grass) & others, Dry sclerophyll forests, (shrubby) & others, Forested wetlands & others, Freshwater wetlands & others, Grasslands & others, Grassy woodlands & others, Grassy woodlands, Rainforests, Rainforests & others, Semi-arid woodlands (grassy), Semi-arid woodlands (grassy) & others, Semi-arid woodlands (shrubby) & others, Wet sclerophyll forests (grassy) & others, Wet sclerophyll forests (shrubby) & others
Notes: State of Biodiversity Markets Report 2010 (http://www.ecosystemmarketplace.com/documents/acrobat/sbdmr.pdf); The use of market-based instruments for biodiversity protection - Habitat Banking case studies: Appendix – Case Studies: France, Australia, South Africa, Germany, Sweden, USA, other European Examples, References(http://www.forest-trends.org/~foresttr/publication_details.php?publicationID=2410); 2010 EKO-ECO.com blog post on first biobank (http://eko-eco.com/archive/australia-new-south-wales-announces-its-first-official-biobank.php) BioBanking webpages: http://www.environment.nsw.gov.au/biobanking/; http://www.environment.nsw.gov.au/bimspr/index.htm; http://www.environment.nsw.gov.au/biobanking/vegtypedatabase.htm 2010 press release on first biobank: http://www.environment.nsw.gov.au/resources/MinMedia/MinMedia10051701.pdf BioBanking reports: http://www.environment.nsw.gov.au/resources/biobanking/biobankingoverview07528.pdf; http://www.environment.nsw.gov.au/resources/biobanking/09476biobankingscience.pdf
Bank regulator information: BioBanking Team, Department of Environment and Climate Change, NSW PO Box A290, Sydney South NSW 1232, Phone: (02) 9995 6753, Fax: (02) 9995 6795, Email: biobanking@environment.nsw.gov.au Last Updated: March 14, 2011