The NSW Biodiversity Offsets Scheme (BOS), established under the Biodiversity Conservation Act 2016, incorporates various mechanisms such as the Biodiversity Assessment Method (BAM) and the Biodiversity Offset Payment Calculator (BOPC) to offset impacts of approved developments. The BOPC is critical in setting the price of biodiversity credits and calculating payment amounts for offset obligations.

However, concerns have arisen regarding the volatility of offset pricing and lack of transparency, particularly for credits with no trade history. The EYPJP review recommended redesigning the BOPC, which has now been taken over by the Biodiversity Conservation Trust (BCT).

NCC was engaged to undertake a systematic review of the BOPC’s components, focusing on the econometric and cost-structure models, market soundings, and the species credit model. The project aims to ensure robustness, transparency, and long-term solvency of the BCT. Our key outputs included a risk and issues register, model inspection, and a final report with findings and recommendations. Our review proposed incorporating risk premiums to reflect uncertainty in forecasting future land management costs (Total Fund Deposit or TFD), using probabilistic ranges derived from stochastic simulations.