First Nature Repair Market scheme method approved

The first method for Australia’s Nature Repair Market scheme, under which proponents can earn tradeable biodiversity certificates, has been approved. The Replanting Native Forest and Woodland Ecosystem method aims to enhance biodiversity by replanting native ecosystems in previously cleared landscapes.

We have provided an overview of the new method in this article.

Background

Australia’s Nature Repair Market was established in 2023 to encourage investment in projects that restore and protect the natural environment. The release of the first method marks a significant milestone, effectively enabling the Nature Repair Market to operate. This will serve as an interesting test case for the market's functionality and impact.

For each registered biodiversity project, a biodiversity certificate is issued. These certificates can be held, sold, or deposited with the Clean Energy Regulator.

Market demand for the certificates is expected to come from reporting and disclosure requirements, as well as philanthropic or ESG type investment. It is important to note that biodiversity certificates cannot be used to satisfy any environmental offsetting requirements.

Proponents can ‘stack’ registered biodiversity projects with projects under the ACCU scheme, provided they meet both sets of regulatory requirements.

Overview of the Replanting Native Forest and Woodland Ecosystems method

The method has the following key features:

• The method calls for projects which replant native forest and woodland ecosystems in regions that have historically experienced widespread clearing and thinning of native vegetation.
• Only projects located within specific biogeographical areas are eligible.
• Projects must be located in areas which have historically experienced widespread clearing and thinning of native vegetation and there are limitations on when the clearing occurred. The land must have been comprehensively cleared more than 7 years prior to the date of the project application (or 5 years if there has been a change of ownership) and native vegetation on the land must not have been mechanically or chemically damaged or destroyed in the 3 years prior to the date of the project application.
• The plantings must be maintained for the duration of the permanence period, typically 25 or 100 years.
• Once the project is established, additional monitoring and reporting are required to demonstrate the project is on track, as well as auditing.
• No ground or rock disturbance is permitted other than for the purpose of establishing the plantings.
• It is intended that the project outcome will be achieved within 25 years of initial plantings (regardless of whether the proponent has opted for a 25 or 100 year permanence period).
• The project's impact on biodiversity is assessed by comparing the change in ecosystem condition to the counterfactual scenario (i.e. the condition of the project area if the project was not undertaken).

The usual consents will still be required to carry out the project. This includes obtaining any necessary tenure arrangements, the consent of any registered native title body corporate, the consent of eligible interest holders (e.g. mortgagees, the state or territory if Crown land), as well as any planning or environmental approvals.

The biodiversity certificate is issued upon application when the planting reaches certain ecological condition and culturally significant entity indicator thresholds, and it is clear the project can achieve the biodiversity outcome.

Methods in the pipeline

The Department of Climate Change, Energy, the Environment and Water (Department) has indicated a pipeline of additional methods are proposed, which include:

• A permanent protection method— to protect and conserve biodiversity in line with Australia’s national goal of protecting 30 percent of land by 2030.
• A native forest method to protect, restore and manage native forests.
• An invasive pest management method to focus on the control of specific feral pests or weeds.
• A rangelands method to manage and enhance habitat in the arid and semi-arid areas of Australia.

The Department has also flagged that they are partnering with First Nations organisations to develop Indigenous-led methods.

Please reach out to us if you would like to better understand the Nature Repair Market or eligibility under this method.