These are state government-based schemes (that differ slightly by state) which in theory, at least, aim to offset any loss of native vegetation caused by land development or construction. The schemes require the developer to provide either 1st party or 3rd party offset credits to improve or protect a similar site of equivalent biodiversity value. They apply to both commercial and residential projects.
In Victoria the offset program is managed by DELWP. To purchase offsets, a 3rd party offset broker must be engaged to administer them on the purchaser’s behalf. Although the conditions of our approval required clearing a large area of (damaged) bush around the house site (41m) in order to meet our bushfire management plan, we were relieved to discover that this vegetation loss was exempt from requiring an offset specifically because it was deemed necessary to create the approved defendable space.
However, Council still required us to buy offsets in order to widen part of the access road to the house site – required to meet CFA specification for a minimum of 4.5m width along all parts of the road and the addition of two 20m x 6m overtaking bays (required every 200m).
The Process
What offsets do I need?
Offsets are measured in either General Habitat Units or Species-specific Habitat Units,
depending on the rarity of the flora to be removed. A minimum biodiversity value is also
stipulated. To arrive at these figures, a registered consultant is required to use DELWP’s algorithm that takes into account not just the extent of vegetation to be cleared but its type and overall condition, as well as general location data relevant to the site.
The cost and extent of such a survey is dependent on site-specific issues such as the type of flora, and the location of the clearing to be undertaken. In our case we were required to complete a ‘detailed’ assessment which cost approximately $3000 however an alternative ‘general’ assessment which will suffice in some circumstances and would’ve been around half that amount.
For more information on how this works in Victoria see: https://www.environment.vic.gov.au/__data/assets/pdf_file/0021/91146/Guidelines-for-
the-removal,-destruction-or-lopping-of-native-vegetation,-2017.pdf
Once Council have accepted the consultant’s findings, these offset numbers are then
included in the conditional approval. See the relevant clause from our own conditional
approval below:
“Native vegetation offsets
To offset the removal of 0.024 hectares of native vegetation, the permit holder must secure the following native vegetation offset in accordance with Guidelines for the removal, destruction or lopping of native vegetation (DELWP 2017)
- A general offset of 0.022 general habitat units located within the West Gippsland Catchment Management boundary or South Gippsland municipal area.
- With a minimum strategic biodiversity value of at least 0.561.
- Before any native vegetation is removed, evidence of the required offset must be provided to the satisfaction of the responsible authority. This evidence must be one or both of the following:
- An established first party offset site including a security agreement signed by both parties, and a management plan detailing the 10-year management actions and ongoing management of the site, and/or
- Credit extract(s) allocated to the permit from the Native Vegetation Credit Register.
How do I acquire offsets?
As per the approval above, there are two options:
1) Purchase offsets from a 3rd party landholder via an offset broker.
This is the simplest, fastest and probably cheapest (depending on amount of offsets) method. We chose this to speed up the process and and avoid what we were warned was a laborious process. Brokers tend to cover specific regions rather than operating nationally. We were given a list of three reputable businesses by our environmental consultant, but a Google search works too!
We used a company called Vegetation Link and were very happy with their services. Their website contains some good information on how the process works and we also gave them a case study testimonial that you can see at https://www.vegetationlink.com.au/case-studies/new-property-access-road-widening-mark-melissa
After providing the broker with details of our property and the offsets we required, they provided a quote to acquire from one of their 3rd party clients (landowners). The actual cost is determined by the availability of offsets from suitable 3rd party providers in the area given that they have to be within the same geographical region to broadly match the vegetation lost. Price details on all recent trades in Victoria are displayed at https://www.environment.vic.gov.au/native-vegetation on the credit register.
After accepting the quote, we received a credit trading agreement to sign that outlined the contract between us and the 3rd party provider. To give you an idea of total costs, we cleared a narrow 50m strip (approx 1 m wide) of bush along our access road and widened it in 2 places to accommodate overtaking lanes – not much clearing! This equated to 0.022 general habitat units (see note below) @ $60k per unit = $1452 paid to DEWLP who then pay the 3rd party landholder. With broker fees of $870, this gave us a total cost $2332. Once paid, we received a copy of the executed agreement and a credit extract certificate issued by DELWP which we provided to the council to demonstrate that we had met the condition.
The broker had initially told us the process could take up to six weeks however we managed to complete it from first signing to receiving the DELWP certificate in around three weeks.
Note: In our case 0.022 General habitat units equated to 0.024 Hectares of bush to be cleared, so roughly a one-to-one relationship. However, this can differ based on site specifics, vegetation type and quality.
2) Using your own property to generate the offset (first party offsets)
If your property is large enough and has suitable vegetation, it is possible to avoid the need to purchase offsets and instead meet your offset obligations by permanently securing and maintaining/enhancing an equivalent part of your own property. This initially requires an audit of your property before entering into a legal agreement with DELWP which effectively commits the landholder and future owners to permanently preserve the parcel of land by way of a covenant.
We chose not to do this, as we were advised it was quite a complex process with onerous ongoing annual reporting requirements. But if you have the right property and the time it may be worth exploring. See this link for more information:
https://www.environment.vic.gov.au/__data/assets/pdf_file/0029/329456/First-party-
offset-guide.pdf
3) Using your own property to sell offsets for 3rd party use
One step on from creating 1st party offsets for your own use is to sell your own offset credits to others. You might want to consider if your property is of sufficient size and contains vegetation of high enough quality and you are comfortable locking part or all of it away on a permanent basis. This involves linking with a broker who then finds developer purchasers who are willing to buy your offset credits.
It involves a full assessment by DELWP to determine if your property is suitable, and if so, how many habitat units it contains. The landholder must then enter into a ten year agreement with DELWP and also sign a covenant on the land to ensure it cannot be developed or changed at any later date.
Now the reality! We are told set up costs to do this start at around $20,000. Registration alone is approx. $14,000 and assessment fees, broker fees etc make up the rest. In
Victoria, at least, the 3rd party offset market is massively oversubscribed, meaning for each person seeking an offset there are already multiple landowners trying to sell one. This means demand for your offsets is unlikely to be very high. You may spend a lot of money setting this up and managing it but not actually sell any offsets. The only exception to this seems to be if your property contains rare or high value species not found commonly elsewhere. Selling species specific habitat units can be profitable if you have few competitors and find the right potential buyer.
One final caveat. Under the DELWP scheme, they receive the funds paid by the offset purchaser and then drip feed those funds to the offset provider over a ten-year period. So even if your offsets are in high demand, you are unlikely to get rich quick!
For more information on this see:
https://www.environment.vic.gov.au/native-vegetation/native-vegetation/offsets-for-the-
removal-of-native-vegetation/i-want-to-establish-a-native-vegetation-credit-site
Final thoughts based on our experience
It’s a bit questionable whether the program delivers. Prior to going down this rabbit-hole, in our ignorance we had always assumed that paying for an offset meant that somebody somewhere else was actively replacing whatever it was we took out or at least the equivalent in biodiversity value.
In fact, primarily, the scheme requires that you do not clear bush that you are not allowed to clear anyway (without buying offsets). Really????
There are a few other things you must do:
- Protect and manage native vegetation in perpetuity
- Complete management actions and all works required to implement the management plan
- Install, upgrade or maintain fencing to exclude stock and unauthorised people where they are likely to have access to the offset site
- Eradicate or prevent the growth and spread of weeds or other plants listed in the management plan or regionally
- Prevent the spread of, and as far as possible eradicate, established pest animals.
- And you can’t collect firewood, build, allow animals on to it, fertilize it, store things on it, use recreational vehicles etc.
When we look at the list, it’s things that a responsible bush owner does anyway. eg we are growing a firewood plantation, not collecting firewood from our bush.
So what we now know is that the scheme gives our money to another 3rd party landholder on the promise that they won’t also rip out that amount of bush on their property in the future.
Can’t really see how this is an offset. It’s a long way from ‘sustainable’ or carbon neutral.
Maybe the scheme is designed to inspire or help someone to regenerate bush so that in the future they might earn money from it, but it’s hard to see how this would work with the current system and oversupply.
Some advice:
Clear the land first if you are allowed to!
One point not yet mentioned is that under regulations, we already had the right to maintain our access tracks on the property and indeed have been doing so for the past 20 years. However, we had chosen to let one section of the road start to grow back, over a
couple of years because our initial planning submission had shown it to be slightly diverted to better align with the house orientation. In the end we didn’t do this, primarily because we didn’t want to take out more vegetation than was absolutely necessary. The point is, if we had widened this section to be consistent with the rest of the road, prior to the assessment being done that would’ve been perfectly legal and would’ve avoided most if not all offset costs.
My fault – I wouldn’t let Mark do it, because I didn’t realise it was legal. Sigh. We’re now and clearing the bush strip, to minimise any damage that might be done by a bulldozer. Hard work.
Use a good environmental consultant
This goes for all consultants but try and find a good one! Someone you can work with -understands what you are trying to achieve, who also has credibility with your council and has a good network of contacts if you need them. If you are in the South Gippsland region, we can recommend Shannon Dwyer from Pinnacle Environmental in Venus Bay. Finally, try to be patient – like everything else in a planning submission, all of this takes
some time!
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