The Federal Government has released a draft National Environmental Standard for Environmental Offsets (Offset Standard) as part of its proposed reforms to the Environment Protection Biodiversity Conservation Act 1999 (Cth) (EPBC Act).
If implemented, the Offset Standard will significantly raise the bar for project approvals. Proponents will need to demonstrate that offsets deliver a measurable net gain to the affected protected matter, rather than simply avoiding net loss. Offsets must also be secured before project impacts occur (although delivery can take place in stages).
Before any conditions can be imposed to manage residual significant impacts, proponents must show that those impacts are not unacceptable and that appropriate steps have been taken to avoid, mitigate or repair them.
New offset options: NRM certificates and restoration changes
The draft Offset Standard outlines three main offset mechanisms:
delivering on‑ground activities
purchasing biodiversity certificates from the Nature Repair Market (NRM)
paying a “restoration contribution charge” into a dedicated Commonwealth account.
The Federal Government has also released a draft National Environmental Standard for Matters of National Environmental Significance (MNES Standard). We will be publishing a separate analysis of this soon.
Key features of the draft Offset Standard
The Offset Standard is underpinned by eight principles to ensure offsets are feasible at the time of decision based on appropriate data and expert verification, delivering benefits that are direct, tangible and quantifiable for the affected protected matter.
Key principles include
Offsetting would be anchored to the delivery of a net gain for the affected protected matter. To evidence net gain, offset activities must produce direct, tangible and quantifiable benefits to the same protected matter that is impacted, contributing to its recovery or conservation. Decision‑makers must have a high degree of certainty - supported by appropriate data and expert or independent verification - that the offset will likely deliver the stated improvement.
Offsets should relate directly to the same type of protected matter. However, strategic flexibility would be available where a conservation planning document or bioregional guidance identifies a higher conservation priority for the relevant protected matter, enabling deviations that better support recovery at a landscape scale.
Offsets should be delivered in the same bioregion as the impact, or, where not reasonably practicable, in an ecologically similar bioregion as close as possible that achieves an equal or better outcome. Where practical, offsets should occur within the same state or territory.
Offsets must be secured and commence prior to the project impact occurring, including payment of any restoration charge.
Offset outcomes must be maintained until the outcome is self‑sustaining. For temporary impacts, this means at least 25 years. For non‑temporary impacts, up to 100 years or until the Federal Minister for the Environment determines that the outcome is self‑sustaining. Proponents should assess how long‑term maintenance obligations will be resourced and contracted.
The Federal offsets framework is designed to interact with accredited state and territory regimes. In particular, the additionality requirement can be met where the offset is an approved state or territory offset, allowing integration of state‑based instruments into EPBC Act, provided that the offset meets the Offset Standard.
Interaction with the NRM
Another important change in the proposed EPBC Act reforms is the removal of the current prohibition on using NRM biodiversity certificates for compliance with offsetting schemes. This is particularly significant because this prohibition was initially included as part of Labor’s agreement with the Greens to secure passage of the Nature Repair Act 2023 (Cth).
If those reforms proceed, certificates issued under the NRM would be available for use towards offset liability alongside on‑ground activities and the restoration contribution charge.
Implications for proponents and investors
The draft Offset Standard represents a shift towards more measurable and enforceable environmental outcomes. Project proponents will face:
increased front-end certainty requirements
stricter evidence and verification standards
longer-term maintenance and monitoring obligations
the need to consider new offset options, including biodiversity certificates and restoration charges.
Early engagement in the consultation process will be critical to help shape how these reforms are implemented and how they interact with existing state-based frameworks.
Next steps
The Offsets Standard will become a legislative instrument once the broader reforms to the EPBC Act are passed. Public consultation is open until 5:00pm AEDT on Friday 30 January 2026. See our latest article on the overarching EPBC Act reforms here.
Our Environment and Planning and Climate Change and Sustainability teams are tracking developments closely. If you would like to discuss any aspect of the reforms or their potential impact on project planning and approvals, please get in touch with our team.