The Australian government on Monday launched a one-month consultation on some of the technicalities of its Nature Repair Market (NRM) scheme, including rules around project registration, biodiversity certificates, and the register.

The government is slated to launch the NRM in Jan. 2025, which will be the world’s first government-run voluntary biodiversity market, after it was legislated last year.

Feedback is being sought on rules relating to biodiversity projects and their registration, Biodiversity Certificates (BC) and their content, the register, and rules around assurances and compliance.

“The rules currently being drafted will set the foundation of the market to operate with integrity and confidence, leaving potential innovation and evolution by scheme and market participants,” the discussion paper’s introduction said.

It noted that separate consultation is occurring on the biodiversity assessment instruments and methodology determinations.

Under the rules laid out in the discussion paper, the Clean Energy Regulator, which will oversee the scheme, will only approve a project registration when it is satisfied the application meets the requirements set out in the Act, rule, and method, and that carrying out the project is likely to result in a BC being issued.

STACKING

Current or former biodiversity or carbon abatement projects, such as projects that generate Australian Carbon Credit Units (ACCUs), can participate in the NRM, the paper said.

However, they will have to either transfer the existing project to be registered and regulated under the relevant NRM method, or re-register the project under a NRM method wholly or partly on the same area as an existing or former project, known as stacking.

The paper noted however that existing or former projects could be barred from the NRM, such as those used for environmental offsetting purposes.

It also details conditions that are expected to safeguard stacked biodiversity projects from double counting, emphasising that a project must deliver outcomes that would not have occurred in the absence of the NRM.

Former or existing projects could be eligible to participate through project stacking, depending on several factors, including the interaction:

• Between what has been, or intends to be, carried out by the existing project
• The biodiversity outcome the existing project has achieved, or intends to achieve, and the proposed biodiversity project
• The conditions and requirements for the project under a method, compared to the other project’s scheme requirements

However, the paper noted the Act does not prevent or limit biodiversity projects that may have access to alternative sources of funding.

Meanwhile, the government has proposed that a biodiversity project cannot be registered where the project activity is already required under Commonwealth, state, or territory law, according to the paper.

It also said that methodologies may set further eligibility requirements for registration to ensure projects are consistent with the biodiversity integrity standards.

The paper asks whether existing projects should be eligible to participate in the NRM, and if each project must include activities beyond those already legally required by federal, state, or territory governments.

APPLICATIONS, PLANS

A list of information to be required to be submitted in the registration application was also detailed in the paper, similar to project development documents submitted to carbon abatement projects.

This includes information about the project area, specific information of the intended outcome of the project and how it will be achieved, baseline assessments of the project area, details of the bioregion that applies to the project area, stakeholder engagement, and relevant Indigenous knowledge and values that will be incorporated into the project.

A separate project plan, designed to support method implementation and project administration, may also be required alongside the project registration information, however the government said it was still considering how these plans could be incorporated.

METHODS

While the paper did not detail the proposed methods that would exist under the NRM, it did explore the rules of when a project would need to transition from one method to an updated or new one.

It said projects under the method would be generally required to transfer to new or varied methods, but a proponent could apply to the CER for an exemption under specific circumstances.

However, all registered projects would be required to transfer to another method if the minister has revoked said method, unless a project failed to meet the eligibility requirements of the new method.

The paper asks whether registered projects should be required to transition to new or varied methods.

CERTIFICATES, REPORTS

The consultation proposes a BC to contain the following:

• Biodiversity Certificate ID
• Date of Issue
• Method
• Permanence period length, start, and finish dates
• Project size in hectares
• Project location
• Biodiversity outcome defined by a set of project attributes

The paper said a BC would only contain information that is within the CER’s regulatory responsibility to ensure its accuracy and integrity.

It noted that proposed elements of a BC may be quantitative or qualitative, such as an outcome that may be defined in terms of a quantified biodiversity improvement, but the rules biodiversity project reports could require attributes either qualitatively or quantitatively.

The consultation details the rules around the two categories biodiversity project reports are split into, as laid out under the Act.

Category A would be one submitted when a project proponent applies for a BC and would demonstrate the requirements for certificate issuance as required by the method, or the rules, have been met.

Secondary Category A reports would be submitted at least every five years after the initial issuance until the end of its permanence period.

These would include, at a minimum: start and end dates of the reporting period, the biodiversity outcome, baseline condition, activities undertake, monitoring activities conducted, the change in condition, and whether or not the outcomes have been achieved, among other requirements.

Category B would a required after the proponent initially registers a project that provides details of commencement of the registered activities and progress of the project to date.

Flowchart of biodiversity project reports in the assurance process. Source: DCCEEW.

AUDITS

The consultation proposes to require an audit to accompany the initial Category A report, which would verify the project has operated within the rules of the Act, the rules, and the method. However, the government said it was still considering the timing of the audits.

It said this could be set at the time of certificate issuance, given that the status or progress of the project against its outcome, and the remaining length of the permanence period will be known, which may be critical factors in understanding project risk and ensuring appropriate assurance, it said.

What the audits will be about will mimic the requirements of the ACCU Scheme, the consultation said. However, the government is still considering if the regulator should have the discretion to add a requirement to an audit under certain circumstances.

The paper asks what factors should determine the number and timing of audits for Category A or B project reports, and should the CER have authority to set additional audit requirements, and under what circumstances should the CER require an audit.

NEXT STEPS

Respondents have just one-month to submit feedback to the Department of Climate Change, Energy, Environment, and Water, with the consultation period closing Sep. 30, 2024.

The government said stakeholder feedback could also be considered in relation to other legislative instruments and market related products.

It follows the government announcing its appointments to the Nature Repair Committee, tasked with advising the Minister for the Environment on method development, its compliance with the biodiversity integrity standards, and carrying out reviews and consultation on the NRM.

By Mark Tilly – mark@carbon-pulse.com

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