Biodiversity offset projects can be found on every major continent besides Antarctica. As of 2019, over 100 countries had, or were developing, policies for biodiversity offsetting and more than 37 countries required biodiversity offsets by law. The terms used to describe biodiversity offsetting and the method of implementation differ regionally. The term 'biodiversity offsetting' is generally used across Australia, New Zealand, South Africa, and the United Kingdom. However, different terms are used elsewhere: required under the IFC's Performance Standard 6 (PS6). PS6 is regarded as influential and an example of
best practice. However, as of 2019, only 8 offset projects had been implemented directly because of this requirement. Only a small proportion of offsets arise in this way, but the projects generated tend to be larger than those arising from public policy requirements. avoided loss offsets to mitigate impacts on biodiversity by compensating for forest clearance at the mine. The project is on track to achieve no net loss, but the permanence of conservation outcomes achieved using its biodiversity offsets is not yet known.
Biodiversity compensation in Colombia In
Colombia, the equivalent term for biodiversity offsetting translates literally to biodiversity compensation (
Spanish:
compensaciones de biodiversidad). Required principles to guide offset design include a no net loss objective, equivalence between the offset and impacted ecosystem, additionality, and a minimum duration of the length of the development project. Several different regulations are in place to govern biodiversity offsets, including in relation to the environmental licensing system, forest reserve areas, harvesting of forests, and the exploitation of
endangered species. require an objective of "no net loss" of biodiversity and ecosystem functionality, also requiring offsets to be based on principles of
additionality, ecological equivalence, and compliance with the mitigation hierarchy. Offsets must last for the duration of the environmental impacts and must be in place when an environmental licence is approved. A goal similar to "no net loss", referred to as "maintain biodiversity" (
simplified Chinese:
维护生物多样性;
traditional Chinese:
維護生物多樣性;
pinyin:
wéihù shēngwù duōyàng xìng) is used in eco-compensation. However, offsets do not have to adhere to a "like for like" principle, where the offset is ecologically equivalent to the development site. The term 'ecological compensation' takes on multiple meanings in
Chinese environmental policy, including compensation for ongoing development impacts (equivalent to biodiversity offsetting policies in other countries), compensation for previous development impacts, payments for
ecosystem services, and compensation for illegal use of natural resources. With the aim of reversing the
habitat destruction caused by rapid expansion of infrastructure, the
Chinese Government first launched its eco-compensation scheme between the late 1990s and early 2000s. Some of the biodiversity offsetting mechanisms used in China include the forestry vegetation restoration fee (FVRF), grassland vegetation restoration fee (GVRF,
simplified Chinese:
草原植被恢复费), and wetland restoration fee (WRF). The forestry vegetation restoration fee (FVRF) (
simplified Chinese:
森林植被恢复费) was the earliest ecological compensation mechanism developed in China FVRFs were launched in 1998 as part of China's first Forestry Law, which established "a compensation fund for the benefit of the
forest ecology". They are also the most widely used compensation mechanism in China. This is because of a policy focus on prioritising forest protection and afforestation to promote sustainability. By contrast, WRF is in its infancy and GVRF has only been applied to a some regions. Compensatory mitigation (in the
wetlands context) is defined by the
United States Department of Agriculture (USDA) as "mitigation that offsets unavoidable impacts to
wetlands or other aquatic resources in advance." This is achieved through restoration, creation, enhancement, or preservation. The most common mechanism for compensatory mitigation in the United States is
mitigation banking - a concept that has since been expanded to create other forms of
biodiversity banking, such as
conservation banking and habitat banking. Mitigation banking is a market-based system to compensate for manipulation of wetlands (or other aquatic resources, like
streams) through restoration, creation, or enhancement of wetlands at mitigation banks that generate credits. Credits can be purchased by developers to offset/compensate for the debit incurred by unavoidable adverse impacts to wetlands. Section 404 of the
Clean Water Act forms the legal basis of wetland mitigation banking in the United States, administered by the
US Army Corps of Engineers and overseen by the
Environmental Protection Agency.
Offsetting in Australia In Australia, biodiversity offsetting has been applied since at least 2001, under the conditions of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). At federal and state/territory levels, policies have been established to regulate biodiversity offsetting; potential biodiversity offsets may need approval both under the EPBC Act and under the policies of the state/territory where the development is occurring. As well, much of the scientific research into biodiversity offsetting outside of the US has been conducted by Australia, especially organisations such as CEED and CSIRO. The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) regulates biodiversity offsetting at the
federal level and forms the basis of the government's 'Environmental Offsets Policy'. Under the EPBC Act, if a proposed development (such as housing developments, mining projects, or road construction) is likely to have an impact on a protected area, an
Environmental Impact Assessment must be conducted. Offsetting can be carried out, as part of a mitigation hierarchy, to compensate for adverse impacts that cannot be avoided or minimised. The involvement of the federal government is limited to
matters of national environmental significance, known as 'protected matters' under the EPBC Act. For example, potential adverse impacts on biodiversity where
world heritage properties,
wetlands of international importance under the
Ramsar convention, and listed
threatened species are concerned.
State and territory offsetting requirements State and territory governments within Australia have established their own biodiversity offsetting policies, including in the
Federal Capital Territory,
New South Wales,
Queensland,
Victoria,
Western Australia, and the
Northern Territory - in
Tasmania, biodiversity offsetting policy is only applied in specific contexts.
Biodiversity banking mechanisms are also operated on a regional level within Australia. Biodiversity banking involves the generation of
biodiversity credits (as proxies for
biodiversity) These requirements arise from the Federal Nature Conservation Act 1976, which includes Impact Mitigation Regulations (IMR,
German:
Eingriffsregelung) that require offsets where 'natural assets' (e.g. flora, fauna, soil, water, climate, etc) and their functions are impacted. Originally, Impact Mitigation Regulations required that developers compensated for impacts themselves. This was expected to occur through habitat restoration to compensate for impacts by targeting the same aspects of biodiversity as the project negatively and unavoidably impacted. However, later amendments allowed for compensation to also be carried out away from the site of impact through private habitat banks. Habitat banks are a form of
biodiversity banking, known in Germany either as compensation pools (
German: Flächenpools) or eco-accounts (
German: Ökokonten). The EIAR includes implicit legal provisions for the use of offsets. These laws form the foundation of the 'National Biodiversity Offset Guideline', issued by the
Ministry of Forestry, Fisheries & the Environment in January 2023. According to these guidelines, biodiversity offsets are required when it is likely that a proposed activity could have residual negative impacts on biodiversity of "medium or high significance" (where biodiversity may be lost in vulnerable areas, or areas of recognised importance), once measures have been taken to avoid or minimise these impacts. The implementation of a national guideline on biodiversity offsetting was recommended by the National Biodiversity Framework (2019-2024). In response to the recommendation, the 'National Biodiversity Offset Guideline' was released by the
Ministry of Forestry, Fisheries & the Environment The principles of the guideline acknowledge offsetting as the last step of the mitigation hierarchy, a preference for ecological equivalence of offsets, and the need for offsets to be additional to conservation measures that are already legally required. It does not mention "no net loss" or "net positive impact" as goals for biodiversity, instead discussing the need to "counterbalance a residual impact". Instead, the guideline attaches offset requirements to an acceptable loss of threatened vegetation types and
ecosystem services. The use of biodiversity offsetting in South Africa has attracted debate. In addition, Uganda has published a 'National Biodiversity and Social Offset Strategy' and a 'National Biodiversity Strategy and Action Plan' for 2015-2025 which mentions biodiversity offsets. The NEA puts forward principles of environmental management that include a requirement to apply the mitigation hierarchy in environmental and social impact assessments (ESIA). According to the "like-for-like or better principle" offsets must provide outcomes for biodiversity that are either equivalent to or better the biodiversity lost. Developers are also required to monitor projects to ensure that mitigation measures are effective and that offsets achieve NNL, as part of the Act. For example, creation of an offset between
Kalagala Falls and
Itanda Falls on the
River Nile to mitigate the negative impacts of the
Bujagali Hydroelectric Power Station, agreed between the
government of Uganda and the World Bank as a condition for financing a dam at Bujagali Falls in 2007.
Bujagali Falls was flooded as a result of the project. This was criticised for its impacts on biodiversity, the tourism industry that relied on recreational activities there, and because Bujagali Falls had spiritual importance for local people. The
government later broke the offset agreement in the area when it supported the construction of the
Isimba Hydroelectric Power (started in 2013 and now complete) within the Kalagala-Itanda offset area. under the proposed development, relative to the pre-development scenario, using a 'Statutory Biodiversity Metric'. The statutory requirement does not apply uniformly to all forms of development, with exemptions and transitional arrangements for certain small developments, permitted development rights, and nationally significant infrastructure projects. Failure to meet this criterion obligates the developer to adjust their project plan, or compensate for the shortfall in biodiversity units through the purchase of biodiversity offsets, which are delivered either through a payment to the council or a third party, such as a broker managing a habitat bank. If no compensation sites are available within the local planning authority where the development is planned, compensation is permitted in other local authorities, triggering an increase in compensatory units required due to a spatial multiplier within the Metric. As a final option, developers can purchase 'statutory biodiversity credits' from the national government. Offsetting therefore represents a small proportion of biodiversity enhancements delivered through the policy; the majority of biodiversity enhancements come through habitat management activities implemented within the boundaries of new developments themselves. by combining factors like area, habitat condition, distinctiveness, and multiple parameters (like risk, the time required for habitat development, and the ecological significance of the site on a landscape scale) for each habitat section within the development area. Using the metric, an overall biodiversity score, measured in biodiversity units, is generated. Baseline biodiversity units within the development area and associated compensation areas owned or managed by developers are compared with anticipated biodiversity units following development. For example, if a develop damages a habitat of "high distinctiveness", they will be required to compensate with habitat of the same type, instead of trading for a less ecologically-valuable habitat. Preliminary scientific evidence on the ecological outcomes of Biodiversity Net Gain suggests the policy facilitates the trade of habitat losses from construction for smaller, but more ecologically valuable habitats to be delivered in the future. Because of this, it is thought that enforcing the policy's use by developers will be a challenge. Additionally, there are concerns that the Biodiversity Metric may not be an effective proxy for biodiversity, and therefore that a net gain in biodiversity demonstrated by the metric may not translate into real-world improvements in biodiversity such as wildlife populations. At the time the report was written, offsetting was mandatory only in areas where a development of great public interest would have a significant impact on the European Union's Natura 2000 network or any site inhabited by a European protected species. The Review recommended the establishment of pilot schemes to test potential biodiversity offsetting systems in the country. A 2011 white paper 'The natural choice: securing the value of nature' responded to the Lawton review and announced plans to introduce voluntary biodiversity offsetting through pilot schemes. In April 2012, the Department for Environment, Food, and Rural Affairs (Defra) launched a voluntary biodiversity offsetting pilot scheme. Developers in pilot areas were required to provide compensation for biodiversity loss under planning policy and were able to choose offsetting to do so. The scheme also aimed to test a biodiversity offsetting metric developed by Defra. This scheme included 6 pilot areas: Doncaster, Devon, Essex, Greater Norwich, Nottinghamshire, and Warwickshire. In March 2014, the pilot scheme ended and was reviewed by Collingwood Environmental Planning Limited in partnership with the Institute for European Environmental Policy (IEEP). However, the scheme also drew criticism from Friends of the Earth who described it as a "licence to destroy" and the possibility of like-for-like compensation of biodiversity loss has been questioned. In 2012, a standard metric for biodiversity was piloted by Defra for use in the biodiversity offsetting pilot scheme. Consultation from environment, planning, land management, academic, and development sectors led to numerous updated biodiversity metrics over a period of several years. Biodiversity Metric 4.0 was launched by Defra and Natural England in March 2023 to measure Biodiversity Net Gain. A Statutory Biodiversity Metric was later introduced as part of the Environment Act as the legally mandated metric for use under the biodiversity net gain policy. This metric uses habitat as a proxy for biodiversity The Bill was later enacted as the
Environment Act 2021. Initially, BNG was planned to come into force by November 2023, but delays meant that it was not implemented until February 12, 2024. This delay was criticised by environmentalists, including The Wildlife Trusts, who called it "another hammer blow for nature." In response to these criticisms, a government spokesman reaffirmed the government's commitment to BNG, saying that "we are fully committed to biodiversity net gain which will have benefits for people and nature." == Economic value ==