On 9 February 2022, Agriculture Minister the Honourable David Littleproud MP introduced the Agriculture Biodiversity Stewardship Market Bill (ABSM Bill) which establishes a framework to underpin a national voluntary agriculture biodiversity stewardship market. The ABSM Bill facilitates private investment in projects that support biodiversity protection and restoration, allowing agricultural landholders to undertake projects that benefit biodiversity and receive a tradeable certificate for doing so.
Snapshot
- The ABSM Bill aims to create a nationally consistent framework to describe and verify biodiversity benefits, create a new form of tradeable personal property in the form of a biodiversity certificate and establish assurance and compliance systems to provide market certainty.
- The ABSM Bill forms part of the Australian government's broader investment in agricultural biodiversity stewardship, including the National Stewardship Trading Platform and the Agriculture Biodiversity Stewardship pilots.
- The ABSM Bill is designed to complement the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act) to allow landholders to deliver biodiversity and carbon benefits. There is the potential for the biodiversity market to complement other environmental markets (e.g. for carbon and environmental offsets), provided the requirements of both systems (such as additionality) are met.
Relationship with carbon credits
The ABSM Bill is similar to the CFI Act which establishes a scheme for Australian Carbon Credit Units (ACCUs). The ABSM Bill is intended to enable landholders to undertake landscape restoration and management projects that can deliver both biodiversity credits and ACCUs. Unlike ACCUs however, a biodiversity certificate under the ABSM Bill is heterogenous and only one certificate will be issued for each project. The certificate will outline consistent, verifiable information about each project which will enable the market to assess its value.
Eligible persons and eligible land
The ABSM Bill provides for a project proponent (an eligible person) to apply for the registration of a biodiversity project for eligible land, and the subsequent issue of a biodiversity certificate.
The definition of "eligible person" means an individual, body corporate, a trust or a corporation sole to allow flexibility for farmers and other persons to participate in the scheme in a manner consistent with their preferred business models. An "eligible person" must satisfy a fit and proper person test.
"Eligible land" under the ABSM Bill means agricultural land within Australia, or as otherwise described by the rules. An eligible person that holds eligible land may apply to the Clean Energy Regulator (CER) for the registration of a biodiversity project. Upon satisfying the conditions of registration, the project proponent will receive a biodiversity certificate which constitutes personal property owned by the legal holder of the certificate. The activity period and permanence period of the biodiversity project will be determined in accordance with the applicable protocol determination. Projects will be variable, cancellable, subject to protocol determinations and transferrable. The owner may transfer the biodiversity certificate by assignment, by will and by devolution by operation of law.
Agriculture Biodiversity Stewardship Market Advisory Committee (ABSMAC)
The ABSM Bill will establish the ABSMAC, an independent advisory committee which will advise and provide recommendations to the Agriculture Minister on the development of protocol determinations under the ABSM Bill. Protocol determinations have a wide-reaching application and outline how a registered biodiversity project is to be carried out, among other things. Each project must be subject to a protocol determination. The ABSM Bill will also allow the Agriculture Minister to vary or revoke a protocol determination which will require the consideration of advice provided by the ABSMAC..
Biodiversity certificates
"Biodiversity certificates" will be a form of tradeable personal property that is owned and traded separately from the land. The certificate will be required to contain the key attributes of the project and the kind of biodiversity that is being delivered and maintained. It will remain valid for the duration of the project. To ensure transparency, accessibility and accountability, certain certificate information will be made publicly available. While it is expected that purchases of biodiversity certificates will primarily be made by private sector investors, the ABSM Bill also enables the Commonwealth to purchase certificates. The rules may establish an online platform to facilitate the trading of biodiversity certificates.
Compliance and enforcement
Compliance and enforcement measures are outlined in the Bill to ensure that registered biodiversity projects comply with legislation, including requirements for a project proponent to provide reports about the biodiversity project. Assurance and enforcement processes will be managed by the CER throughout the duration of the project. Enforcement measures include monitoring, investigation, civil penalties, infringement notices, cancellation of projects, enforceable undertakings and injunctions.
The ABSM Bill indicates that the Australian government is working toward a market-based approach for biodiversity, which will have implications for land management and the ability to deliver environmental credits with co-benefits.
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