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Third Party Supply of Offsets: Offset Market

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Institute of the Environment

The document discusses the offset market for developers and landowners. It describes different types of offset suppliers like conservation banks, brokers, and over-the-counter markets. It also discusses factors that determine market segmentation, like the level of standardization of offset rules and the certainty of demand. One example provided is an offset bank that was established through the purchase and protection of 15,000 hectares of land to provide offsets for urban development in Melbourne for 15 years.

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Third party supply of offsets – offset market Developers buyers Credit Register • Brokers • Banks • Over the counter sellers Conservation banks Create credits • landowner agreements • land surrender • upgrade protected areas Landowners
Like-for-like and offset supply Risk to supplier increases Different credit types Demand high and certain Aggregated offsets & banks Demand low and uncertain Bespoke trades thru’ brokers Like-for-like rules (including trading up) determine market segmentation: • Low segmentation → banks and landscape solutions • High segmentation → bespoke and individual site solutions
Market facilitation – Over The Counter Over The Counter - • a bank of credits available at price pre-set by the landowner • based on ‘trading up’ to higher biodiversity importance • offset specified in the permit condition • offset plan provided at time of purchase • walk in and buy - feels like ‘in lieu payment’
Endangered grasslands • Plains Grassland - Victorian Volcanic Plain
Offset bank & protected area • A 15,000 ha reserve through the purchase and surrender of freehold land • Will provide offsets for 15 years of urban development in Melbourne’s west • Designed via a Strategic Assessment Report of future impacts and offsets • Land designated under an acquisition overlay • Financed through a revolving fund, primed with government funding

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Third Party Supply of Offsets: Offset Market

  • 1. Third party supply of offsets – offset market Developers buyers Credit Register • Brokers • Banks • Over the counter sellers Conservation banks Create credits • landowner agreements • land surrender • upgrade protected areas Landowners
  • 2. Like-for-like and offset supply Risk to supplier increases Different credit types Demand high and certain Aggregated offsets & banks Demand low and uncertain Bespoke trades thru’ brokers Like-for-like rules (including trading up) determine market segmentation: • Low segmentation → banks and landscape solutions • High segmentation → bespoke and individual site solutions
  • 3. Market facilitation – Over The Counter Over The Counter - • a bank of credits available at price pre-set by the landowner • based on ‘trading up’ to higher biodiversity importance • offset specified in the permit condition • offset plan provided at time of purchase • walk in and buy - feels like ‘in lieu payment’
  • 5. Offset bank & protected area • A 15,000 ha reserve through the purchase and surrender of freehold land • Will provide offsets for 15 years of urban development in Melbourne’s west • Designed via a Strategic Assessment Report of future impacts and offsets • Land designated under an acquisition overlay • Financed through a revolving fund, primed with government funding