EPBC Act environmental offsets policy: like-for-like, direct and indirect offsets

Policy framework

The EPBC Act Environmental Offsets Policy (2012) provides guidance on how the Commonwealth applies offset conditions to approvals under the EPBC Act overview. This policy addresses impacts on Matters of National Environmental Significance (MNES) where residual significant impacts remain after attempts to avoid or mitigate them.

The policy mandates the application of a mitigation hierarchy: avoid, mitigate, and then offset. This prioritises actions to prevent impacts before considering offsets as a final measure. Offsets are commonly implemented as conditions attached to an approval issued under section 134 of the EPBC Act.

An Offsets Assessment Guide is available to support proponents and decision-makers in determining the appropriate scale of offsets required for listed species and communities.

Like-for-like principle

Offsets under the *Environment Protection and Biodiversity Conservation Act* EPBC Act overview must adhere to a like-for-like principle. This means that offsets must directly relate to the Matters of National Environmental Significance (MNES) affected by a proposed action. For example, if a project significantly impacts koalas, the offset must provide a benefit for koalas. Offsetting one MNES with another is not permitted.

The principle also requires that offsets are proportionate to the level of statutory protection and the conservation status of the impacted matter. This ensures the offset addresses the significance of the impact.

Crucially, offsets must deliver a 'conservation gain' for the impacted protected matter relative to a counter-factual – meaning the offset must improve the conservation outcome beyond what would have occurred naturally or through existing obligations. Offsets must also be in addition to, and not double-count, other conservation measures already required by law.

Direct vs indirect offsets

Direct offsets are the primary component of an offset package under the *Environment Protection and Biodiversity Conservation* Act. These actions provide an on-ground benefit to the protected matter being impacted, for example, through land protection or habitat restoration. At least 90% of an offset package must consist of direct offsets. EPBC Act overview

Indirect offsets, also known as ‘other compensatory measures’, represent a smaller portion of offset packages. These may include activities such as research programmes, education initiatives, or species recovery work. The maximum proportion of an offset package that can be comprised of indirect offsets is 10%.

While the standard approach is a 90:10 split between direct and indirect offsets, this ratio can be adjusted. This variation is permissible where it can be demonstrated that a higher proportion of indirect measures would deliver a greater benefit to the protected matter. Advanced offsets, undertaken before impacts occur, are encouraged to help achieve these outcomes, as outlined in guidance from the Department of Climate Change, Energy, Environment and Water. Offsets are calculated using the Offsets Assessment Guide to ensure quantum equivalence with residual impacts.

Offsets management plans

Offsets are typically secured through an Offsets Management Plan (OMP) submitted to DCCEEW for approval. These plans outline how environmental offsets will be delivered and managed. EPBC Act overview

OMPs must detail key elements including the offset site, the conservation actions to be undertaken, the criteria that must be met for the offset to be considered complete, and the arrangements for monitoring and reporting on offset performance. Offset sites must be legally secured for at least the duration of the impact – usually in perpetuity for permanent impacts.

Annual compliance reports against approval conditions are required, and DCCEEW retains the ability to audit performance. The Government is progressing EPBC Act reform via proposed National Environmental Standards which will update offsets and restoration requirements.