Environmental Offsets Reform: Key issues from the Queensland Discussion Paper

The Queensland Government has released its Discussion Paper, A fresh start for Queensland’s Environmental Offsets Framework (Discussion Paper), marking the most significant review of the State’s environmental offsets regime since the Environmental Offsets Act 2014 (Qld) (Offsets Act) commenced more than a decade ago.

The Discussion Paper signals a renewed focus on improving the effectiveness, transparency and delivery of environmental offsets in Queensland, particularly in light of persistent challenges associated with offset implementation and the growing accumulation of funds in the State’s Offset Account. With reform proposals spanning offset delivery, financial calculation methodologies and regulatory improvement, the Discussion Paper represents an important opportunity for stakeholders to help shape the next generation of Queensland’s offsets framework.

Overview of Queensland’s Environmental Offsets review

The Offsets Act seeks to counterbalance the significant residual impacts of particular activities on prescribed environmental matters through the use of environmental offsets. It does this by providing for the imposition of offset condition where an administering agency is satisfied that a prescribed activity will, or is likely to, have a significant residual impact on a prescribed environmental matter and all reasonable on-site mitigation measures for the prescribed activity have been, or will be, undertaken. The Offsets Act contemplates that an environmental offset may be delivered by way of proponent-driven offset, financial settlement offset or a combination of the two.

In terms of possible reform, the Discussion Paper includes three focus areas:

1. unlocking the Offset Account;
2. calculation of financial offsets; and
3. improvement to regulation.

The improvement to regulation focus area is accompanied by a detailed Appendix which HopgoodGanim Lawyers will discuss in an upcoming article. The Government is seeking feedback on the proposed ideas for each focus area, with consultation closing on 29 June 2026.

Unlocking the Offset Account

The Discussion Paper identifies that since the inception of the Offset Account (the fund used for financial settlement offsets) over 90 per cent of offset conditions have been fulfilled by way of financial settlement, with over $129.2 million received as financial settlement payment. However, the Government has experienced challenges in delivering offset projects using those funds (with a total of $14.2 million contracted to projects and $10.2 million spent of offset activities delivering conservation outcomes) and accumulation of funds in the Offset Account needs to be addressed. The challenges identified are the like-for-like offsets approach, in particular for large impact areas, the availability and cost of suitable land and landholder concerns associated with long-term legal security requirements.

The Discussion Paper canvasses the below ideas to address the identified challenges in relation to utilisation of the Offset Account:

Calculation of financial offsets

The Discussion Paper identifies a number of key issues in relation to the financial offset calculator:

• Outdated costs – a number of components, for example on-ground management and landholder incentive costs, have not been updated since the calculator’s establishment in 2014
• Sliding scale discounts – large offset areas receive significant cost reductions of up to 90 per cent, based on inaccurate assumptions of economies of scale, reducing funds available to offset delivery
• Distinct matter area discounts – where multiple environmental matters are bundled into one offset payment, often offset sites cannot meet the diverse ecological requirements of all matters, leading to increased costs and delivery delays
• Multipliers – multipliers used in the calculator are too small for some environmental matters
• Lack of contingency margins – no allowance is made for uncertainties such as natural disaster

The Commonwealth Government is currently developing its own financial calculator as part of its 2025 reforms to the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) framework. The Discussion Paper notes that aligning Queensland’s calculator with the Commonwealth’s could facilitate accreditation of Queensland’s framework streamlining implementation of Queensland offsets and reducing procedural delay for projects.

The Discussion Paper reflects the Government’s intention to modernise Queensland’s environmental offsets framework and address longstanding issues that have limited the delivery of timely and effective conservation outcomes. By examining the operation of the Offset Account, proposing updates to the financial calculator and signalling broader regulatory improvements, the Discussion Paper lays the groundwork for a more responsive and efficient system.

Stakeholder input will be critical to ensuring that any reforms strike the right balance between environmental protection, regulatory certainty and practical implementation. Consultation is now open, with submissions due by 29 June 2026, providing proponents, landholders and environmental practitioners a valuable opportunity to contribute to the future direction of Queensland’s offsets regime.

The Discussion Paper is available for review on the Queensland Government website.