From Potential to Practice: Scaling Australia’s Nature Repair Market

Paris Capell, AgriFutures Australia, 2025 World Food Forum

Executive Summary

The past two decades of Australian environmental policy have focused on environmental markets to incentivise conservation and carbon abatement on private land. The latest iteration of this policy mechanism is the Nature Repair Act 2023 (NRA), Australia’s first voluntary biodiversity market which allows landholders to register projects and be rewarded for action with tradeable Biodiversity Certificates. 

Despite its promise, the Nature Repair Market has seen limited adoption due to critical design flaws (Denniss, 2023). Current methodologies restrict a project's eligibility to a narrow subset of land and activities, which limits supply. There is also no clear mechanism or incentive for investors to purchase Biodiversity Certificates or pricing transparency. The market’s structure, offering only a single certificate over a 25 or 100 year project lifespan, undermines financial viability for proponents and deters participation. 

To avoid policy failure and scale participation in the Nature Repair Market, this proposal recommends that the Commonwealth commit to purchasing Biodiversity Certificates under Part 6 of the NRA. This action would increase market confidence, enhance the financial viability of nature repair projects and attract private sector engagement. By improving market dynamics, the Commonwealth can help unlock investment and deliver measurable biodiversity outcomes at scale.

Problem Identification

Environmental markets have been heralded as a silver bullet policy framework to incentivise ecological stewardship on farms. While investment in nature by agricultural businesses can boost productivity and deliver broad societal benefits, it can also impose substantial costs on landholders. The estimated cost to repair Australia’s land degradation is $7.3 billion per annum over 30 years, or 0.3% of GDP (Wentworth Group of Concerned Scientists, 2024). To facilitate this investment, the Federal Government established the Nature Repair Market through the Nature Repair Act 2023 (NRA).

However, adoption of the Nature Repair Market remains low due to poor market design of issuing and valuing biodiversity certificates. Since the market opened in March 2025, only one project has been registered (Department of Climate Change, Energy, the Environment and Water (DCCEEW), 2025d). Poor market design has been cited as a fundamental flaw as it is unclear where the demand for biodiversity certificates will come from, or how much they will be worth (Hemming, 2023). Without a functioning market, nature repair will remain underfunded and fragmented which will impact Australia’s capacity to meet its biodiversity commitments. The options presented in this policy paper seek to resolve critical environmental market design flaws in the Nature Repair Market. 

Context

Payment for ecosystem services Payment for ecosystem services is a policy mechanism whereby landholders receive financial compensation for delivering measurable environmental benefits such as water quality improvement, habitat protection or carbon sequestration (Salzman, 2018). Key stakeholders include farmers, First Nations groups, state and federal government, philanthropists and private businesses. In Australia, examples of payments for ecosystem services include the Australian Carbon Market through the Emissions Reduction Fund, the Nature Repair Market, Reef Credits in Queensland and water trading in the Murray-Darling Basin (Sangha, 2024).

Who will invest? Voluntary vs involuntary biodiversity markets

Biodiversity markets are a specific type of payment for ecosystem services which create tradable credits that represent conservation outcomes. Voluntary biodiversity markets allow private entities to purchase biodiversity credits or certificates without regulatory obligation. These represent measurable actions that protect, restore or enhance biodiversity. Participation is voluntary for both suppliers and buyers, often driven by sustainability goals or Environmental, Social and Governance (ESG) reporting. Key corporate initiatives aimed at increasing voluntary demand include the Taskforce on Nature-related Financial Disclosures (TNFD), the Australian Sustainable Finance Taxonomy, and the Science Based Targets Initiative. These form part of the policy ecosystem supporting landholder participation and private investment. Otherwise, there is little demand for voluntary biodiversity markets. 

In contrast, involuntary biodiversity markets arise from legal or policy requirements, often referred to as compliance or regulatory markets. Participants must offset or compensate for negative biodiversity impacts by purchasing credits or certificates (“no-net-loss”). This creates mandatory demand for the market. However, reviews of involuntary biodiversity markets in Australia have found they have not achieved true no-net-loss, and there is evidence to suggest ongoing biodiversity declines even where offsets were applied (Maron et al 2016, Lindenmayer et al 2017). Biodiversity market demand could be increased if involuntary markets had to deliver net-positive nature repair, rather than offset net-loss. 

Roe Enhancement Case Study

Roe enhancement offers a potential solution to the low market value of urchins from barren reefs, where roe condition is generally poorer than in kelp forests due to reduced food availability (FAO 2022). The technique involves transferring low-value urchins into aquaculture systems, where they are fed high-quality diets for six to twelve weeks to improve gonad size and quality (FAO 2022). Developed in Japan, this approach is now being trialled in Australia. Deakin University’s AquaFI Lab has undertaken experimental conditioning, while Urchinomics and IMAS have attracted investor interest in similar models (AgriFutures 2021; Urchinomics 2017). Although there are currently no commercial sea urchin aquaculture ventures in Australia, research identifies Helio from Port Phillip Bay as a promising candidate for roe enhancement, provided regulatory barriers are addressed (AgriFutures 2021).

Victorian Context

Victoria’s sea urchin fishery remains underdeveloped despite strong potential to expand. PPB contains extensive barren reef areas and high densities of Helio, particularly in the southern and central zones (Graham, 2023). With Helio’s higher marketability than Centro and suitability for roe enhancement, Victoria is well placed to link ecological restoration with commercial opportunity. Restoring these reefs could generate a net benefit of $13.4 million, with a benefit–cost ratio of 1.10 (Cresswell et al., 2025). However, existing management frameworks constrain this potential.

The Victorian Sea Urchin Fishery (VSUF) has operated since 1985, transitioning from experimental permits to a licensed fishery in 2014. It is managed under the Fisheries Act 1995 (Vic) and Fisheries Regulations 2019 (SR No. 163/2019), which authorise the take of urchins “by hand for sale” through Sea Urchin Access Licences. Management is guided by the Sea Urchin Fishery Baseline Management Arrangements, currently under review to transition into a formal management plan. Licences are uncapped, but quota allocations are limited and held by existing operators, preventing new entrants. Each licence is linked to individual transferable quotas (ITQs), which operate as tradable assets. When Centro was removed from quota management in 2024, industry pushback highlighted the sensitivity of reform, as ITQs represent significant financial investments (VSUDA 2024).

A stock assessment in 2002 established a Total Allowable Commercial Catch (TACC) of 40 tonnes for Helio across four management zones to support the development of a commercial fishery (Worthington & Blount, 2003). The quota was based on extrapolated biomass estimates and assumed that urchins from barrens were unsuitable for harvest due to poor condition. However, new research estimates standing biomass in PPB at around 9,700 tonnes (Graham, 2023; Young et al., unpublished). Despite this, annual harvest remains low at 25-40 tonnes, less than 0.5% of the estimated stock. The exclusion of barren urchins creates a structural disincentive to target degraded areas.

Regulatory fragmentation also limits integration between wild harvest and aquaculture. While Section 49(2) of the Fisheries Act 1995 (Vic) permits aquaculture operations, current regulations do not explicitly allow the take and translocation of wild urchins under a Sea Urchin Access Licence into aquaculture systems. This gap prevents Victoria from adopting international models, such as those in Japan, where barren removals are linked to aquaculture conditioning (FAO 2022).

Reducing Helio densities below 4/m² supports kelp recovery and improves roe quality, showing that restoration and commercial value can reinforce each other (Blount et al. 2017; Miller et al. 2024). The policy challenge for Victoria is not whether harvest can aid restoration, but how to integrate barren access, quota reform, and aquaculture innovation into a framework that promotes both ecological recovery and industry resilience.

Policy Options

Policy Option 1: The Minister for Environment and Water makes new methodology determinations under Part 4 of the Nature Repair Act (2023) that broadens scope beyond vegetation.

For the Nature Repair Market to succeed, all regions in Australia need equitable access to methodologies and investment. The Minister for Environment and Water should introduce new methodologies that support environments beyond forests and woodlands, including nature repair in rangelands, deserts and riparian areas. Currently, only 23% of Australia’s land is eligible under the Replanting Native Forest and Woodland Ecosystems methodology, which severely limits market participation (DCCEEW, 2025). Future methodologies need to look beyond tree planting and recognise other nature repair methods; including landscape rehydration, species reintroduction, and feral pest and weed management to fund nature repair across Australia’s diverse landscapes. 

Expanding methodologies would increase the hectares registered in the Nature Repair Market, which currently stands at just 438 hectares (0.00005% of Australia) (DCCEEW 2025d). Methodology determinations that suit a variety of Australia’s ecosystems are critical for scaling the Nature Repair Market and contributing to Australia’s conservation targets. For an environmental market to function, there needs to be supply and demand. Without expanding Nature Repair methodologies beyond vegetation to other natural assets, there is unlikely to be market supply and participation. 

This policy option would not require significant funding, because methodologies are developed through DCCEEW internally and approved by the Nature Repair Committee. Additional funding for public consultation and initial design is estimated to be $600,000. The ongoing governance of the methodologies would be managed by the Clean Energy Regulator which oversees Nature Repair projects. 

Policy Option 2: Fund “Part 6 - Purchase of biodiversity certificates by the Commonwealth” in the Nature Repair Act 2023

The Australian Government can operationalise Part 6 of the NRA, which enables the Commonwealth to directly purchase Biodiversity Certificates for eligible projects. There is currently no funding to support this part of the Act, which is creating market uncertainty. Funding Part 6 would establish a public voluntary market, similar to the early phase of the Australian carbon market, helping set price signals, stimulate early participation, and demonstrate government leadership in biodiversity repair (Vatn, 2015).

The key success measure is increasing registered Nature Repair Market projects, as there is currently only one (DCCEEW, 2025d). The funding of this policy would come from DCCEEW and would be managed by the Clean Energy Regulator through a similar model to the Emissions Reduction Fund. Table 1 provides an example of Nature Repair Projects contributing 1% to Australia’s conservation targets, at an estimated cost of $2.98 billion over 25 years (Table 1). Creating demand for biodiversity certificates through Commonwealth demand is critical for establishing the Nature Repair Market and market dynamics.

Average cost to restore Australia’s terrestrial ecosystems (Mappin et al 2022)	1% of Australia’s land	Total fund needed
$153/ha/year	780,000 hectares	$1.19 million per year $2.98 billion over 25 years

Table 1: Predicted cost funding Part 6, assuming average cost of nature repair and 1% of Australia under Nature Repair Projects

Policy Option 3: Introduce a Safeguard Mechanism for biodiversity certificates through the nature positive reforms of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) 

To increase market demand, the Minister for Environment and Water should make the Nature Repair Market partly involuntary. Drawing from the Australian carbon market’s Safeguard Mechanism, where major greenhouse gas emitters must reduce their emissions and purchase carbon credits, the Nature Repair Market could require offsetting to include the purchase of additional net-positive biodiversity certificates. A Safeguard Mechanism for biodiversity could be introduced under the nature positive reforms of the EPBC Act and would increase demand and investment in the market. 

The Nature Repair Market is currently designed as a private voluntary market, relying on businesses, philanthropists and other non-government actors to buy certificates to meet their social license in marketing objectives. While private sector participation is crucial in the long term, voluntary markets require strong foundations including price discovery, liquidity and confidence in demand, none of which can be guaranteed in an immature market. Introducing an involuntary component of the Nature Repair market will ensure long term demand of investors, which will have net-positive outcomes compared to the failure of no net loss in previous schemes (Maron, 2016).

The biodiversity safeguard mechanism would be managed by DCCEEW, and success would be an increase in market buys and volume of certificates sold. Development of the mechanism would be relatively low cost as the current government evaluates further environmental reforms.  Introducing an involuntary component of the Nature Repair Market will ensure long term demand of investors and produce nature positive outcomes (Maron, 2016).

Policy Recommendation

Policy Option 2: ‘ Fund “Part 6 - Purchase of biodiversity certificates by the Commonwealth” in the Nature Repair Act 2023” is recommended as the most effective policy option for increasing the scale of the Nature Repair Market and providing buyer and investor confidence in the scheme. This is pivotal to establishing a robust and trustworthy Nature Repair Market that incentivises biodiversity restoration and supports Australia’s conservation goals. Without government intervention, the current voluntary market faces significant demand uncertainty and risks policy failure. 

Policy Option 2 is recommended over the other two policy options because it is the most likely to increase market participation and scale. While Policy Option 1 provides important new methodologies, it is also likely to fail without a functioning biodiversity certificate market. Policy Option 3 is important for generating long term demand, but another review of the EBPC Act could take too long to prevent the failure of the Nature Repair Market.

Part 6 of the NRA anticipates the need for government to set market dynamics, enabling the Commonwealth to act as a buyer of Biodiversity Certificates. However, the provision remains unfunded and unused. Without government participation, the Nature Repair Market risks stagnation due to insufficient demand, low certificate prices, and lack of confidence from landholders and investors. The government has an opportunity to accelerate project registration for land managers including farmers, increase private sector confidence in the viability of the market, and demonstrate international leadership in nature repair. Importantly, Commonwealth purchases would contribute directly to Australia’s 30 by 30 target.

To initiate and sustain market momentum, funding should be guaranteed over 25 years (the shortest project length) to try and scale the market and meet other federal conservation goals. This time allows for meaningful market development, robust project uptake and progress towards national biodiversity goals. Long-term funding of $2.98 billion (based on restoring 1% of Australia’s land) over 25 years would generate impactful ecological returns and stimulate ongoing private investment. To ensure equitable access to the Nature Repair Market and reduce land use competition, Commonwealth purchase of Biodiversity Certificates should be capped at 30% of the area of each agroecological region. Key stakeholders include:

• Natural Resource Management Regions Australia: There are 52 NRM regions across Australia that will help to facilitate the Nature Repair Market

• Landcare and Environmental NGOs: Provide on ground extension and support for Nature Repair Market Activities

• Private sector and philanthropists: Potential investors seeking environmental credentials and sustainable partnerships

• Policy and regulatory bodies: DCCEEW and the Clean Energy Regulator are responsible for delivery and oversight, with local state and territory agencies assisting in land use planning and other regulatory approvals.

  
  

Operationalising Part 6 of the NRA is a strategic investment in Australia’s natural capital that will increase registered nature repair projects, establish market dynamics and increase investor confidence. By entering the market as a foundational buyer, the Commonwealth can transform a promising but fragile scheme into a credible and functioning Nature Repair Market. The Nature Repair Market is worthy of both public and private investment and partnership to accelerate scale and participation. It echoes Australia’s mature carbon markets and provides a world-first blueprint for a government regulated voluntary biodiversity market. In doing so, it strengthens environmental outcomes while building economic resilience and regional opportunity. 

Risks

Economic Risk There is a risk that if Biodiversity Certificates are purchased by the Commonwealth at a high price there could be negative local economic impacts. If Nature Repair has a better financial return than farming there is a risk that it could compete with agriculture and create land use conflicts. This could have detrimental local economic impacts if local farm hands and businesses lose work and move away. Some carbon farming regions have seen similar impacts (Baumber, 2020). It could also have ramifications for national and regional food security if nature repair competes with agricultural land. Commonwealth purchase of biodiversity certificates needs to be capped at 30% of the area of each agroecological region to avoid these perverse outcomes and ensure equitable access for other buyers in the market. 

Environmental Risk Investment in the nature repair market is long-term and has the potential for positive environmental outcomes at scale. However, investment in nature repair projects is also exposed to climate change. Changing temperatures and rainfall patterns are likely to have an impact on project viability, as severe flood or drought could reverse nature repair projects and put the associated biodiversity certificate at risk. The Commonwealth could be fiscally at risk if it heavily invests in biodiversity certificates that are impacted by climate change events (e.g. biodiverse tree plantings that fail because of long term changes in rainfall), which could raise integrity issues and bring the market into disrepute. Climate change risk including sea level rise, temperature change and rainfall variability should be considered when purchasing biodiversity certificates through the reverse auction or tender process to ensure long term tangible biodiversity outcomes.

References

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Baumber, A., Waters, C., Cross, R., Metternicht, G., & Simpson, M. (2020). Carbon farming for resilient rangelands: people, paddocks and policy. The Rangeland Journal, 42(5), 293-307.

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Denniss, R. (2023) Exposing the flaws of ‘Green Wall Street’. The Australia Institute. https://australiainstitute.org.au/about/exposing-the-flaws-of-green-wall-street/ 

Department of Agriculture, Fisheries and Forestry (2025). Agriculture and Land Sector Plan. Canberra. https://www.agriculture.gov.au/sites/default/files/documents/agriculture-and-land-sector-plan.pdf 

Department of Climate Change, Energy, the Environment and Water (2022, December). Nature Positive Plan: better for the environment, better for business. https://www.dcceew.gov.au/sites/default/files/documents/nature-positive-plan.pdf 

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Department of Climate Change, Energy, the Environment and Water (2025c, August 12). Biodiversity certificates 

https://cer.gov.au/markets/biodiversity-certificates 

Department of Climate Change, Energy, the Environment and Water (2025d, August 13). Nature Repair Market is open for business [Media Release] https://minister.dcceew.gov.au/watt/media-releases/nature-repair-market-open-business 

Department of Climate Change, Energy, the Environment and Water (2025e, August 18). Methods for the Nature Repair Market. 

https://www.dcceew.gov.au/environment/environmental-markets/nature-repair-market/methods-for-the-nature-repair-market 

Hemming, P. & Campbell, R. (2023). Beyond repair? Comment on the Draft Nature Repair Market Bill (2023). The Australia Institute. https://australiainstitute.org.au/wp-content/uploads/2023/03/P1356-Beyond-Repair.pdf 

Lindenmayer, D. B., Crane, M., Evans, M. C., Maron, M., Gibbons, P., Bekessy, S., & Blanchard, W. (2017). The anatomy of a failed offset. Biological conservation, 210, 286-292.

Macintosh, A., Evans, M. C., Butler, D., Larraondo, P., Edirisinghe, C., Hunter, K. B., & Lindenmayer, D. (2024). Non-compliance and under-performance in Australian human-induced regeneration projects. The Rangeland Journal, 46(5)

Mappin, B., Ward, A., Hughes, L., Watson, J. E., Cosier, P., & Possingham, H. P. (2022). The costs and benefits of restoring a continent's terrestrial ecosystems. Journal of Applied Ecology, 59(2), 408-419.

Maron, M., Ives, C. D., Kujala, H., Bull, J. W., Maseyk, F. J., Bekessy, S., & Evans, M. C. (2016). Taming a wicked problem: resolving controversies in biodiversity offsetting. BioScience, 66(6), 489-498.

Salzman, J., Bennett, G., Carroll, N., Goldstein, A., & Jenkins, M. (2018). The global status and trends of Payments for Ecosystem Services. Nature Sustainability, 1(3), 136-144.

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