Proposed Restoration Contribution Charges: How They Compare with Private Offsets
The Department of Climate Change, Energy, the Environment and Water (DCCEEW) has released its proposed method for calculating restoration contribution charges under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). The method will sit behind a web-based Restoration Contributions Calculator. Submissions close on Wednesday 14 October 2026.
A restoration contribution is a payment, made as a condition of approval, that compensates for residual significant impacts on protected matters. A new statutory officeholder, the Restoration Contributions Holder (RCH), uses the funds to deliver restoration. Once the contribution is paid, the proponent’s compensation liability is acquitted. The option can be used instead of, or alongside, a proponent-led offset.
How the charge is determined
The proponent enters four things: the protected matter, the location, the impact area and a habitat quality score out of 100. The calculator converts these into a restoration obligation, measured in quality-adjusted hectares, using standard assumptions about how much a restoration site can improve, how long it takes and how confident that improvement is.
The charge then adds:
- restoration, monitoring and maintenance costs, with a 10% management reserve
- search costs to find a site, and access costs for land and agreements
- an administration charge of 10%
- a reversal risk contingency for loss from fire, drought or flood over 40 years, set at a 90% confidence level. For a moderate-risk location this adds 49%, and the paper states it will not be returned if no reversal event occurs.
DCCEEW’s Case Study 1 is 6 hectares of moderate-quality (59%) koala habitat in South East Queensland. It produces a 31-hectare obligation and a charge of $3,055,643. The paper describes its case studies as illustrative only.
Why the system matters for proponents
I see the restoration contributions system as a credible way to achieve landscape-scale outcomes, and a real opportunity to streamline the EPBC Act pathway. The largest gain is in who carries the information burden. The proponent supplies only impact-site inputs. Finding a site, assessing its condition, securing tenure and planning its management move to the RCH. In my experience those tasks can add 9 to 12 months to resolving a referral. Payment also acquits the liability, so delivery, monitoring and reporting obligations no longer run with the approval holder for the life of the approval.
Smaller projects stand to gain most, and most of the time and cost in their referrals goes into negotiating offsets. But the option only works if its price is competitive with the private market.
How it compares with a private offset
We tested the method against a recent small residential matter in South East Queensland: 9 hectares of koala habitat at a quality score of 40%. The regulator required a 32.25-hectare offset. It was delivered through a private offset provider for $1,128,750, or $35,000 per hectare of offset.
Case Study 1 works out at about $98,600 per hectare of restoration obligation. Its delivery component alone, before administration and contingency, is $60,139 per hectare: 1.7 times the private offset’s all-in price.
Applying Case Study 1’s unit costs to our matter gives:
Basis | Estimated charge | Compared with the private offset |
Private offset provider (actual) | $1,128,750 | — |
Calculator sets the 32.25-hectare obligation the regulator required | $3.17 million | 2.8 times |
These are our estimates, not calculator outputs. The calculator is not yet available, and land costs and reversal risk vary by location. The paper’s own assumptions produce an obligation consistent with the one the regulator actually set.
Faced with a private quote at roughly a third of the charge, most proponents will choose the private offset and the negotiation that comes with it. If the many small projects in South East Queensland choose that, the pooling the system depends on will not happen.
How the price could come down
I suggest three changes.
Competitive procurement through regional delivery boards. Boards drawing on industry, conservation organisations, the National EPA, DCCEEW and, where relevant, state agencies and First Nations representatives could package restoration works within a bioregion and tender them. The market would then set delivery cost, and the annual calculator update would rest on transacted prices. The framework already allows for this: search costs cover engaging delivery partners, and management plans must identify third-party deliverers.
Averted loss as an eligible outcome. Because the obligation is based on assumed quality improvement over 20 years, the better the impacted habitat, the larger the obligation. Case Study 2 turns a 29-hectare impact at 72% quality into obligations of 266 and 216 hectares, against 31 hectares from 6 in Case Study 1. Protecting and securely managing intact, at-threat habitat delivers benefit immediately, at lower delivery and reversal cost. It does not fit neatly into a net-gain currency, but I think it should be in the mix as an option.
A lower, pooled contingency. In Case Study 1 the $1,004,876 contingency exceeds the $639,650 cost of the restoration works. Both case studies apply the same 49% despite very different bioregions and fire regimes. I would hold contingency as a pooled reserve, report unspent balances annually and recalibrate it at the two-year review. It is probable that the starting contingency margin is overly conservative.
What it means environmentally
The reforms respond to the Samuel Review finding that many offsets were poorly designed, implemented or monitored. The method funds delivery, monitoring and maintenance over the life of the obligation. Under Paper 3 of the current Tranche 3 consultation, the RCH must start restoration within three years, maintain it for at least 25 years or until durable, and publish management plans and annual reports. In my view that accountability is what will give confidence that contributions become on-ground outcomes.
The trade-off is timing. The case studies assume restoration starts two years after payment, and Paper 3 accepts that an action starting before the impact “will not always be possible”. Again of note is that the landscape-scale benefit depends on enough projects paying in.
What is unresolved
- Which matters are covered. The system will start with a subset of threatened species and ecological communities, set by a ministerial declaration to be consulted on later in 2026. Koala is a case study, not confirmed. We anticipate that if koala is covered that grey-headed flying fox would be also (they tend to trigger together). Other commonly encountered themes in Southeast Queensland include glossy black cockatoo and greater glider yet we would not expect these to be entirely coupled with a koala offset.
- How inputs become an obligation. The paper does not publish the full calculation, and its koala table gives a 30-point quality improvement where its own figures give 20.
- The charge itself. Charging regulations will be consulted on later in 2026. The paper also says significant changes to the method may not be considered for the initial version
Making a submission
The discussion paper and survey are on the DCCEEW consultation page. You can complete the survey or upload a submission. Submissions close on Wednesday 14 October 2026; to be safe, allow for 10.59pm Queensland time. Late submissions will not be accepted.
We are working through the method now. If you would like to discuss what it may mean for your offset strategy, please get in touch.
This article is general commentary on a public consultation. It is not legal advice or advice on any particular project.