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Environmental offsetting involves compensating for the residual adverse impacts of an action on the environment by generating an equivalent benefit elsewhere. As the prevalence of environmental offsetting grows, so does the challenge of translating no-net-loss goals to workable policy. From 2011–2012, the Australian Government developed an Environmental Offsets Policy and an accompanying metric (the Offsets Assessment Guide) to support decision making about offset requirements under the Environment Protection and Biodiversity Conservation Act 1999. Through extensive stakeholder consultation and in collaboration with academic researchers, the Guide was developed with the aim of accounting appropriately for ecological equivalence in a transparent and flexible manner. This paper outlines the Australian Government's environmental offset policy development process, and describes the approach adopted for evaluating the suitability of proposed offsets in meeting the policy goals. The Guide explicitly estimates the extent to which an offset will improve the target biota and/or avert future losses, the degree of confidence that the offset will be implemented successfully, and the time it will take to deliver a conservation benefit. Since implementation of the Environmental Offsets Policy and the Guide, there has been a shift in focus from estimating offset requirements based on simplistic area ratios, toward directly evaluating the components of an offset action that determine its environmental performance. Achieving a balance between scientific robustness and policy workability is an ongoing challenge. The Environmental Offsets Policy and Guide represent an important step towards consistency and transparency in environmental offset decision-making.

Environmental offsetting involves compensating for the residual adverse impacts of an action on the environment by generating an equivalent benefit elsewhere. As the prevalence of environmental offsetting grows, so does the challenge of translating no-net-loss goals to workable policy. From 2011–2012, the Australian Government developed an Environmental Offsets Policy and an accompanying metric (the Offsets Assessment Guide) to support decision making about offset requirements under the Environment Protection and Biodiversity Conservation Act 1999. Through extensive stakeholder consultation and in collaboration with academic researchers, the Guide was developed with the aim of accounting appropriately for ecological equivalence in a transparent and flexible manner. This paper outlines the Australian Government's environmental offset policy development process, and describes the approach adopted for evaluating the suitability of proposed offsets in meeting the policy goals. The Guide explicitly estimates the extent to which an offset will improve the target biota and/or avert future losses, the degree of confidence that the offset will be implemented successfully, and the time it will take to deliver a conservation benefit. Since implementation of the Environmental Offsets Policy and the Guide, there has been a shift in focus from estimating offset requirements based on simplistic area ratios, toward directly evaluating the components of an offset action that determine its environmental performance. Achieving a balance between scientific robustness and policy workability is an ongoing challenge. The Environmental Offsets Policy and Guide represent an important step towards consistency and transparency in environmental offset decision-making.