NSW's new biodiversity offsets scheme is likely to save developers such as coal miners millions of dollars, according to a leaked report commissioned by the Berejiklian government.
A cost benefit analysis by the Centre For International Economics, a copy of which was obtained by Fairfax Media, found Glencore's Mt Owen coal mine extension in the Hunter Valley would have reaped huge savings if the project had been assessed under the new methodology.
Using two methods to gauge the mine expansion's offset costs, the reforms to the scheme both show savings of "approximately $80 million" compared with existing compensation tally for "disturbing" an extra 485 hectares of native vegetation, the report found.
Similarly, the Dubbo Zirconia Project, a $1 billion venture due to "disturb" 815 hectares, would save the developers about $12.89 million because fewer offset credits would be needed.
The government's overhaul of native vegetation laws this year has raised concerns by environment groups that land clearing on private land has become easier.
The leaked report notes that almost 1000 flora and fauna species are at risk of extinction in NSW, with more than half the state's mammal species (including the yellow-footed rock-wallaby) and about a third of native birds (such as the flame robin) are threatened.
Miners wouldn't be the only winners from changes, with the report estimating developers of the M5 motorway in Sydney would have saved between $300,000 to $500,000 compared with the old formula, the report found.
Aside from the lower costs, the report notes the scheme will accelerate projects even if suitable offsets for vegetation destruction can't be found: "The option for developers to pay into the Biodiversity Conservation Fund (rather than finding their own offsets) could therefore potentially reduce delays."
"Greed trumps nature again under this government," said Kate Smolski, chief executive of the NSW Nature Conservation Council, in response to the report's release.
"The offsets package pushes endangered wildlife closer to extinction while handing mining companies and developers millions of dollars in savings."
Environment Minister Gabrielle Upton did not dispute the report's findings but said the outcome of the new biodiversity assessment method will be different for different developments.
"The biodiversity assessment method is scientifically rigorous and meets a no net-loss standard," Ms Upton said.
The assessment did identify case studies where offset costs would have been higher, such as the Emerald Hills project to rezone rural land near Camden for 1200 new homes. Those costs would have risen $1 million to $1.8 million, it said.
Still, the report said it was "difficult to accurately estimate the impacts at a statewide level".
Penny Sharpe, Labor's environment spokeswoman, said there was mounting evidence that offsets are "leading to poor environmental outcomes" while allowing developers to save large sums of money.
"Labor believes there is a place for biodiversity offsetting, but only when underpinned by science and a commitment to improve or maintain environmental outcomes," Ms Sharpe said. "This is what is sadly lacking under the current system."
Mehreen Faruqi, the Greens environment spokeswoman, said it was "deeply distressing to see Gladys Berejiklian and her government knowingly trash the environment for their mates in mining and property development".
"It's pretty clear that the only rationale for the biodiversity offsets policy was to roll out the red carpet for developers, not to protect the natural environment." Dr Faruqi said.
"It is a policy dreamt up by mining lobbyists, which is why the community, environmentalists, scientists and ecologists are all up in arms about this terrible policy."
A spokesman for Glencore said its Mt Owen has used the offsets methodology applicable at the time of the project's approval.
"The credits and offsetting costs shown in the [report] are clearly part of a hypothetical exercise using the Mt Owen project to test the new State biodiversity methodology," the spokesman said.
"As such, they do not in any way represent actual biodiversity offsetting outcomes for the Mt Owen extension project or savings to Glencore."