As Australia moves towards achieving net zero by 2050, the construction and real estate industries (and their regulators) are looking beyond emissions from the operation and maintenance of their assets but also looking at reducing carbon emissions embodied in building materials and generated by the construction of buildings.
Existing and proposed policies addressing embodied carbon in Australia generally require embodied carbon emissions to be quantified only. The policies do not impose material obligations to reduce or offset these emissions. However, minimum embodied carbon standards are expected to be incorporated into the National Construction Code by 2028. These minimum standards are also likely to be implemented in Government procurement policies in the near future.
NABERS Tool
NABERS has recently unveiled a new emission factors database. The database will underpin the NABERS Embodied Carbon Rating Tool (NABERS Tool) when it is released later this year. The intent of the NABERS Tool is to facilitate the quantification of embodied carbon in new buildings and major refurbishments. While the NABERS Tool remains under development, it has received approval from the NABERS National Steering Committee and endorsement from all States and Territories in Australia. This means it is likely be implemented into State and Territory planning legislation in the near future as a national standard.
In New South Wales, the NABERS Tool will be given legislative effect under the State Environmental Planning Policy (Sustainable Buildings) 2022 (Sustainable Buildings SEPP). This SEPP prevents development consent being validly granted for non-residential development unless the consent authority is satisfied the embodied carbon emissions attributable to the development have been quantified.
The Sustainable Buildings SEPP also requires that a consent authority must be satisfied that the embodied emissions of residential development (including multi-dwelling residential development) have been quantified prior to granting development consent. For residential development, emissions must be measured under the BASIX tool, which uses emissions factors from the Environmental Performance in Construction database.
While the NABERS Tool remains under development, the Department of Planning, Housing and Industry has issued Planning Circular PS23-001, specifying interim arrangements for non-residential development applications made after 1 October 2023. The Planning Circular provides that until the NABERS Tool is released, the NABERS Embodied Emissions Materials Form can be used to satisfy the requirements in the Sustainable Buildings SEPP. This form requires high level quantification of embodied carbon in building materials only.
Once released, the NABERS Tool will be used to create benchmarks for embodied carbon from new buildings and major refurbishments. Further, the NABERS Tool is projected to be integrated with the Climate Active Carbon Neutral Buildings Standard in 2025. This is a voluntary standard which provides a guide on how to achieve carbon neutrality in the building sector for the purposes of obtaining Climate Active certification.
National Construction Code
While the NABERS Tool remains under development, Australian State and Commonwealth Building Ministers have agreed to include a voluntary pathway in the 2025 National Construction Code for commercial buildings to measure and report on embodied carbon using the NABERS Tool. The Ministers have also requested the Australian Building Codes Board to investigate how to incorporate and fund a future minimum standard for embodied carbon in the 2028 National Construction Code (using the NABERS Tool). There is little detail provided at this stage on what this will entail. We will update this alert once further detail is provided.
Public Sector Infrastructure Policies
Infrastructure NSW published its ‘Decarbonising Infrastructure Delivery Policy’ (Policy) earlier this year, which will apply to:
- projects over $50m for building sector projects, and
- $100m for all other infrastructure projects delivered by NSW Government infrastructure delivery agencies (excluding public non-financial corporations (including state owned corporations, public financial corporations and local government authorities).
The Policy will apply to all NSW Government projects which have their strategic business case initiated after 4 April 2025.
The Policy will require that NSW Government agencies need to (at a minimum) quantify embodied carbon from proposed projects in their business cases, during design and procurement, and at project completion. The Policy outlines the principles to be applied in the measurement, assessment and management of embodied carbon for infrastructure projects, and includes detailed technical guidance. The technical guidance proposes to adopt the NABERS Tool as a key input into calculating embodied carbon emissions, but also includes other data sources to appropriately capture embodied carbon emissions in major infrastructure projects.
The Policy does not explicitly require NSW Government agencies to adopt carbon reduction targets, but encourages them to do so where they have the capability. The Policy also seeks to upskill the ability of NSW government agencies to manage carbon emissions when making procurement decisions for major public sector infrastructure.
Critically, the technical guidance was adopted earlier this year by the Infrastructure and Transport Ministers’ Meeting as a national standard. The Ministers also provided in principle support for the use of a nationally consistent set of carbon values in the assessment of business cases for transport infrastructure projects over $100m, with an aspirational commencement date of 1 January 2025.
What does this mean?
Looking forward, Infrastructure Australia’s publication ‘Embodied Carbon Projections for Australian Infrastructure and Buildings’ reported that embodied carbon comprises approximately 10% of Australia’s national emissions, and identified multiple achievable and low cost mitigation opportunities for embodied carbon. While current initiatives relating to embodied carbon are at a relatively early stage, we can expect that embodied carbon will become a bigger part of the emissions reduction equation as we move towards net zero by 2050. We also anticipate that embodied carbon will become the subject of mandatory rules and regulations which will govern the selection of building materials and construction methods in the near future.
