The Clean Energy Finance Corporation has launched a $300-million Timber Building Program that puts the use of timber front and centre in the effort to reduce embodied carbon in the commercial and residential sectors.
The CEFC Timber Building Program will use tailored debt financing to support mass timber construction across Australia and deliver emissions savings in the sectors.
As the first debt program to focus on lower carbon timber construction, the CEFC Timber Building Program seeks to “use finance to help developers commit to timber buildings,” Ryan Rathborne, CEFC director of property, said.
“We want to work with developers who choose to reduce embodied carbon through the use of engineered wood products over traditional construction materials such as concrete and steel,” Rathborne said.
Property construction and materials are responsible for approximately 11 per cent of global energy-related carbon emissions.
The 2021 CEFC report Australian buildings and infrastructure: Opportunities for cutting embodied carbon, identified the potential for the building sector to significantly cut emissions—in some instances by up to 75 per cent through using timber over conventional concrete and steel counterparts on per square meter basis.
“We are at the beginning of the journey on embodied carbon,” Rathborne said.
“Interest is growing rapidly among both the development and investment communities as the role of the property industry to support other industries by investing in low carbon materials in the supply chain gains recognition.”
Technical advances in cross laminate and glue laminate timber have made using engineered timber in construction an effective way at significantly cutting embodied carbon emissions.
The ability to sequester carbon in timber materials provides it with a negative carbon footprint which can offset other emissions, meaning construction has an overall lower emissions profile.
With a range of interest areas spanning ommercial and multi-residential development, the program aims to ramp up mass timber construction in large-scale construction throughout the nation.
“We are generally looking for projects that require between $20 million and $75 million in debt finance that will use low carbon engineered wood products as well as appropriately sourced and accredited timber materials to improve embodied carbon outcomes,” Rathborne said.
“We are interested in projects across the office, retail, industrial, healthcare and education sectors. We are also exploring multi-residential apartments, retirement living, aged care facilities as well as hotel and student accommodation developments.
“The CEFC has an extensive investment track record in each of these sectors and we are excited to have the opportunity to support innovation in construction to reduce emissions and deliver high quality projects.”
Supporting mass timber construction in new projects also helps develop local skills and experience as well as further establish supply chains and delivery capabilities to build up networks to create more opportunities for timber-based building activity in the future.
“The CEFC was established to lead the market and invest with commercial rigour to address some of the toughest emissions challenges in rapidly changing times,” Rathborne said.
“Working with businesses, institutional investors and innovative entrepreneurs to accelerate Australia’s transition to a low emissions economy, the CEFC has committed approximately $2 billion in debt and equity property investments.”
Rathborne said the CEFC has long worked to invest in market gaps and demonstration projects to showcase new and existing clean energy technologies and investment approaches.
The Timber Building Program continues this approach.
“Focusing on embodied carbon will drive demand for more sustainable materials which is a critical step towards the net zero emissions challenge,” he said.
Main image: Lendlease
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