Melbourne Considering Zero-Carbon Building Rules

Around 77 of the Melbourne CBD’s buildings would need to be “retrofitted” each year if the city is to meet its net-zero carbon emissions goals for 2040.

This finding is included in a paper proposing a number of initiatives that the City of Melbourne’s Future Melbourne Committee is due to consider at its meeting on Tuesday, October 4.

If endorsed, the proposals will then go to community consultation. 

The recommendations have been put together after several rounds of consulting with stakeholders including building owners, tenants and industry representatives. 

Only initiatives for existing and new commercial buildings are included as a separate consultation process is under way for residential buildings.

Around 66 per cent of Melbourne’s CBD emissions come from the construction and operation of its buildings—60 per cent from commercial buildings, 6 per cent from residential buildings. The city believes reducing this will be critical to it meetings its 2040 goals.

Melbourne currently has around 6.4 million sq m of total office floor space across 1517 commercial buildings, including office space in mixed-use projects. 

The paper defines zero-carbon buildings as those in which no additional carbon is emitted into the environment through the construction, operations and entire life of the building.

This will mean buildings need to be 5-star NABERS or higher energy rated, be all-electric and have an ongoing improvement plan to achieve absolute zero carbon after 2040, including embodied energy. 

“Decarbonising by retrofitting our buildings will contribute $2.7 billion to the Victorian economy over the next 18 years, provide 12,000 job years by 2040 and reduce energy costs by around $184 million per year,” the paper said.

“In addition to a 100 per cent renewable grid, this will set up Melbourne’s buildings to be healthy, low energy, resilient places to work, live and play.”

▲ Melbourne’s Council House was the first building in Australia to achieve a 6-star Green Star rating from the Green Building Council of Australia.

The paper estimates that 90 to 95 per cent of the buildings in operation in 2040 will be buildings already existing today so much of its focuses is on retrofitting existing buildings. However, initiatives geared towards new buildings being developed also feature. 

The paper recommends seven key initiatives to be implemented at the local government level. 

The first is the development of a zero carbon lease similar to the green leases now used by 94 per cent of building property owners during the past 18 years where an agreement is made to minimise the use of energy.

Another initiative is to develop a carbon risk tool for developers and owners to understand how close to zero carbon their properties are and how to make them more efficient.

The Commercial Building Disclosure is the third initiative and was already set to expand to cover more land uses and include periodic reporting on NABERS performance but was paused due to the pandemic.

The recommendation is to focus on the periodic reporting aspect as it starts up again.

The fourth recommendation is for the City of Melbourne to facilitate joint procurement of renewable energy and other services for building owners to harness economies of scale, particularly when retrofitting buildings so as to lessen costs and barriers for many owners. 

The paper also recommended adopting an initiative from Western Australia where the building owner sets up a team of experts including a dedicated planning officer from the City of Melbourne to create a plan on achieving net zero for a building during its operation. 

There is also a recommendation that the City of Melbourne ties rates to the NABERS performance of buildings and increases the rates accordingly for those that do not perform highly thereby encouraging retrofitting to occur. 

The last recommendation is to follow an EU example and set an emissions cap for buildings and to create penalties if those targets are not reached by a set date.

▲ The GPT Group announced in 2018 that it would aim to achieve net zero carbon emissions across its entire office portfolio by 2020 including the currently carbon neutral 8 Exhibition Street in Melbourne.

The paper also said that there were avenues for state and federal governments to help drive the move to zero carbon.

Key among these is creating planning reform through Amendment C736 and advocating for changes to the National Construction Code. 

Amendment C736 will introduce sustainable building design requirements to the Melbourne Planning Scheme and is currently with the state planning department prior to community consultation.

The paper also said the Victorian government could introduce land tax reform so that taxes were linked to how sustainable buildings were in their NABERS energy performance. It would not generate excess revenue for the state government but it would shift market perspectives significantly.

It also advocates that the federal government alter the Commercial Building Disclosure Act to reduce the floor area required to trigger disclosure to 500sq m and change from disclosure at point of sale or lease to regular, periodic reporting. 

This would allow for the tracking of building performance through operation and allow for the City of Melbourne to tie rates to building performance.

It also advocates the establishment of a national fund for commercial retrofitting of old buildings and that a new level of above Green Star 5 Star or similar be mandated in the national construction code for all new commercial buildings. 

The City of Sydney recently released its own plan to make buildings in the NSW capital more sustainable.