CBD program looks set to be extended to smaller offices

Brisbane
Brisbane

An independent review of the Commercial Building Disclosure program has recommended reducing the size threshold at which offices are obliged to participate, from 2000 square metres down to 1000 sq m.

The news has been welcomed by industry, which sees it as a way to motivate the notoriously difficult mid-tier office market in improving sustainability outcomes.

The CBD program currently compels offices over 2000 sq m to disclosure building energy efficiency at the point of sale, lease or sublease, and has been credited as helping drive sustainability improvements in the Australian office market, particularly at the top end.

The independent review by ACIL Allen found that reducing the participation threshold to 1000 sq m would have net benefits of $24 million cumulatively, and save 707,000 tonnes of CO2 between 2015 and 2028. The change would see an additional 1.5 million sq m of space captured by the program.

The report also found the program as it stands has already led to benefits of $44 million between 2010-2014, and would save more than two million tonnes of CO2 over 2010-2023, with workforce productivity gains of $168 million (though this figure has not been included due to high levels of uncertainty).

The news was welcomed by the Green Building Council of Australia.

“The review demonstrates why tackling energy efficiency in commercial office buildings is a smart solution to climate change – one that can be done at a minimal cost to industry and the tax payer,” GBCA chief executive Romilly Madew said.

“Lowering the threshold for mandatory disclosure is particularly important, as it will open opportunities for greater energy efficiency in the mid-tier commercial buildings sector.

“There are an estimated 80,000 mid-tier commercial office buildings around Australia, but this sector has traditionally lagged behind in energy efficiency upgrades. Lowering the threshold for mandatory disclosure will prompt many building owners to explore the range of services, resources and technologies that can deliver building upgrades, often at relatively low cost, with attractive payback periods.”

Tenancy lighting assessments to be reduced

The rules around tenancy lighting assessments, however, will be weakened, with the validity of an assessment being extended from one to five years.

The report found that the TLA component of the program was yet to deliver significant benefits, which corresponds with views of the Property Council of Australia, which had been calling for TLAs to be scrapped.

The report found extending the validity of TLAs from one to five years would reduce industry burden by a cumulative $2 million.

No scope for other building types

The report found that there was no evidence to support extending the CBD program to other types of buildings, such as shopping centres, hotels, schools and hospitals.

It had been previously suggested that the program could be extended to shopping centres, which had been met by criticism from the Shopping Centre Council of Australia.

“The split incentive market failure [the program addresses] may not be as acute for tenants of retail buildings, as they are more likely to be concerned with site size, configuration, location and rental price and conditions (rather than energy costs), as these are the key determinants of a tenant’s profitability,” the report said.

However, a recent WorldGBC report showed that sustainable retail spaces were increasingly becoming an important element to consumers.

The federal government will undertake public consultation on lowering the threshold to 1000 sq m until 12 March 2016. The consultation seeks to understand industry and stakeholder views on the following questions:

  • Do you support the proposed changes to the CBD Program regulations?
  • How can the CBD Program become more effective?

Key findings:

  • The Commercial Building Disclosure program is an appropriate program that complements a suite of related government policies and programs, including the Emissions Reduction Fund
  • The CBD program has been effective in inducing positive behaviour change in relation to commercial building energy efficiency in affected buildings, resulting in significant benefits
  • The CBD program is expected to deliver further benefits in energy reduction and greenhouse gas abatement
  • CBD remains the principal Commonwealth Government program for driving energy efficiency improvements in the office sector
  • There are several viable options for the future funding of the CBD program
  • Future evaluations of energy efficiency programs would benefit from improved data relating to pay-offs of energy efficiency upgrades and workforce productivity improvements

Recommendations:

  • The CBD program should continue
  • The focus for the CBD program should remain on office buildings
  • The CBD program should be expanded to include smaller office spaces
  • The CBD program should continue to harness opportunities for further process and administrative efficiency improvements
  • There are clear opportunities to improve the TLA component of the CBD program

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