The Australian government’s Clean Energy Finance Corporation (CEFC) wants to encourage a mass transformation in timber construction across the property sector with $300 million in debt finance for eligible projects Australia wide.
The new program seeks to transform large-scale building construction in Australia, with the potential to cut construction-related emissions.
This comes after new CEFC research confirms that there is a critical need to transform our approach to construction if we are to achieve an economy-wide transition to zero emissions.
According to the Green Building Council of Australia, embodied carbon made up 16 per cent of Australia’s built environment emissions in 2019 – and without intervention that percentage will balloon to 85 per cent in 2050 – the year by which Australia must achieve net zero emissions in line with the Paris Agreement.
Timber can have lower emissions than traditional steel, aluminium and cement, which are some of the more difficult materials to decarbonise. In a 2021 report the CEFC found that mass timber construction can play a role in meeting this challenge, with timber reducing embodied carbon by up to 75 per cent compared with conventional steel and concrete.
CEFC chief executive officer Ian Learmonth says that the cash will help finance the transition to zero emissions “by encouraging owners, developers and builders to use lower carbon engineered wood products in their projects… We are excited to bring [our] expertise to sustainable construction.”
Eligible recipients will be considered on a case-by-case basis and may be in commercial offices, retail, industrial, healthcare, education, multi-residential apartments, seniors living, or student accommodation.
Eligible projects may include those which:
- Use low carbon engineered wood products in large-scale construction
- Have secured appropriate materials source, accreditation and embodied carbon outcomes
- Require $20 million – $75 million in CEFC debt finance
- Are commercially sound, reflecting the rigorous investment requirements of the CEFC
- Comply with the CEFC Investment Policies, Guidelines and Risk Approach
“Innovations in engineered wood products have created new opportunities for mass timber construction to be used in larger projects, creating the potential for immediate and long-term environmental benefits.” Mr Learmonth said.
“Our property-related investment commitments have included demonstration projects with the ability to deliver best-in-class performance around energy efficiency, along with the effective integration of renewable energy into new and existing buildings,” CEFC director of property Ryan Rathborne said.
“Cutting emissions from embodied carbon is the next frontier for the construction sector, with enormous potential from development through to occupation.”