The Commercial Buildings Disclosure program is set to be extended to smaller offices, with the federal government today (Tuesday) announcing the threshold will be lowered from 2000 square metres to 1000 sq m, effective 1 July 2017.

Federal energy minister Josh Frydenberg said the decision will see an additional 1000 commercial buildings required to disclose energy efficiency at the point of sale or lease. This will help inform purchasers and tenants of building energy costs, delivering more than $50 million in energy savings, and around 3.5 million tonnes of emission reductions over five years, Mr Frydenberg said.

The lowering of the threshold was one of the major changes to the scheme that had been advocated for during the independent review of the scheme by ACIL Allen earlier this year.

Another change the minister announced is an amendment to the tenancy lighting assessment so that from 1 September 2016 owners will only be required to undertake these assessments every five years, instead of annually.

Mr Frydenberg said this change will result in savings on “red tape” for building owners. ACIL Allen’s review found it had added a cumulative $2 million in costs across the industry during the program’s operation.

Tom Grosskopf, director, metro at the NSW Office of Environment and Heritage, which owns and administers the NABERS scheme on behalf of the state, territory and federal governments, said that when the CBD program was launched six years ago, and extended NABERS ratings outside of the premium office market, it led to an “unprecedented transformation” in the mid-tier building market.

This resulted in many non-premium buildings embarking on “an ambitious energy savings journey”, Mr Grosskopf said.

“The review of the CBD program showed that disclosure of NABERS ratings has brought positive benefits to the building industry and the Australian economy,” he said.

“We are excited that the changes to CBD will now also provide these benefits to smaller mid-tier office buildings, and enable Australia to continue forging ahead as the global leader in commercial building energy efficiency.

“The evidence is in: buildings that regularly use NABERS energy rating to improve energy efficiency attract higher rents, have lower vacancy rates and better capital growth while reducing carbon emissions. The CBD policy is a great way of getting runs on the board quickly for the property owner and our environment.”

The Property Council of Australia welcomed the news, saying the benefits outweighed any compliance costs.

“At first glance, the CBD scheme seems to increase the compliance burden, but the industry’s experience is that it creates significant benefits that far outweigh the costs,” PCA chief executive Ken Morrison said.

“The expansion of the scheme to capture smaller buildings is a great initiative and we will see the benefits flow through.”

President of the Australian Sustainable Built Environment Council Professor Ken Maher said the CBD scheme had been effective in raising awareness of building performance and creating a market incentive for higher-performing buildings.

“The expansion of this program is an excellent initiative, which will engage many more commercial buildings in energy efficiency endeavours,” Professor Maher said.

He said that ASBEC’s Low Carbon, High Performance report found that Australia’s building sector could deliver up to 28 per cent of Australia’s 2030 emissions reduction target and save $20 billion if a strong suite of measures was adopted.

“An expanded CBD program and a pathway for improved appliance efficiency are both strong steps in enabling the built environment to meet its emissions reduction potential, whilst also creating healthier and more productive buildings.” Professor Maher said.

Luke Menzel, chief executive of the Energy Efficiency Council, said the expansion of the program would make it easier for people buying or leasing offices to find out how efficient and comfortable offices are.

“In the past, it was hard for people buying or renting offices to find out how efficiently they used energy. This reduced the incentive for building owners to make offices efficient, leaving tenants with higher energy bills and less comfortable workplaces,” Mr Menzel said.

Mr Menzel said the program’s expansion would boost productivity.

The ACIL Allen review showed that office upgrades stimulated by the CBD had delivered over $72 million in energy and carbon savings, and by improving the comfort of offices, led to over $160 million in benefits from improved staff productivity.

“The Commercial Building Disclosure Scheme is win-win-win. It delivers lower energy bills for tenants, more productive staff and increases the value of Australian buildings. Expanding the scheme is a sensible next step in efforts to make Australia’s workplaces more efficient, comfortable and productive,” he said.

The GBCA also welcomed the news. Chief executive Romilly Madew said the program was a “critical driver in unlocking the emissions reduction potential of our buildings.”

It has also raised awareness of building energy performance among occupants, delivered cost savings and created jobs, Ms Madew said.

The Mid-tier commercial office buildings pathway report, developed by the GBCA and the federal Department of Industry, Innovation and Science with support from Sustainability Victoria, City Of Melbourne and EY, found an estimated 80,000 mid-tier commercial office buildings were ripe for energy efficiency upgrades.

“We believe lowering the threshold for mandatory disclosure will encourage 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,” Ms Madew said.