Berlin's Reichstag Building. Photo by Francesco Luca Labianca

NABERS continues its global leading impact with Germany the next country to investigate its potential to transform commercial properties, after the UK and New Zealand adopted the rating tool. But could we also pick up some powerful programs from Germany in return?

The complimentary energy efficiency approaches of Australia and Germany have created an ideal climate for collaboration between the countries to achieve better outcomes for both, with the methods for doing so outlined in a jointly-produced report released today.

Australia’s world-leading commercial energy efficiency rating standard, the National Australian Built Environment Rating System (NABERS), has generated immense interest among German officials as a highly effective tool to emulate or wholly adopt. 

Similarly, Germany’s hugely successful residential financial incentive scheme, driven by national promotional bank kfW, is being looked at to help Australia boost energy efficiency standards for existing homes. 

A collaborative report produced by Australia’s Energy Efficiency Council (EEC), the German-Australian Chamber of Industry and Commerce and independent German research group, adelphi, suggests the countries’ contrasting approaches in the residential and commercial sectors leaves the door wide open to apply the lessons of each. 

Luke Menzel

The report titled, Further, faster, together: Opportunities for collaboration between Germany and Australia on energy efficiency in buildings, was commissioned by the German Federal Ministry for Economic Affairs and Energy (BMWi). 

EEC chief executive, Luke Menzel has spearheaded Australia’s engagement with Germany on energy efficiency and was instrumental in producing the report. 

“We spent six months doing a deep dive, really getting a strong understanding of the energy efficiency market for buildings in Germany to complement what we already know here in Australia — and the result was pure poetry,” Menzel told The Fifth Estate.

According to Menzel, the structure and inclusiveness of NABERS appealed greatly to the German side, which lacked a comparable scheme in its commercial building sector. 

“The Germans are incredibly excited about what we’ve achieved here with NABERS and Commercial Building Disclosure – that light touch regulation and well understood and collaborative process that sits around NABERS. The deep investment that the industry has in that it really is world-leading,” Menzel said. 

Executive director of the German-Australian Chamber of Industry and Commerce, Christoph von Spesshardt said in Germany while a lot had been done to reduce emissions in the residential sector, commercial buildings were lagging behind. 

Christoph von Spesshardt

“There are roughly three million commercial buildings in Germany, around 700,000 of them are office buildings. They’re only 13 per cent of the existing building stock, but they are 47 per cent of emissions in the building sector,” von Spesshardt said.

“I think with NABERS it’s a very interesting instrument to combine market measures with transparency and really leaving it to all stakeholders, even the big end of town, to actually get engaged and this kind of incentive is so good.

“Learning the lessons of NABERS or even considering adopting NABERS, as New Zealand and the United Kingdom have done, is something I’m very hopeful will take place in Germany,” he said.  

What we can learn in reverse – programs  for the urgently needed transformation of the housing market

Inverse to Australia’s success, Germany runs a highly effective financing scheme for residential energy efficiency upgrades — an area in which Australia is lagging well behind overseas best practice. 

Germany’s approach has been to make residential energy performance upgrades eligible for significant government grants and interest rate reductions, leading to an ecosystem of building experts geared to guide owners through the retrofit process. 

The higher the energy rating sought by owners the more interest rate relief and direct funding becomes available, up to around AU$40,000.

According to von Spesshardt, the widely available incentives are so powerful that 50 per cent of new buildings completed in recent years meet an above minimum standard energy rating. 

Effectively every customer walking into a bank in Germany seeking a loan for a retrofit, to do an extension or to buy a new home is being offered this option. 

“The banks are always having the conversation, ‘I can offer you this grant or I can offer you this reduced interest rate, if at the same time you upgrade your energy performance.’ So it’s been incredibly successful in driving performance upgrades in Germany,” Menzel said. 

He noted that smaller scale programs already existed in Australia, driven by groups such as the Clean Energy Finance Corporation which has been working with the banks to support financing energy efficiency upgrades, and Australia was now in a position to radically scale these processes up. 

“This is where the poetry comes in,” Menzel said, “We have the opportunity through this collaboration with Germany, who have been driving this residential financing agenda for the last 15 years, to learn from the best in the world.”

“Hence the title of this report, we can get further and faster together if we work together on this really crucial agenda.”

Sticks, carrots and tambourines

It is not the first time von Spesshardt has spruiked the success of Germany’s residential efficiency scheme to Australia. Speaking to The Fifth Estate in 2017, he described Germany’s hugely successful regulatory environment as “sticks, carrots and tambourines”.

The sticks are stringently defined energy efficiency baselines for new buildings, the carrots are the availability of grants and preferential interest rates for energy efficiency upgrades, and the tambourines are spreading the word about the benefits of energy efficiency for the environment and for the back pocket of homeowners. 

Another upshot of the German approach is that with considerable amounts of government money going into the sector, compliance oversight is built into the system. 

“For those specific homes in Germany, every single one is checked that it is delivering the promised energy performance rating, because there’s a higher threshold for compliance because the government is giving money to achieve a higher outcome,” Menzel said. 

“The German government is thinking about the built environment as critical infrastructure in the energy transition that needs to be upgraded at scale for them to hit their climate targets. And I think this is something we can learn from here in Australia.”

Good NABERS 

There is an existing framework between the countries’ governments to facilitate engagement in the area of energy, the Australian-German Energy Working Group, which meets at least once a year to define priority areas. 

Hydrogen is one of the main areas of collaborative engagement and it was recently announced the countries would work together to establish a “Australia-Germany Hydrogen Accord”.

At the last in person meeting in 2019, the group identified energy efficiency as another crucial area for collaboration and exploration, which spawned the commissioning of this week’s report and the creation of a sub-committee co-chaired by Menzel and von Spesshardt.

“Working together to leverage the insights generated on opposite sides of the world really will help us get further, faster, cutting energy bills and carbon emissions along the way,” Mendel said. 

“Whether Germany learns from the principles of NABERS and adopts their own system, or like the UK, we actually see NABERS picked up in Germany, that’s a conversation that will play out over the coming years. 

“But I think we can say with some confidence, they’re very interested in learning from Australia’s leadership in that space.”

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