AIBS National News

An information statement released by DEWHA outlines the latest updates on the mandatory disclosure of commercial office buildings energy efficiency.

The Australian, state and territory governments have agreed to implement a new national scheme for the mandatory disclosure of commercial office building energy efficiency, subject to regulatory impact assessment.

The new scheme will require building owners to provide energy efficiency information to prospective buyers and lessees at the point of sale and lease of large office space.

Development of the new scheme is being led by the Australian Government Department of the Environment, Water, Heritage and the Arts (DEWHA) on behalf of the Australian, state and territory governments.

The objective of mandatory disclosure is to ensure that meaningful information is available to buyers and lessees of office space on the relative energy efficiency of buildings.

Provision of this information is intended to help overcome market barriers that currently inhibit cost-effective energy efficiency investment.

This includes the ‘split incentives’ between building owners, who are responsible for the energy efficiency of offices, and lessees, who ultimately pay for the energy costs.

This problem is exacerbated by ‘information asymmetry’, where owners have more information about the energy efficiency of a building than prospective buyers and lessees.

Scheme development

In December 2008, DEWHA released a Consultation Regulation Impact Statement and
Consultation Regulation Document for public comment. Information forums were also held in each capital city during January and February 2009. Forty-one written submissions on the proposed scheme were subsequently received. The consultation documents and public submissions can be accessed on DEWHA’s web site: www.environment.gov.au/buildings  

The central requirement of the proposed scheme, as outlined in the consultation documents, is that when commercial office space with a net lettable area greater than 2,000 m² is to be sold, leased or sub-leased, an appropriate energy efficiency star rating and assessment report of the building must be disclosed:

• in any advertisement about the sale or lease (star rating only);
• to prospective purchasers and tenants (star rating and assessment report); and
• to a central registry (star rating and assessment report).

The consultation documents also proposed that the National Australian Built Environment

Rating System (NABERS) Energy rating tool for offices would be the accredited rating tool for the scheme. Further information on NABERS Energy can be obtained from www.nabers.com.au  

The consultation process revealed substantial support for the disclosure of NABERS Energy base building star ratings. However, several submissions raised issues with the proposed disclosure of NABERS Energy tenancy star ratings. As a result, an industry workshop was held in March 2009 to discuss the issue of tenancy disclosure.

Comments received through the consultation period have been communicated to decision makers within the Australian, state and territory governments and refinements to the proposed scheme are currently being considered. It is expected that an announcement on the final design of the mandatory disclosure scheme and the proposed implementation date will be made in the next few months.

National Strategy on Energy Efficiency

On 2 July 2009, the Council of Australian Governments (COAG) formally agreed to phase in mandatory disclosure for commercial buildings from 2010 as one of the key measures under the new National Strategy on Energy Efficiency, subject to regulatory impact assessment.

Mandatory disclosure for commercial buildings will be implemented in two phases: 

• Phase One involves implementing a national mandatory disclosure scheme for large commercial office buildings (2,000 m² or larger).
• Phase Two involves consideration of expanding mandatory disclosure to other commercial building types, including hotels, retail buildings, schools and hospitals

Any extension would be subject to a further regulatory impact assessment.

Further details on the new National Strategy on Energy Efficiency can be obtained from www.coag.gov.au  

Implementation

Once agreement has been received from all governments on the design of Phase One, work will commence on enacting appropriate legislation, establishing an administrative unit, communicating the scheme to industry and training assessors.

At this stage, it is not anticipated that the scheme will be in place before mid 2010.

For more information, please contact: commercialbuildings@environment.gov.au
 
Advice for building owners

• Energy use and sustainability considerations are increasingly becoming part of our decision making processes
• A NABERS Energy base building star rating is a great way for building owners to get a snapshot of their building’s energy efficiency and familiarise themselves with the process of obtaining a rating.