23 June 2016

Building energy disclosure requirements are expanding

This article was written by Chris Wheeler, Mark Evans and Oscar Boag Taylor. 

The Minister for Resources, Energy and Northern Australia, the Hon. Josh Frydenberg on 21 June 2016, announced the threshold for mandatory disclosure of energy efficiency information in relation to commercial office buildings under the Commercial Building Disclosure (CBD) program will be reduced from 2000 square metres to 1000 square metres. These changes will commence on 1 July 2017, after a one year transition period.

Tenancy Lighting Assessment Changes

Accompanying these changes, the Tenancy Lighting Assessment (TLA) component of the BEEC validity period will increase from one to five years. Changes to the TLA validity period requirements are proposed to take effect for all new TLAs submitted from 1 September 2016. This means that building owners with an existing TLA on 1 September 2016 will enjoy extended validity for five years.

These changes follow a review of the CBD Program earlier this year and public consultation on the proposed changes to the program.

The CBD review found the program had delivered a reduction in end-use energy consumption of 10,020 TJ, abatement of 2 million tonnes of greenhouse gases and has delivered $15 million in benefits ($44 million including GHG reductions) between 2010 and 2014, by improving the energy efficiency of Australia’s large office buildings. Buoyed by the success of the program’s impact, the Government has decided to extend its reach.

At one stage there was a possibility that the whole program may have been abandoned. The outcome of the CBD review, however, was a positive one in support to continue the program.

Impact for Prospective Purchasers and Tenants

Most commercial building owners and their advisers are familiar with the requirement to have a BEEC before they are able to lease or sell commercial premises that are at least 2,000 square metres.

From 1 July 2017 the number of affected leases and building will increase as the net of disclosure affected premises is widened. The Department anticipates that over 1,000 new buildings across Australia will be impacted, adding 1.5 million square metres to the reach of the program.

These changes, while announced, are yet to be translated into law – so that will need to wait until after the outcome of the Federal election. It is likely that the changes would proceed under the banner of either major party post the election.

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