Government policies and programs to cut construction based embodied carbon emissions is a relatively new field, yet crucial in supporting Australia to achieve its ambitious 2030 and 2050 emission reduction targets. Government is both a driver of change through its procurement policies and choices as well as an enabler of change through industry policy and supporting the development of required taxonomy and measurement tools, skills development and enabling greater resource efficiency by supporting circular economic structures.
On 27 October 2022 MECLA hosted a Spotlight on Policy Levers to Drive Change, discussing the diverse ways government can help drive down embodied carbon emissions and achieve net zero. This event included the presentation of MECLA’s new international best practice policy review, available to view on our website.
- Peta Olesen – Director in the International Climate and Net Zero Pathways Division, Department of Climate Change
- Hudson Worsley, MECLA Chair and Founder of Presync
- Adrian Dwyer, CEO at Infrastructure Partnerships Australia
- Mitch Shannon, Director at Pollination
- Teresa Scott, Executive Director at the Australasian Procurement and Construction Council
- Robyn Hardy, Adjunct Professor at the University of Canberra
- Finnian Murphy, Special Operations Lead at Sun Cable
- The Australian Government is commited to a 43% emission reduction below 2005 levels and 82% renewable energy penetration of our national electricity grid by 2030. These ambitions create many jobs, require many skills, and need a huge amount of infrastructure development
- 53% of the world’s steel starts in Australia. There is a massive opportunity for economic growth by creating a green steel supply chain and exporting materials and energy to other nations. The recent government budget includes 141.1m to realign investment in carbon capture technologies to hard-to-abate industrial sectors
- The government is designing a Guarantee of Origin scheme to measure, track and verify emissions associated with hydrogen production
- MECLA recently released an International Policy Review of best practice embodied carbon policies. Government can be a driver of change through procurement policies and an enabler of change by supporting the development of required tools such as taxonomy laws, inventories and calculators, an independent carbon database, and supporting skills development and circular economy structures.
- Innovation and decarbonisation will accelerate with a carbon tax
- Best practice should include a carbon base case during the business case for a project
- Best performing countries in innovation and R&D have consistent policies that are frequently improved upon, a balance between push and pull policies that create demand for new industries while supplying resources needed to meet that demand, clear industrial direction, large state-sponsored R&D funding ecosystems, and an enabling environment where government explicitly takes responsibility for climate innovation to thrive
If you missed the session, read a summary of what was discussed below:
Monica Richter, MECLA Project Director from WWF, acknowledged country and welcomed everyone to the session.
The first presenter was Peta Olesen, Director at the International Climate and Net Zero Pathways Division, Department of Climate Change, Energy, the Environment and Water. Peta stepped through a few of the key actions and ambitions of the new government that underpin Australia’s transition to a low carbon economy. The Department of Climate Change, Energy, the Environment and Water has two main targets: 43% emission reduction below 2005 levels by 2030 and an 82% renewable penetration of our national electricity grid by 2030. Australia has an immense infrastructure opportunity to achieve these goals. It is estimate it would take installing 2,200 five-hundred-watt solar panels per day between now and 2030 to succeed. That is a lot of skills, jobs, and people. Peta outlined some of the relevant budget announcements released two days prior to the spotlight event. The budget includes 141.1m to realign investment in carbon capture technologies to hard-to-abate industrial sectors such as cement manufacturing and accelerate carbon dioxide removal and negative emissions. They are also looking to reform the safeguard mechanism to help drive reductions in large industrial manufacturing.
The world will need steel for the green transition, and 53% of the world’s steel starts in Australia. Combined with Australia’s potential for green energy, the government sees this as an opportunity for economic growth by creating a green steel supply chain and exporting materials and energy to other nations. The government is designing a Guarantee of Origin scheme to measure, track and verify emissions associated with hydrogen production. They are also developing a national framework for measuring embodied emissions and which will be adopted into NABERS.
Peta also outlined the Industrial Deep Decarbonisation initiative, whose goals are stimulating global demand for low carbon industrial materials by encouraging governments and the private sector to buy low carbon steel and cement and sourcing and sharing data for common standards and targets.
Hudson Worsley, MECLA Chair and usually the host of these sessions, presented the MECLA International Policy Review. Hudson spoke about the policy frameworks around the world that help drive down embodied carbon.
At the highest-level government is a driver of change through procurement policies that reward and require embodied carbon reductions through low emission construction materials and practices. Government can also be an enabler of change by supporting the development of required tools such as taxonomy laws, inventories and calculators, an independent carbon database, supporting skills development, and supporting circular economy structures.
MECLA identified fourteen voluntary and eight mandatory policy mechanism from three key regions. Interestingly, the language reflected the policy environment in which it was being implemented. In otherwords, the policy doesn’t always carry the obvious title of embodied carbon.
Policy and programs can be grouped into five categies:
- Policy levers to drive the market, such as carbon pricing, rebates, green loans and tools to overcome a green premium such as carbon contracts for difference
- Role of industry and the market, collaboration between government and industry, helping industry calculate embodied carbon, and remaining globally competitive (codesign)
- Rating schemes for building performance such as NABER, BASIX, and trusted sources of data
- Procurement, through purchasing low carbon materials
- Data, tools and skills needed to get to net zero
Adrian Dwyer, CEO of Infrastructure Partnership Australia, outlined the challenges infrastructure faces in decarbonising and practical adoptions that could accelerate the process. Infrastructure Partnership Australia (IPA) found three key challenges to infrastructure decarbonisation: energy, transport and embodied carbon. Of those three, embodied carbon is the one that does not have as clear a pathway. IPA found that key intervention points to reduce infrastructure related carbon emissions are in the early stages of projects, far before contractors begin to tender. The key recommendation that emerged from this research is having a carbon base case in the business case for a project with a focus on embodied carbon. This base case would serve as a reference to inform decisions on the infrastructure project. Furthermore, in the best-case scenario you would also know what the carbon outputs would be in the no-build scenario. These pieces of information being provided to decision makers at the conception of an infrastructure project would give government the option to demand procurement achieving carbon reductions against the base case.
The new Infrastructure NSW report adopts this recommendation and Adrian hopes that this will be adopted by other jurisdictions and owned by treasury. Adrian capped off his talk by saying all of this would be a whole lot easier if we had a carbon tax, but if we don’t, these other options will also help drive down emissions in infrastructure.
Mitch Shannon, Director at Pollination, spoke on how government can drive investment into innovation as well as research and development (R&D). Mitch presented a piece of research conducted by Pollination comparing Australia’s policy setting for innovation and R&D with other countries that were top performers. The policy framework used analysed two categories of policy; the Resource Push side, focused on setting clear signals and priorities to give investors’ confidence to invest in climate innovation and R&D, and the Market Pull side around enabling markets through short and long-term mechanisms that create demand such as carbon pricing mechanisms.
For every country they looked at there were cohesive and comprehensive policy settings compared to the Australian context, with strong balances between push and pull policies. Mitch noted that Australia had comparative push policies to other top performing countries, but did not compare on the pull policy side – such as subsidies for emerging technologies in low emissions, and robust carbon pricing. He also notes that other governments are particularly involved in the early stages of technological development and commercialisation than what is typically seen in Australia.
Mitch summarises the successes of top countries as having five shared key themes:
- Consistent policies that are frequently improved upon
- A balance between push and pull policies, which creates demand for new industries while simultaneously supplying the resources need to meet that demand
- Clear industrial direction, a set of clear priorities guiding industrial development
- Public capital at-risk, large and active state-sponsored R&D funding ecosystems that support early innovation, which supports early innovation and is often seen to crowd-in private capital at an early technology readiness stage
- Enabling environment, with government explicitly taking responsibility for creating enabling environments for climate innovation to thrive
Teresa Scott, Executive Director of the Australasian Procurement and Construction Council (APCC) and Robin Hardy, Adjunct Professor at Uni of Canberra, then engaged the audience to discuss industry readiness for low emissions procurement. They wanted to know what industry’s reaction would be to APCC setting benchmarks or reports for emissions, and what impacts such asks may have on industry. If you would like to provide some feedback to Teresa and Robyn you can contact the APCC.
The final presenter on the day was Finnian Murphy, Special Operations Lead at Sun Cable. Finnian discussed the Australia-Asia PowerLink, expected to be the world’s largest solar farm at 17-20GW, the largest battery system, and the longest transmission link of 5,00KM going subsea all the way to Singapore. Finally, the technology in PV and battery storage is ready for this project, which has been considered since the 1990s. There are high material demands for this type of innovation in energy creation and transmission, and procurement of those materials in a sustainable way is also a key ambition of Sun Cable. Finnian describes the need for a clear low emissions marketplace to help visibility of the material side.