Speech at the launch of Every Building Counts: a practical plan for emissions reduction, Sydney


29 October 2019


ANGUS TAYLOR: It's absolutely wonderful to be here. Congratulations for putting this on and the Property Council for the extraordinary work you've done. I've worked with you closely for a number of years now and very proud to have been the first Minister to put in place City Deals in this country which was an initiative that you were very, very supportive of from day one and I know that many in this room, as I look around, were very much behind that initiative.

As I look at what's happening in Western Sydney right now, I see the pictures today in the paper of the new airport and where we're going with that, this is an extraordinary, extraordinary initiative - unprecedented in Australian history I think - building a new city attached and adjacent to an existing city or two cities if you think about it the right way - CBD and Parramatta. I'm very, very proud to have worked so closely with you through the course of all of that, and of course, a range of other initiatives that we've worked on over that time, including getting the CFC which is now in my area of focus on built environment which is something I'll say a little bit more about in a moment.

To the many other distinguished guests in the audience - great to see you and great to have a chance to talk about an important issue which is the role of energy in our built environment and the role that all of you play in this crucial and difficult issue of energy and emissions policy, which of course, is my daily focus.

You've all been recognised internationally for your leadership in this space on many occasions and I think we should celebrate that and I will say a little more about that in a moment.

Now, we are, as a Government, focused on delivering our emission reduction targets, our international obligations under the Paris Treaty, our 2030 target, but we see this very much as an industry partnership.

There is a notion out there that this is simply a job for government, and it's true, government must play an important role, but we firmly believe that this is also about partnering with industry.

When I look at people around me here today, you play an enormously important role in all of this and I want to outline some of the ways that we want to continue to partner with you as we have been partnering with you to help to address this issue and indeed, to achieve our international obligations.

Now, as Minister for Energy and Emissions Reduction, my goals are clear. The KPIs were set very clearly from the day I got into the job when the Prime Minister laid out that we were going to focus sharply on reducing the price of energy, making it more affordable for all Australians and making it more reliable as well.

That hasn't always been a goal of governments. Let's be clear, that hasn't always been the goal of governments, but it is absolutely a goal of this Government.

We think it is achievable at the same time as reaching our international obligations.

We have in recent years laid out a series of initiatives and plans to reduce electricity prices, reduce the cost of energy for all businesses across Australia as well as for households.

So from the 1st of July, for instance, we put in place price caps for standing offers - the Default Market Offer as it is known.

We've put in place the Retail Reliability Obligation which is the first time that energy retailers will have an obligation to make sure they have enough supply in the market to keep the lights on. That's a crucial initiative looking out three years or more to ensure that we have the lights on and we make sure we've got affordable energy in the system as well.

We see now that the results are coming in from this range of initiatives.

The CPI for the last two quarters has shown a down tick in the cost of energy, which is fantastic news for Australians across the board, particularly Australians in regional areas focused on manufacturing and energy intensive industries, including agriculture which is a big user of energy with the sugar industry, the dairy industry and so on.

Now, we also recognise that technology has an enormously important role to play in all of this including in our emission reduction obligations.

We believe and I have believed for a long time that the deployment of new existing technologies will play an enormously important role in our future energy needs.

We are continuing to consider ways that we can deploy technology and make sure that industry is deploying technologies in a way which can deliver on our commitments.

It will, technology will play a lead role as we look out at our emission reduction obligations, the need to keep reliability and drive affordability.

Sometimes that's more familiar technologies which we all understand well, and the use of pumped hydro for instance, it's very, very familiar to us, but it's a technology that can be deployed much more broadly than has been the case in the past and Snowy 2.0 is an example of that.

Of course, there's also newer technologies like hydrogen which we see as crucial, which is why we're working with our partners across the states through COAG in developing a National Hydrogen Strategy, developing a National Electric Vehicle Strategy, and while we're deploying the CEFC and ARENA to work very hard at how we make use of technologies that are already out there to reduce emissions, and to increase affordability and reliability, but also to give Australia a real advantage in those technologies where we can play a leadership role and hydrogen of course we believe is one of those.

Now all of this on the emissions side is about reaching our 26 to 28 per cent emission reduction target by 2030 versus the baseline in 2005.

We think this is absolutely achievable and responsible.

The crucial thing is that those targets are set at a level where we are confident we can keep a strong economy but it also means we need to partner with people like yourselves to make sure we can deliver on those outcomes.

I remind people all the time, our track record on this is one of the best in the world. It is absolutely extraordinary. We will smash our 2020 targets - 367 million tonnes is the expectation as of December last year. And we have one of the best carbon accounting systems in the world. We are the envy of the world when it comes to accounting for carbon, and thinking about how to make measure the outcomes from our initiatives.

As we look forward to 2030, back in February the Prime Minister announced the Climate Solutions Package, $3.5 billion which accounts for every one of the 328 million tonnes we need to abate in order to achieve our 2030 targets.

We're doing that as we face the challenge of, whilst very rapid reduction in emissions in the electricity grid, at the same time we know that the phenomenal success of our LNG export industry, unsurpassed in the world, is creating a challenge for us as we reduce emissions in our customer countries.

That tension is something we're dealing with and we're very confident we can achieve our targets despite that.

Included in that $3.5 billion Climate Solutions Package is $1.3 billion towards hydro projects, that's Snowy and Tasmania’s Battery of the Nation project, including work on the Marinus Link which is an interconnector between Tasmania and the mainland.

The package continues to the Government's support for the enablement of electric vehicles. Our approach here is simple, this is about customers making their own choices but enablement is crucial, and through ARENA and through other work we are doing we continue to facilitate the development of those, and deployment of those new technologies.

Now earlier this year we also announced as part of our Climate Solutions Package, $67 million of new energy efficiency initiatives.

The package includes funding for support actions under the COAG's trajectory for low energy buildings and we're growing that to improve the energy efficiency of new and existing buildings over time.

This is a national plan to reduce energy bills and carbon emissions and it sets a target for the sector, ultimately to zero energy ready buildings.

It was agreed by the COAG Energy Council in February 2019 and it's a roadmap identifying those cost effective energy efficiency policy changes that we think we can make.

Since my early days at McKinsey back in the ‘90s, it was very clear to me that energy efficiency was one of the opportunities to reduce carbon emissions cheaply. This is why it is such a strong focus for us. This is a real opportunity for us to reduce power bills, to improve affordability and reliability in the process, and at the same time reduce our emissions.

We've provided $11 million of funding through the current financial year to accelerate the energy performance of commercial and residential buildings, and that includes improvements to the National House Energy Rating Scheme which provides a very consistent basis to measure the energy efficiency of Australian homes.

Central to all of this will be the acceleration of the expansion of the NABERS energy rating and associated benchmarking tools into multiple new sectors in the coming years.

While the ratings tool is only available in six building types at the moment, the Government will consider expanding the program.

Now, the building sector is also absolutely central to keeping the economy strong. As I say, we set our emission reduction targets with a view to not compromising the economy, to keeping the economy strong, and at the same time the efficiency of our buildings has a significant impact on the emissions that we see across the economy.

As you heard earlier, 19 per cent of total energy consumption from your sector and 23 per cent of overall emissions is not lost on all of you that improving this sector offers significant opportunities for emission reductions as well as energy price savings.

In this context, it's great to see the results achieved by our leading developers and investors and our continued dominance of the global real estate sustainability benchmark is a tribute to the work you are doing.

The leadership by companies in this sector in this room, of course, is impressive.

The Green Building Council of Australia's star rating system has been instrumental in providing that leadership framework for sustainable design, construction, and operation of buildings.

Mirvac has played a crucial role in this, as have other leaders in the sector - Lendlease and Stockland - and I'm sure I've missed others who are playing a real leadership role.

Along with that, central to all of this is the Commonwealth's Commercial Building Disclosure or CBD program. It drives energy efficiency in the commercial office buildings by allowing buyers and tenants to compare office buildings based on the energy rating and lighting system.

Now, since that CBD program has gone into place in 2011, over 9,500 building energy efficiency certificates have been issued covering over 2,600 new buildings.

In the average area weighted NABERS energy rating has increased from 2.5 stars up to 4.1 stars. That translates to an energy saving in the office sector of 25 to 33 per cent.

It's so important we celebrate these successes because they tell us much about what we need to do from here.

So well done to all of those involved.

The combination of CBD and NABERS is leading to one of the world's fastest rate of energy efficiency and improvement.

Based on the success of those programs, the Government has commissioned the CIE - the Centre for Independent Economics - to conduct an independent review of the CBD program this year, and it is considering that the effectiveness of current programs and any case for expansion of mandatory disclosure of NABERS ratings in other high energy using building sectors. I'm looking forward to seeing the outcomes of that review.

Now the Every Building Counts Report, which I'm pleased to launch here today alongside Ken and others, is a really comprehensive articulation of many of the building policy options and technology opportunities available to both industry and government.

There are many policy suggestions here, many of which the Government, the states and territories through COAG are currently progressing, and that includes the trajectory for low energy buildings, the CBD program review, and so on.

At the start of my remarks, I said that emissions reduction is a partnership between industry and government. There is a keen acknowledgement amongst governments, both here and internationally, that buildings offer some of the most cost-effective, practical opportunities to reduce energy use and emissions globally.

I look forward to engaging with you and others who are involved in these important initiatives in the coming months and years whilst we achieve our international emission reduction obligations, whilst keeping our economy strong.

Thank you.

Minister for Energy and Emissions Reduction