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Buildings to the rescue for ERF

The federal government is searching for ways to give the Emissions Reduction Fund (ERF) a much-needed boost, and appears to see energy efficiency and the built environment as two areas with great potential.

The Emissions Reduction Fund (ERF) – recently expanded and rebranded as the Climate Solutions Fund – is the centrepiece of the government’s emissions reduction policies. It is the key to Australia meeting its commitments under the Paris Agreement: a 26–28 per cent reduction of emissions from 2005 levels by 2030.

The scheme functions through auctions, where organisations and individuals can put forward plans to reduce their emissions and secure funding. According to the government, since the ERF began in 2014, it has contracted over 190 million tonnes of abatement, of which more than 44 million tonnes has been delivered.

But in the most recent ERF auction, in July, only three projects secured backing of $840,000 – a small amount considering the government has made $4.45 billion available to the fund. In terms of emissions reductions they were also small, representing just 0.01 per cent of Australia’s annual greenhouse gas pollution.

As the ERF struggles and Australia’s emissions continue to rise rather than fall, an expert panel was convened to undertake a performance audit of the scheme.

In October, the panel circulated a discussion paper to industry groups examining opportunities for further abatement. It noted that the ERF has been very successful in generating offsets under the vegetation and waste methods – so far these projects account for 97 per cent of Australian Carbon Credit Units (ACCUs) issued. In sectors such as energy efficiency and the built environment, however, abatements have been disappointing.

Through the consultation, peak bodies from the built environment highlighted the barriers that their stakeholders face when trying to access the funds. These include:

  • ERF plans must offer at least 2,000 tonnes of annual emissions savings to participate in auctions. This is well out of reach of a typical building – and even most building portfolios.
  • ERF plans must offer savings over a seven-year period – an obstacle for the property sector where buildings change hands frequently.
  • Time lags between submissions and funding, and the sheer cost of putting a proposal together, are deal-breakers for those in the property sector wishing to access the ERF.

While the government looks for ways to make the ERF more effective, the Property Council of Australia and Green Building Council of Australia (GBCA) have launched a policy toolkit called Every Building Counts: A practical plan for emissions reduction. It contains 75 recommendations for federal, state and territory and local governments – a number of which are related to HVAC&R.

Whether these are incorporated into the review of the ERF remains to be seen.

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