CBD Program expansion consultation FAQ

The government will consider the feedback provided to develop a plan for expanding the CBD Program and consider preparation of legislative amendments to the Building Energy Efficiency Disclosure Act 2010.

Previous consultation on expanding the CBD Program in 2016 and 2019 assessed if it should be expanded in a limited way to specific sectors. The current CBD Program expansion feasibility report commissioned by the department assesses the feasibility of expanding the Program in a staged manner to all major commercial building types. 

The introduction of the Climate Change Act 2022 establishes targets to reduce Australia’s net greenhouse gas emissions to 43% below 2005 levels by 2030 and reduce net greenhouse gas emissions to zero by 2050. This consultation is focused on identifying how the CBD Program can be expanded to help achieve this goal. eholders likely to be affected by any short to medium term changes. 

The CBD Program has been a cost-effective means of supporting office building owners and managers to improve energy efficiency, reduce energy bills and lower greenhouse gas emissions. Its expansion is an opportunity to further pursue these benefits to a greater number of building types.

The Australian Government has recently released the National Energy Performance Strategy to coordinate action to improve energy performance, including in the built environment. 

The Trajectory for Low Energy Buildings and its Addendum is a national plan that aims to achieve zero energy and carbon-ready commercial and residential buildings in Australia. Under the Trajectory, the government has committed to reviewing the CBD Program with a view to expanding into other types of buildings. The government, with the states and territories, is currently updating this Trajectory. 

More broadly, the government is development the Net Zero Plan to guide Australia’s transition to the legislated target of net zero greenhouse gas emissions by 2050. Six sectoral emissions reduction plans will support the Net Zero Plan, one of which will be the Built Environment Sector Plan.

The Department of Climate Change, Energy, the Environment and Water (the department) is organising this consultation as it is responsible for administering the CBD Program.

Although the proposal would see the eventual expansion of the CBD Program to most commercial buildings, whether, how and when this occurs is all under consideration. Expansion will not be occurring straight away.

Expansion to other building types and ownership groups will require amendment to the Building Energy Efficiency Act 2010 and Building Energy Efficiency Regulations 2010 and may also require the making of new determinations under the Act. 

Both the recent expansion feasibility study by KPMG and the 2019 review of the CBD Program (draft report) have suggested a staged expansion of the CBD Program to other ownerships structures, building types and sectors. The CBD Program expansion feasibility report’s recommendation puts forward a road map [AT1] for expansion as an effective way to transition Australia’s commercial buildings to net zero. 

The CBD Program expansion feasibility report also canvasses what energy and emissions information should be disclosed as well as the role that minimum energy performance standards may play.

You can find both reports at [www.cbd.gov.au]. 

The Australian Government has committed to reach net zero emissions by 2050. All segments of the economy will need to reduce their emissions to meet this goal. 

In Australia, non-residential buildings contribute around 10% of total emissions in the economy, most of this outside the office sub-sector, representing significant opportunities to decarbonise. 

Expanding the CBD Program could help to drive significant emissions savings in the commercial buildings sector. 

Expanding the CBD Program over time to encompass most major commercial building types would encourage sectors that had not previously been exposed to building energy efficiency to consider changes. This whole-of-economy approach is more aligned with the significant change required to meet Australia’s 2030 and 2050 decarbonisation targets. Establishing whole-of-economy disclosure and benchmarking frameworks could also support other decarbonisation accelerators such as the finance sector. 

In addition to the significant emissions reduction benefits, energy bill savings associated with reduced energy consumption is a key benefit of the CBD Program. There is potential to expand energy bill savings associated with the CBD Program to more building types and sizes and empower more building owners and operators to make informed decisions that enhance energy efficiency and reduce energy consumption.

The introduction of the Climate Change Act 2022 establishes greenhouse gas emissions targets requiring a reduction of Australia’s net greenhouse gas emissions to 43% below 2005 levels by 2030 and reducing Australia’s net greenhouse gas emissions to zero by 2050.

For this to occur every sector of the economy, including the built environment, will need to reduce its greenhouse gas emissions. 

In Australia, non-residential buildings contribute around 10% of total emissions in the economy, most of this outside the office sub-sector, representing significant opportunity to decarbonise.

Also, in a globally competitive economy many businesses are requiring their assets to reduce their emissions, due to financial requirements, corporate requirements, shareholder pressure or as part of their approach to corporate social responsibility.

Reducing the carbon emissions of a building and improving its efficiency has often correlated with an increase in asset value, additional investment and loan opportunities, consumer and tenant support.

There are no immediate changes to the CBD Program. This consultation was designed to gather feedback to inform future expansion of the CBD Program. 

Using the feedback provided, the government will develop a plan for expanding the CBD Program and progress the preparation of legislative amendments to the Building Energy Efficiency Disclosure Act 2010.

The CBD Program has a proven success rate for improving the energy efficiency of the buildings it regulates. 

Improvements in the energy efficiency of Australia’s large commercial offices resulting from the CBD Program has saved energy, helped reduce Australia’s greenhouse gas emissions and mitigated climate change. There are also direct benefits for building owners and lessors as well as for prospective buyers and tenants. A study of the financial performance of green office buildings by the University of Western Sydney, titled Building Better Returns, found that a 5-star NABERS Energy for offices rating delivered a nine per cent green premium in value over non-rated buildings.

The staged expansion of the CBD Program as outlined in the road map provides an opportunity to support the transition of Australia’s commercial buildings to net zero. Benefits of expanding the CBD Program include:

• emissions reductions  
• bill savings by empowering building owners and operators to make informed decisions that enhance energy efficiency and reduce energy consumption
• reduced building operating and maintenance costs
• reduced load on electricity networks.

Detailed costing analysis will be conducted as part of the regulatory impact analysis for any future expansion to a new building type. 

There are no immediate changes to the CBD Program. This consultation is designed to gather feedback to inform the future expansion of the CBD Program. Detailed costing analysis will be conducted as part of any future regulatory impact analysis for expansion to each new building type. Fees or costs for business will be addressed at this point. 

The current CBD Program will continue to operate as normal with there being no costs for obtaining a Building Energy Efficiency Certificate (BEEC).

The proposal would see the staged expansion of the CBD Program over time to most commercial buildings. How and when this occurs was part of the recent consultation process and is under consideration. 

The CBD Program expansion feasibility road map includes the staged introduction of the disclosure of NABERS energy ratings to most commercial buildings as well as the eventual introduction of a minimum standard for building owners to adhere to. Potential effects of this policy are likely to vary depending on how and when they occur. Likely effects include:

Building Owners – The specific triggers and requirements may differ depending on the type of building. For example, the disclosure requirements for office space are likely to be different to that for a hotel. 

The basic requirement of disclosure will be that a building owner will need to have a valid assessment of their building’s energy and emissions at a prescribed time and publicly disclose that information in a prescribed way. If the building type is required to meet minimum energy performance standards (MEPS) this will also be prescribed to form part of the regulatory requirement. 

Investors – Investors are likely to benefit from the expansion of the CBD Program. The expansion of disclosure will provide prospective investors with greater data on green buildings and their investments. This improved data access will assist investors to provide information to their shareholders. This will also assist international investment that will often need to meet international legislative requirements for investment. 

Asset / Facilities Mangers –The expansion of disclosure to a building managed by an asset/facilities manager would mean that the building would need to have an energy assessment done at a prescribed time and that this assessment would need to be publicised at a prescribed time in a prescribed way. 

Prospective tenants – Will have greater access to building data to inform their leasing decisions and is expected to increase competition between landlords to improve the energy efficiency of their buildings. This incentive for improvement often materialises in a more comfortable and climate adaptable building. 

Public –Australians will see a long-term shift towards net zero buildings that will also result in more comfortable environments for us to work, socialise, shop, recover and play.

The CBD Program expansion feasibility report identified that the CBD Program is an effective way to reduce commercial building energy use and could be used as a tool to transition Australia’s commercial buildings to net zero by 2050. 

A staged introduction will build energy and emissions performance over time and provide clear and early signalling to allow businesses to factor changes to their asset management.

The feasibility report suggests a road map as a way to expand building energy disclosure in a systematic way that will transform the energy and emissions performance of the sector, while being sensitive to the levels of readiness and maturity of different building types. 

The consideration of potential expansion of the CBD Program will not affect the current operation of the Program. The CBD Program will continue ensuring energy efficiency information is provided in most cases when commercial office space of 1000 square metres or more is offered for sale or lease.  

For more information about the CBD Program visit the CBD Website. 

The CBD Program was first launched in November 2010 following the introduction of the Building Energy Efficiency Disclosure Act 2010. At this time, it only regulated the sale or lease of 2000 square meters of office space owned by a constitutional corporation. 

Following a review in 2016 this was expanded to sale or lease of office space of 1000 square meters or more. 

In 2019 another review of the CBD Program took place. Although interrupted by the impacts of the Covid 19 pandemic, the draft report again affirmed the effectiveness of the Program and recommended its further expansion to hotels and office tenancies. 

In 2023, KPMG undertook research into the feasibility of CBD expansion to other building types. The resulting CBD Program expansion feasibility report recommended a road map for expansion. 

Australia’s commercial buildings are responsible for roughly 10% of Australia’s greenhouse gas emissions. The CBD Program has a proven record of reducing energy use and greenhouse gas emissions of the office building space that it currently regulates. Recent analysis of the CBD Program suggests it is performing well when compared internationally and that its expansion promises to be the best placed tool to achieve the task of reducing Australia’s commercial building sector emissions to net zero by 2050.  

A minimum energy performance standard would be a minimum operational requirement for the energy used to run that building, or the greenhouse gasses that are permitted to be released due to its operation. 

Although the bulk of the work to reduce the energy use of and emissions from Australia’s commercial buildings is likely to take place through voluntary actions triggered by mandatory disclosure, there will be some buildings that are not encouraged to improve. 

The combination of mandatory disclosure with the prospect of a minimum energy performance standard is expected to greatly incentivise behavioural change and reduce emissions. 

For more information about the various supports provided by various government agencies in your jurisdiction please visit the grants websites in your local area.

Australian Government:

Grants and funding | energy.gov.au 

State and Territory government support: 

State and Territory government support programs can be found on the Australian Government’s Energy website. Grants and funding | energy.gov.au 

NABERS has developed trusted tools for building sustainability assessment since 1998. Like the efficiency star ratings on your fridge or washing machine, NABERS uses ratings of 1 to 6 stars to help people understand the energy or water efficiency, waste management practices or indoor environment quality of buildings.

For energy efficiency, NABERS Energy ratings provide a simple, reliable and comparable measurement for hotels, shopping centres, apartment buildings, offices, data centres, public hospitals, schools, retirement living and residential aged care and warehouses and cold stores.

The NABERS Energy rating provides a performance-based assessment, which means that an accurate representation of actual building energy use is captured. It allows buildings to compare their performance with other similar buildings as well as track performance over time.

The successful implementation of the tool is based on the principle that ‘what gets measured gets managed’. Buildings with poorer design and technology can greatly improve their operational efficiency and reduce their emissions through informed operational actions prompted by the NABERS Energy rating result. 

The CBD Program expansion feasibility report compares the current CBD Program using the NABERS Energy rating for offices with other programs implemented overseas, finding that:

‘The review of international experience has reinforced the strengths of the Australian performance based NABERS system of rating. While the scale of the regulation being implemented internationally is larger than that currently in place in Australia, the reliance on attribute compliance measurement (which is easier to implement at scale) has likely limited effectiveness. Many countries are now opting for performance-based compliance measurement as it is seen to be more effective (though it requires greater attention to phasing to implement at scale).’

For more information about NABERS please visit the NABERS website. 

Many people are interested in commercial building energy efficiency and emissions reduction. 

Building owners are interested as efficiency upgrades save money, attract investment and lead to a more profitable asset. 

Investors are interested because it allows for better decision making and may make compliance with shareholder and regulatory obligations, both domestically and globally, easier. 

Tenants are interested as they can make a more informed decision on where they lease and can benefit from the resulting improvements of increased efficiency, thermal comfort, and climate adaptability. 

Consumers are interested as they will be able to direct their purchasing power to companies with more efficient and environmentally friendly commercial building assets. 

Consumers will also benefit from the resulting improvement of increased efficiency, thermal comfort, and climate adaptability. 

The success of the current CBD Program and the expansion of NABERS voluntary ratings tools provide a strong evidence base for considering an expansion of the CBD Program to help transition Australia’s commercial buildings to net zero. Reviews of the CBD Program in 2016 and 2019 and the expansion feasibility study in 2023 all demonstrate that the CBD Program is effectively reducing the amount of energy used in the operation of commercial buildings. Expanding this Program to more building types will expand these benefits. 

The 2019 CBD review process was interrupted by the effects of the COVID 19 pandemic, resulting in only a draft report being produced. This draft report recommended expansion of the CBD Program to hotels and office tenancies. 

In 2022, the introduction of the Climate Change Act , established legislative targets to reduce Australia’s net greenhouse gas emissions.  This will require all areas of the economy, including commercial buildings to reduce their emissions. 

In 2023, KPMG were engaged to provide an independent assessment of whether expanding the CBD Program is an effective approach and to investigate whether other international disclosure requirements provide better models.

CBD Program expansion feasibility report found ‘The CBD Program is performing well when compared with other programs internationally. Its expansion promises to be the best placed tool to achieve the task of reducing Australia’s commercial building sector emissions to net zero by 2050.’ Further information including the road map recommendation can be found in the executive summary on pages 1-7 of the Report. 

The road map was recommended:

 ‘as a way to expand building regulation in a systematic way that builds to transform the energy and emissions performance of the sector, while being sensitive to the levels of readiness and maturity in smaller buildings and some non-residential building sectors.’ 

See the CBD Program expansion feasibility report for more information about the road map and for the original road map Image. A high-level version of the road map is also available here.

The government will consider feedback collected during this consultation and work with the built environment sector on the next steps, including amendments to the Building Energy Efficiency Disclosure Act 2010. 

The Commercial Building Disclosure (CBD) Program is a regulatory program that requires energy efficiency information to be provided in most cases when commercial office space of 1000 square metres or more is offered for sale or lease.

Please click here to watch a short 90 second video on the current CBD Program. 

For further information about the current CBD Program including, what the program is, who it applies to, and how to comply, please visit the CBD website. 

The Commercial Building Disclosure (CBD) Program requires energy efficiency information to be provided in most cases when commercial office space of 1000 square metres or more is offered for sale or lease. The aim is to improve the energy efficiency of Australia's large office buildings by ensuring prospective buyers and tenants are informed.

The CBD Program requires most sellers and lessors of office space of 1000 square metres or more to obtain a Building Energy Efficiency Certificate (BEEC) before the building goes on the market for sale, lease or sublease.

BEECs are valid for up to 12 months and include:

• the building's National Australian Built Environment Rating System (NABERS) Energy for offices star rating
• a tenancy lighting assessment of the relevant area of the building

For more information about the CBD Program please visit the CBD Prorgram website. 

A BEEC is a Building Energy Efficiency Certificate sets out the energy efficiency rating of a building or area of a building that is offered for sale, lease or sublease.

BEECs contain two parts:

Part 1 consists of a National Australian Built Environment Rating System (NABERS) Energy for offices rating for the building — The NABERS Energy for offices rating provides information on the building’s energy efficiency. It must be a base or whole building rating (a whole building rating also covers the tenanted space and is disclosed if there is inadequate metering to obtain a base building rating). For more information see NABERS Energy for Offices star ratings

Part 2 consists of a CBD Tenancy Lighting Assessment (TLA) for the area of the building that is being sold, leased or subleased. The TLA is an assessment of tenancy lighting that measures the power density of the installed general lighting system. For more information see Tenancy Lighting Assessments.

NABERS stands for the National Australian Built Environment Rating System. NABERS is a simple, reliable sustainability rating for the built environment. Like the efficiency star ratings on your fridge or washing machine, NABERS provides a rating from one to six stars for buildings efficiency across:

• Energy
• Water
• Waste
• Indoor environment

This helps building owners to understand their building’s performance versus comparable buildings in the same sector, providing a benchmark for progress.

NABERS have developed and are continuing to develop new ratings tools for each of Australia’s commercial building types. The NABERS Base Building Office Energy Rating Tool has been by the CBD Program since the program’s inception. 

For a full list of available tools please visit the NABERS website.

NABERS stands for the National Australian Built Environment Rating System. NABERS is a national government program administered by the NSW Government (the National Administrator). 

Although managed by the NSW Government, the operation of NABERS is overseen by a National Steering Committee (NSC) comprised of all State and Territory representatives, and the Australian Government. These government members have voting rights within the Committee. 

The NABERS NSC is also made up of non-voting stakeholder members from bodies representing the wide range of NABERS stakeholders. For a full list of NSC members and information about NABERS governance please visit the NABERS website.  

NABERS have developed and are continuing to develop new ratings tools for each of Australia’s commercial building types. The NABERS Base Building Office Energy Rating Tool has been by the CBD Program since the program’s inception. 

For a full list of available tools please visit the NABERS website. 

The Department of Climate Change, Energy, the Environment and Water is responsible for the CBD Program policy, operation, and enforcement. 

The Hon Chris Bowen MP – Minister for Climate Change and Energy is responsible for the Building Energy Efficiency Disclosure Act 2010 which creates the CBD Program. 

The Minister is supported in this role by the Hon Josh Wilson MP as Assistant Minister for Climate Change and Energy. 

According to NABERS, office buildings using NABERS ratings to measure their environmental performance have reported:

• Carbon emissions savings of 11.57 million tonnes since FY2000
• Energy bill savings of over $1.7 billion since FY2000
• Water savings amounting to 4,626 megalitres since FY 2010
• After 10 ratings, an average 40% reduction on emissions intensity (in whole and base buildings)

According to Scott Beauman in his article Everything you ever wanted to know about NABERS rating, there are ‘significant benefits associated with obtaining a high NABERS rating.’ These include, increased asset valuation, cost saving, improved tenant satisfaction and retention and increased marketability.