BusinessDesk: Marty Verry -Time to pull the trigger on Building for Climate Change programme

Some building materials are massive emitters of carbon dioxide. This ‘embodied carbon’ as it is known, causes up to 10 per cent of New Zealand’s CO2 emissions. Fortunately though, it is also the easiest and cheapest to reduce and MBIE has a plan ready to do just that.

The worst construction offenders are steel and cement, which are estimated to be responsible for up to 8 percent of world emissions, each. Their emissions are caused by the mining, extraction and transport of their inputs, the energy source used to heat and smelt their feedstock, and the chemical reactions in their creation.

On the one hand the world needs these products, but on the other the climate needs their emissions eliminated or for designers to use substitute materials wherever possible.

The good news is that there are emission reduction options for concrete and steel that will get them part way there. The bad news is they require significant capital expenditure and R&D breakthroughs – breakthroughs that have been sought for over 30 years now with limited success.

‘Building for Climate Change’ – good company

Common sense tells us manufacturers will not incur these R&D and capex costs unless they must. That’s where the Building for Climate Change programme comes in. The programme requires building designers to measure the Embodied Carbon from materials and the construction process, and report that as part of the building consent application process. Caps on the carbon emissions per square meter of the building must then be met, and the caps reduce over time.

Manufacturers will need to invest, or have their products substituted with low emission alternatives.

Countries and regions around the world are rolling out similar programmes. The European Union is the leader, with countries such as France, Denmark, Sweden, Norway and The Netherlands advanced in their programmes. All EU members are now required to develop similar programmes. States in Australia, California and others are following suit.

The general target is to reduce emissions by 30-50 percent by 2030 using this reducing cap strategy. In New Zealand the Green Building Council is calling for a target of 40 per cent. Its Green Star ratings are increasingly targeting ‘embodied carbon’, as the ‘operational’ emissions from day-to-day energy use becomes less relevant as the grid moves toward being fully renewable. ?

Even the requirement to measure and report embodied carbon is having an effect. The climate damage from a building material selection is hard to ignore when reporting is required in order to get a building consent.

The 40 per cent is possible here. MBIE has been consulting industry on its Building for Climate Change programme since 2020. It has been developing the technical side of how it will work and measuring the ‘base case’ of carbon in current buildings, so relative reduction targets can be set.

Materials suppliers have developed what are called ‘Environmental Product Declarations’, or EPDs, which use international standards to report the carbon per unit of their material. Easy to use building design plug-in tools such as V-Quest have been developed to make it easy for designers to select materials to reduce and report embodied carbon, and comply with the caps.

Sector support – subject to follow-through

Through good consultation by MBIE, the construction industry is onboard. Designers have started selecting lower carbon materials and sectors have set-out roadmaps for de-carbonisation and started the process. ?

But here’s the catch for the new government to realise; the industry is going down this sustainable pathway because Building for Climate Change has been signalled by MBIE as imminent.

The prospect of regulation has changed behaviour, for now.

Without doubt, if the government does not follow through, MBIE’s credibility in this area will be lost and the sector will revert to what it knows. And what it knows is traditional un-sustainable building that causes up to 10 percent of New Zealand’s emissions, and 15 per cent on an emission ‘consumption’ basis.?

It is crucial therefore that the National-led government commits to this programme if it is serious about climate change.

Lower construction costs

In many ways the programme is also a no-brainer. It puts the investment cost on material manufacturers to convert their factories with low emission options. Whenever that happens, the technology and new scale used results in productivity gains, economies of scale and therefore lowers building material costs. This justifies the capex required.

Viewed this way Building for Climate Change will also lower the cost of construction in New Zealand.

Many designers, engineers and builders are going straight to the lowest carbon option of them all – wood. After a few projects, they quickly work out how to make it cost effective.

Think NZ Inc

This focus and incentivisation of sustainable materials is also good for New Zealand’s forest and wood processing sector. Whereas most cement and one third of steel is imported, nearly all wood is grown and manufactured here. Quite apart from the improved balance of payment from encouraging local supply over imports, there are regional economic and social development reasons, as well as Māori asset and employment considerations. Around 50 percent of the forestry and wood processing workforce is Māori.

Analysis shows that the Building for Climate Change programme could spur more than $1.5 billion of investment in wood processing alone and create 7,700 jobs.

Local demand for logs is sorely needed by the forestry industry too. It sends around 50 per cent of all harvested logs to China, a dangerous over-reliance on one market.

Can ‘mass timber’ substitute for steel and concrete?

Mass timber, as the name suggests, is made of components that are glued together to provide large very strong products such as glulam and cross laminated timber (CLT). They are direct substitutes for steel and concrete, only they are made from carbon dioxide instead of emitters of it.

Take for example a typical commercial building with 7,700m2 of mid-floors. Naylor Love calculated that a steel and concrete ‘comfloor’ would emit 675 tonnes of CO2, whereas the same floor in CLT would store 672 tonnes of CO2 equivalent. One choice emits – one stores.

That 1,347-tonne carbon differential, simply by choosing a CLT floor, is why mass timber is taking off. There are many dozens – maybe hundreds now - of such completed projects all around the country and underway. Tauranga Council’s 8 storey office building is one of the latest, retirement operators Summerset, MetlifeCare and Ryman are all regular users, Fisher & Paykel will be using it for its huge new global head office starting later this year in Auckland, and James Kirkpatrick Group has just announced plans for an 11-storey office tower on K Road using glulam and CLT.

We are actually just catching up with the rest of the world. Numerous such buildings now exceed 20 levels globally, and software company Atlassion in Sydney is part way through the world’s tallest hybrid wood building at 40 levels.

Businesses pay significant premiums to lease such buildings. The mass timber structure on show tells clients, suppliers, staff and investors that the business cares about sustainability and staff wellbeing, for there is a body of research now proving the health and stress reduction benefits of such ‘biophilic’ nature-connected design in offices, hospitals and schools.

Noone wants more regulation, but good regulation can deliver positive outcomes. In this case, polluters will be encouraged to decarbonise their materials and lower their costs, or they will be substituted out for carbon-negative materials made here by Kiwis and supporting the New Zealand economy.

Building for Climate Change is good regulation. It is time for the government to pull the trigger.

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About: Marty Verry is Red Stag Group CEO. Red Stag operates New Zealand’s largest sawmill and mass timber manufacturer, and invests in 5,000 hectares of bio diversified forest land. As seen on Grand Designs NZ, he lives in the oldest building in New Zealand, a 240-year-old wooden barn that started life in New York State and stores carbon to this day.