Posted on October 27, 2022 by Sue Puckeridge and James King 3

New Building Sustainability Scheme to commence in October 2023

The NSW Government has reformed legislative instruments dealing with building sustainability as part of its Net Zero strategy for greenhouse gas emissions. The amendments will require construction of more cost-effective and lower emission residential, commercial and public buildings. The higher standards are expected to reduce emissions by 150,000 tonnes a year, equivalent to planting 485,000 trees.

To this end and following public consultation, State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 (BASIX SEPP)  has been replaced by State Environmental Planning Policy (Sustainable Buildings) 2022 (SEPP) and the following instruments have been amended:

• the Environmental Planning and Assessment (Development Certification and Fire Safety) Regulation 2021 (Certification Reg); and
• the Environmental Planning and Assessment Regulation 2021 (EPA Reg).

The SEPP and amendments to the Certification Reg and the EPA Reg commence operation on 1 October 2023.

The SEPP is generally consistent with the consultation paper issued in November 2021 and discussed in a previous blog,  but it casts the net wider and now includes non-residential developments.  It will not apply to development applications or modification applications submitted, but not determined by 1 October 2023. The previous BASIX SEPP applies in those cases.

Residential BASIX Development

BASIX standards for thermal performance and energy for all new residential buildings across NSW will increase with the following exceptions (these were excepted because the economic modelling showed that the benefits of energy bill savings would not cover extra upfront construction costs):

• homes in the North Coast climate zone; and
• small apartment buildings up to 5 storeys.

The thermal performance standard will increase from an average of 5.5-6 stars to 7 stars NatHERS rating.  The greenhouse gas reduction standard has increased between 7-11% (this standard varies depending on location and type of residential development proposed). These standards are consistent with the National Construction Code 2022. BASIX water standards have not changed.

A materials index calculator is being introduced into BASIX to calculate embodied emissions (being the greenhouse gas emissions resulting from the materials used to construct a building including emissions from the extraction of raw materials used to construct the building, transporting materials to be manufactured, and the manufacture of the materials used to construct the building). While future benchmarks are signposted, no embodied emissions standard will be imposed on the commencement of the SEPP.

By 1 October 2023, the Secretary for Planning is to publish baseline standards of greenhouse gas emissions, potable water use and occupancy rates over a year as set out in Schedule 1 of the SEPP. Standards for energy and water use are then automatically calculated with reference to the baseline standards, see Schedule 1, clause 2, Table 1 and the Water Use Map under clause 3 of the SEPP. Standards for thermal performance are set out in Schedule 1 Part 2 of the SEPP.

Issues for consent authorities

Development consent must not be granted to development to which the standards specified in Schedule 1 (for erection of a building or change of building use) or Schedule 2 (for alteration of buildings or development for swimming pools or spas) of the SEPP apply unless development is accompanied by a BASIX certificate. The authority must also be satisfied that the embodied emissions attributable to the development have been quantified.

Non-Residential Development

The SEPP applies to non-residential development, other than:

• exempt and complying development under State Environmental Planning Policy (Exempt and Complying Development Codes) 2008, Chapter 2 of the State Environmental Planning Policy (Resources and Energy) 2021 and Chapter 5 of State Environmental Planning Policy (Transport and Infrastructure) 2021;
• development on land wholly within Zones RU1, RU2, RU3, E5, IN3, C1, C2, C3, W1, W2, W3 or W4; and
• development for the purposes of residential care.

In addition to new non-residential buildings, the SEPP will apply to alterations or extensions of existing buildings if the capital investment value of the development is $10 million or more.

The SEPP and Amending Reg have introduced embodied emission measurement and reporting. The provisions apply at both the development application and construction certificate stages. Developers must disclose the quantities of key materials and associated embodied emissions and describe how embodied emissions are minimised.

Issues for consent authorities

The consent authority must consider the six sustainability measures set out at cl 3.2 of the SEPP. These include minimisation of waste from associated demolition and construction and the generation and storage of renewable energy.

In addition to the sustainability measures, new specific standards and reporting requirements will apply to certain non-residential developments listed below.

Large Commercial development 

Large commercial developments are defined as:

• offices with a net lettable area greater than 1,000 square metres;
• hotels and motels with more than 100 rooms;
• serviced apartments with more than 100 apartments; and
• alterations to the above if the development has a capital investment value of $10 million or more.

Additional sustainability measures for such development are:

1. a net zero ready statement – which is a document demonstrating sustainability matters, including that the development source all energy needs from renewables from 1 January 2035 and details of the estimated emissions related to energy use in the building;
2. submission of a NABERS commitment agreement to demonstrate that the development is capable of  achieving its energy and water standards as specified in Schedule 3 of the SEPP;
3. independent verification that the development has met a minimum 3-star NABERS water rating; and
4. independent verification that the developments meet the energy performance required by National Construction Code, after the building is occupied through NABERS.  Offsets will need to be purchased for onsite fossil fuel use and any residual emissions efficiency.

Reports that standard [2] above has been met as well as showing that required offsets have been purchased are required at the construction certificate and occupation certificate stage (see s79A EPA Reg 2021).

The consent authority must consider if the development will minimise the use of on-site fossil fuels and must not grant development consent to large commercial development unless it is satisfied the development is capable of achieving the standards for energy and water use specified in Schedule 3 of the SEPP.

State Significant Development

There are new requirements for State Significant Development applications:

• a net zero ready statement must be included;
• the applicant must demonstrate that the building will not use on-site fossil fuels once the development is occupied; and
• the development must be able to operate without fossil fuels by 2035.

When assessing certain State significant development (health, education and cultural institutions) the consent authority must consider whether the development will minimise the use of on-site fossil fuels in its assessment.

Conclusion

We will provide further updates on the SEPP and matters relevant to the implementation of the above changes as they occur.

If you would like to discuss the issues raised in this post, please leave a comment below or contact Sue Puckeridge on 8235 9702 or James King on 8235 9722.