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The Australian government’s Clean Energy Finance Corporation (CEFC) wants to encourage a massive transformation of timber construction in the real estate sector with $300 million in debt financing for eligible projects across Australia.

The new scheme aims to transform large-scale building construction in Australia, with the potential to reduce construction-related emissions.

It comes after new research from CEFC confirms that transforming our approach to construction is essential if we are to achieve an economy-wide transition to zero emissions.

According to the Green Building Council of Australia, embodied carbon accounted for 16% of Australia’s built environment emissions in 2019 – and without intervention, that percentage will climb to 85% by 2050 – the year Australia is set to achieve net zero emissions in line with the Paris Agreement.

Wood can have lower emissions than traditional steel, aluminum and cement, which are among the most difficult materials to decarbonize. In a 2021 report CEFC has found that massive wood construction can play a role in addressing this challenge, with wood reducing embodied carbon by up to 75% compared to conventional steel and concrete.

CEO of CEFC Ian Learmois says the money will help fund the transition to zero emissions “by encouraging homeowners, developers and builders to use low-carbon engineered wood products in their projects…We’re excited to bring [our] expertise in sustainable construction.

Eligible recipients will be considered on a case-by-case basis and may be in commercial offices, retail, industrial, healthcare, education, multi-residential apartments, retirement homes or student residences.

Eligible projects may include those that:

  • Use low-carbon engineered wood products in large-scale construction
  • Have obtained appropriate material source, accreditation and embodied carbon results
  • Need $20-75 million in CEFC debt financing
  • Are commercially sound, reflecting the rigorous investment requirements of CEFC
  • Comply with CEFC investment policies, guidelines and risk approach

“Innovations in engineered wood products have created new opportunities for mass timber construction to be used in larger projects, creating the potential for immediate and long-term environmental benefits.” said Mr. Learmonth.

“Our real estate-related investment commitments have included demonstration projects capable of delivering best-in-class energy efficiency performance, as well as the effective integration of renewable energy into new and existing buildings,” said Ryan Rathborne, property manager of CEFC.

“Reducing embodied carbon emissions is the next frontier for the construction sector, with enormous potential from development to occupancy.”