Building act changes bring hope for the future

In December 2022, the New Zealand Government announced that it will be phasing in a significant ‘suite of changes’ to the Building Act, in an effort to reduce waste and lower emissions from the building and construction sector, as part of the larger goal of reaching ‘net zero’ carbon by 2050.

The announcement is welcome news for the environment. But also a major step towards better buildings for New Zealanders, as it promises to give owners and occupants a new framework for understanding and more effectively managing energy use, while also proposing regulations for waste that could reduce construction costs, and encourage more efficient practices and supply chain resilience.

Climate change is real, and so too is the devastation it brings. Which is why a growing number of countries around the world, including New Zealand, have joined The Paris Agreement and are committed to achieving carbon neutrality in the next few decades. It is a large-scale task, requiring determined action that starts right now. The proposed changes to the Building Act are a part of our own Government’s response to this.

According to the website, the amendments will:
  • make it mandatory for new and existing public, industrial and large-scale residential buildings (such as multi-storey apartment buildings) to hold energy performance ratings
  • require those intending to undertake certain building or demolition work to have a waste minimisation plan
  • change the principles and purposes of the Building Act, to clarify that climate change is a key consideration.*

“These proposals will help us to build a better future for generations of New Zealanders,” says Minister for Building and Construction Megan Woods. “Energy performance ratings could help lower energy bills and reduce costs, by providing building users with the tools to better manage peak electricity demand.”

“A higher rating could even increase a property’s value or rentability” she adds. “One study found an 8% increase in asset value of energy performance rated buildings over those without ratings.”

Based on the global experience, this certainly seems to be the case. Denmark was one of the first countries to introduce mandatory energy performance ratings for buildings, after which, real estate agents reported that highly rated energy efficient homes were easier to sell. Studies conducted in Australia, Ireland and across the United States showed similar results – i.e., that ultimately a higher energy efficiency rating had a positive effect in both rental prices and sale price of properties.**

Energy efficiency improvements also have the potential to benefit building occupants and tenants.

Raising the quality of an office or rented space through energy efficiency can enhance thermal, noise and light comfort, improve health, safety and security, and reduce energy bills and operational costs. These benefits to the tenant can, in turn, lead to greater satisfaction, ultimately resulting in lower tenant turnover and reduced vacancy rates.

What is The Paris Agreement?
The Paris Agreement is a landmark international accord that was adopted by nearly every nation in 2015 to address climate change and its negative impacts. Its aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2˚C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5˚C. The agreement includes commitments from all major emitting countries to cut their climate pollution and to strengthen those commitments over time.

Currently, around 100 New Zealand buildings and tenancies are using the NABERSNZ*** rating to benchmark their energy performance. Making this mandatory within the next few years will impact building owners, however for most “it’s as simple as installing a metering system and taking stock” says Green Building Council chief executive Andrew Eagles.

“There may be some upfront costs to get set up,” he adds, “but it’s going to help save a great deal on energy bills in the long run.”

Our own NABERSNZ programme is an adaptation of the Australian version, which has been compulsory for many office buildings in our neighbouring country for years. Since it was created two decades ago it has helped users save over AUS$1.4 billion in energy bills, and 9 million tonnes of CO2 emissions.****

As well as mandatory ratings, the Government’s Building Act amendments also propose mandatory waste minimisation plans for building and construction activities. Reducing waste has clear benefits in terms of carbon reduction, but also helps projects reduce costs through wasted materials and reuse.

“By some estimates, construction waste accounts for up to half of all the waste which goes to landfill nationally” says Megan Woods. “Having a reduction plan in place will encourage us to confront the amount of waste produced on-site, design with waste in mind, reuse building materials, incentivise recycling, and increase the uptake of local waste diversion schemes.”

The bill’s changes are expected to be implemented through regulations, which would be phased in from 2024 after public consultation. They align with the Emissions Reduction Plan, have been consulted on by the Climate Change Commission, and are also backed by leading businesses throughout New Zealand and many major property and construction companies.

Described by Andrew Eagles as “a huge moment for better, more sustainable buildings”, early analysis indicates that these proposals could support emissions reductions of 12.6 Mt CO2-e (megatonnes of carbon dioxide) between now and 2050.


*** NABERSNZ is an adaptation of the National Australian Built Environment Rating System (NABERS), considered to be a world-leading energy rating tool for commercial buildings.