In 1999, transport and warehousing group Toll Holdings built its first facility under its specialist warehousing division when it constructed a custom built warehouse to handle logistics for Nike in Altona in Melbourne’s west.

Twenty years later in March this year, the facility (pictured above) – owned by Stockland – became Australia’s first to achieve whole building certification under the National Carbon Offset Standard (NCOS).

To achieve certification, Toll halved the site’s electricity consumption by upgrading a 2.5 kilometre long conveyor system and retrofitting 1,300 light fixtures with high-efficiency LEDs. Remaining emissions were offset by investing in a forest conservation project in Tasmania and in an energy recovery wastewater treatment plant in Thailand.

The Toll facility is not an isolated case. At its Arndell Park service centre operated by DHL Supply Chain, Frasers Property worked with DHL to achieve whole building NCOS certification through LED lighting upgrades, installation of a 200 kW solar PV system, turning off the warehouse air-conditioning during winter, staggering forklift charging to reduce peak demand and achieving offsets through investing in a forest conservation project in Tasmania and a wind project in India.

Apart from whole building certifications, Frasers has also achieved ‘base building’ NCOS certification for its Building F, 1 Homebush Bay Drive office in Rhodes, NSW, and for its Gateway building in Sydney’s Lee Street. Sustainability consultants Floth achieved base building certification at 69 Robertson Street in Queensland’s Fortitude Valley. NSW local government employees superannuation fund Local Government Super has achieved base building NCOS certification for six of its buildings in Sydney.

Building product makers are joining in. Australia Bricks (Tasmania) has achieved carbon neutral certification for bricks and pavers made at its Longford operation.

One entire precinct has even been certified – the Melbourne Cricket Ground.

Australia’s buildings are going carbon neutral. This raises questions about what carbon neutrality means and how the NCOS standard operates.

Such issues were explored during at a recent Green Building Day event in Melbourne by Sophie Gilles, Senior Policy Officer at the Australian Government Department of Environment and Energy.

At its core, the National Carbon Offset Standard (NCOS) is a voluntary standard to manage greenhouse gas emissions and to achieve carbon neutrality.

The standard has five categories. These include the National Carbon Offset Standard for Organisations, the National Carbon Offset Standard for Products and Services, the National Carbon Offset Standard for Events, the National Carbon Offset Standard for Precints and the National Carbon Offset Standard for Buildings.

For buildings, NCOS certification can be achieved through either an extension of a NABERS Energy rating (whole or base building) or an extension of the Green Star – Performance energy rating. To achieve certification under either pathway, owners must:

  • Measure the emissions from their building
  • Reduce emissions as far as possible; and
  • Offset remaining emissions through eligible offsets.

Emission reductions must be demonstrated through at least a four-star Green Star or NABERS rating. In practice, Gillies says certified projects will achieve ratings which are higher than this.

Eligible offset units can be obtained through a range of sources. These include Australian Carbon Credit Units issued by the Clean Energy Regulator, Certified Emissions Reductions as per the rules of the Kyoto Protocol, Removal Units issued by a Kyoto Protocol country, Verified Emissions Reductions issued by the Gold Standard and Verified Carbon Units issued by the Carbon Standard. In practice, organisations gain offsets by investing in carbon reducing initiatives such as clean energy, forest conservation and energy recovery.

Within the building category, two types of certification are available: whole building and base building. To achieve whole building certification, a building’s entire emissions need to be measured and offset. This includes all emissions from building services (air conditioning, common area external lighting, hot water, lifts, car parking etc.) as well as emissions generated by occupants and their operations. Base building certification requires only emissions from core building services to be measured and offset. It does not take into account emissions generated by tenants.

Gillies draws distinctions between carbon neutral buildings and ‘net zero’ buildings.

As defined by the World Green Building Council, net zero buildings are buildings which are ‘highly efficient and fully powered from on-site and/or off-site renewable energy projects’. Under this definition, buildings must not only be efficient but must also derive all of their energy either on-site or from renewable sources.

By contrast, NCOS recognises that for now, full generation of energy from either on-site or renewable projects is unlikely to be feasible. Therefore, the certification does not require this but instead allows building emissions to be offset through investments in beneficial projects.

This, Gillies says, is important. Whereas powering buildings from 100 percent on-site generation or renewables may be feasible in the future, achieving NCOS certification by reducing emissions and offsetting the remainder is something building owners can do now.

At any rate, she points out that any tonne of carbon emissions saved through offset projects is equally valuable to a tonne of emissions saved through onsite power generation or renewable energy.

With Australia’s buildings contributing about a quarter of our greenhouse gas emissions (according to the Green Building Council of Australia), environmentally friendly buildings are a critical part of meeting our Paris Climate Agreement commitments.

In response, a growing number of buildings are going carbon neutral.