CBD block flagged for “zero carbon” pilot as council endorses retrofit plan

By David Schout & Sean Car

Older commercial buildings are the focus of a new City of Melbourne plan to reduce the city’s carbon emissions by more than 60 per cent.

A small pocket of the CBD would prove the perfect testing ground to decarbonise older buildings according to the City of Melbourne, which has stepped up its bid to upgrade heavy-emitting commercial spaces.

In September the council endorsed a “Retrofit Melbourne” plan, which seeks to accelerate the upgrading of existing commercial buildings to reduce local emissions and reach its “net zero by 2040” goal.

While the council is required to reach a target of around 80 buildings each year to undergo a “deep energy retrofit” – for example electrifying buildings, phasing out fossil fuel heating and cooking and improving energy efficiency – the current per-annum rate sits at just seven buildings.

The initiative sought to target commercial buildings, which are responsible for the majority (60 per cent) of the city’s greenhouse gas emissions, particularly heavy-emitting pre-2000-built towers.

Notably, it includes a plan to create “zero carbon precincts”, and flagged the “Turning Circle precinct” (a block bound by Collins, Queen and William streets and the Yarra River) as an ideal testing ground for the push.

The area already has an existing action group called “Neighbourhood Circle”, formed in 2019 by the Immigration Museum and Turning Circle Collective.

The council said areas like this could be crucial in reaching its environmental goals.

“Precinct retrofits will help overcome the lack of a positive vision for what can be achieved,” the Retrofit Melbourne document detailed.

“Owners can be inspired by greening, place making, sharing a local battery and seeing more people walking around.”

“Economies of scale, precinct activation and peer support will incentivise smaller, older, resource constrained buildings to act.”

“Establishing a critical mass of action in one area will also help to overcome some building owners’ lack of access to expertise, capital, information and knowledge.”

Key players have already volunteered to partner with City of Melbourne to pilot the concept, expressing support for geographical aggregation.

“It makes sense to work on a precinct level,” a representative from architecture firm Wardle Studio said during stakeholder consultation.

If an area is at risk like Elizabeth St is with a flood, then it makes sense for people working together to address the risk while activating their areas and upgrading their buildings.

Master Builders Victoria added: “This initiative could help reduce the duplication of assessments and retrofit strategies, reducing costs and providing building owners with a pathway for improved energy efficiency.”

The wider Retrofit Melbourne will largely focus on more than 1500 “mid-tier” commercial buildings, those generally defined as being built pre-2000 with lower levels of energy efficiency than premium or A-grade buildings, and are the biggest contributors to the city’s emissions.

The City of Melbourne has a greater share of mid-tier buildings than any other capital city.

The plan recognises the “significant barriers” of retrofitting mid-tier buildings, such as difficulty in accessing capital and information, limited networking among mid-tier owners and tenants, and a limited capacity of industry professionals.

Past research has indicated that the absence of effective incentives was a key barrier for owners to retrofit their buildings, and the council has committed to exploring options like rate relief.

While commercial buildings are responsible for 60 per cent of the city’s greenhouse gas emissions, residential towers account for just six per cent.

Lord Mayor Sally Capp said Retrofit Melbourne was “a necessary plan to lower emissions, drive down energy bills and make our buildings more sustainable.”

“It’s crucial we act now – working alongside industry, government and academic partners to future-proof our city for generations to come,” Cr Capp said.

“We need to get the balance right – protecting our older buildings, which give Melbourne its character, while accelerating our collective journey towards zero net emissions.”    

“Buildings that are decarbonised are more attractive to tenants and also increase capital value over time - unlocking enormous potential to revitalise underutilised commercial buildings in the city, supporting a thriving city experience and economy.”  

The council’s sustainable building portfolio lead Cr Elizabeth Doidge said it was a “radical” plan needed to “tackle our emissions and transform our city”.

“The City of Melbourne is the first city in Australia tackling this issue with real action,” Cr Doidge said.

“Retrofit Melbourne will deliver an innovative framework – driving collaboration between industry and government partners to fast-track the city’s zero carbon transition.”     

The plan was endorsed by councillors eight votes to one at a September 19 Future Melbourne Committee meeting.

The one councillor to vote against it – Roshena Campbell – argued that the introduction of an emissions cap would create “an uneven playing field” for smaller property owners.

“There’s no doubt that we do need to do work to support the retrofitting of these buildings, but I can’t support one of the regulatory measures,” Cr Campbell said.

“One of the advantages the report identifies is the fact that this measure [emissions cap] will raise revenue and I think we should be very, very cautious about imposing that financial burden on our building owners right now.”

“Although the big players might welcome it as they’re looking to retrofit anyway, the reality is there are property owners who will not be able to afford this. They will either be forced to sell or be forced to bear a burden that, particularly now in these economic conditions, will be a very heavy one indeed.”

But Cr Doidge responded to Cr Campbell’s concerns by saying the council hadn’t yet determined what an emissions cap would look like.   

“We’re not actually voting to implement an emissions cap tonight. We’re basically voting to investigate what an emissions cap would look like if it would work, and how it would work,” Cr Doidge said.

“The result of that might be that an emissions cap doesn’t necessarily have a financial penalty, it may actually mean that those buildings producing over a certain cap, receive financial incentives and supports to retrofit.”

Cr Dr Olivia Ball said the council had an obligation to move swiftly in decarbonising the city amid a rapidly changing climate.   

“My fellow Cr Campbell spoke of the disadvantage to Melbourne property owners and imposing financial burdens on them and her hesitations in doing so,” Cr Dr Ball said.

“But how would these financial burdens compare, or disadvantages compare with extreme weather events that are definitely going to occur and are occurring already?”

“Today is a total fire ban in NSW and we have high bushfire risk in September. It is extremely alarming.”

“We have to consider investments in retrofitting as investments in our future investments in a safe climate, in attempting to reclaim a liveable climate for us and our children and their children. This is happening now. We must move as swiftly as possible.” •