New Carbon Rules Challenge Housing Approvals

House builders are now facing a fresh hurdle in gaining approval for new projects, as Australia takes steps to curb embodied carbon emissions in homes, potentially delaying progress toward its 1.2 million homes target. As pressure mounts to cut carbon produced during construction, industry players must adapt building methods that could clash with cost or supply constraints.

Right now, construction-related emissions are becoming a bigger concern than operational emissions, like heating or lighting. While Australia has long focused on lowering day to day energy use in homes, attention is shifting toward the carbon generated from production, transport and assembly of building materials, emissions that are locked in and can’t be undone once construction is complete.

Some measures are already underway. In New South Wales, planning rules introduced in 2023 began accounting for a building’s embodied carbon. That shift is likely to expand nationwide. The average new home in Australia emits 185 tonnes of construction carbon, more than 7 times the emissions it creates during everyday use over 60 years, even with an electric power source.

Australia has pledged to build 1.2 million homes by June 2029, an effort that demands a record-setting 240,000 new homes each year. However, ticking the boxes for carbon compliance could slow this pace unless builders are able to source lower-emission materials and shift practices quickly. Industry groups say this change will require clearer guidance and standardised benchmarks to avoid confusion.

The move mirrors policies already introduced in Europe, including Denmark’s strict building approval limits based on embodied carbon. The UK plans to do the same, starting this year. While Australia trails these initiatives, industry leaders caution that carbon rules could soon become as important as energy efficiency was two decades ago. Experts suggest adding carbon reporting to national building assessments and targeting a 20% drop in embodied carbon by 2031 as next steps.

Source: Australian Financial Review, Infrastructure Australia, Climateworks Centre