The Clean Energy Finance Corporation (CEFC), an organization responsible for investing $10 billion in clean energy projects on behalf of the Australian government, is seeking to substantially cut construction-related emissions with a new $214 million program to encourage the use of mass timber in new building projects. 

Called the Timber Building Program, the initiative is based on the need to transform building practices in order to achieve an economy-wide transition to net-zero emissions. The money will be available in debt financing for eligible projects across Australia, including commercial offices, retail, industrial, healthcare, and education undertakings. Finance may also be available for multi-residential apartments, senior living, and student accommodation projects. 

Eligible projects will be considered on a case-by-case basis and may include those that follow the following criteria:

• Use low-carbon engineered wood products in large-scale construction 

• Have secured appropriate materials source, accreditation, and embodied carbon outcomes 

• Require $20 million–$75 million in CEFC debt finance 

• Are commercially sound, reflecting the rigorous investment requirements of the CEFC 

• Comply with the CEFC Investment Policies, Guidelines, and Risk Approach 

“Timber has been used in construction for generations. 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 CEFC CEO Ian Learmonth. “Our new Timber Building Program will help finance this transition by encouraging owners, developers, and builders to use lower-carbon engineered wood products in their projects.”

As noted by the CEFC, embodied carbon accounts for approximately 28% of emissions in building and construction globally and is expected to produce half the emissions of new construction by 2050. Widely used building materials, such as traditional steel, aluminum, and cement are major culprits behind emissions, so seeking alternatives has been a primary area of focus in Australia. 

In its Australian Buildings and Infrastructure: Opportunities for Cutting Embodied Carbon report, the CEFC found that mass timber construction could reduce embodied carbon by up to 75% compared to the use of conventional steel and concrete.

“The time is right for the development of more timber buildings across the property sector. By locking in mass timber construction in new projects, we can also help develop local skills and experience, supply chains and delivery capabilities, all of which can catalyze more timber-based building activity into the future,” said CEFC Director of Property Investment Ryan Rathborne. “We are already seeing early adopters incorporating these new materials in their construction. Our goal is to accelerate this trend, working with the property sector to create a cleaner, more sustainable built environment.”

Similar government measures can be seen elsewhere, such as France, where in 2020 it was announced that all new public buildings are required to be made of at least 50% wood.