Update on new preliminary energy efficiency proposed changes to the Building Act

13 December 2022

The Government is proposing new changes to the Building Act to create mandatory energy performance rating requirements for buildings, and waste minimisation plans for construction and demolition projects. These changes set the foundation for future climate change work outlined in the Government’s Emissions Reduction Plan (ERP), released by the Ministry for the Environment on 31 May 2022.

The proposed amendments to the Building Act 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.

Energy performance rating requirements

Energy performance ratings could help lower energy bills and reduce costs. Providing building users and owners with an assessment of current energy use and practical options will help reduce their energy bills and better manage peak electricity demand. A higher rating is expected to increase a property's value or rentability. Ready access to information on a building’s energy performance will inform decisions by prospective owners and tenants and incentivise current building owners to take action to improve their building’s energy efficiency. The changes will be phased in over time and will initially apply to larger public, industrial and commercial buildings, and large-scale residential buildings. The changes will be introduced to other buildings at a later time.

Mandatory waste minimisation plans

The proposed mandatory waste minimisation plans would require specific activities during building and construction.

Construction waste accounts for up to half of all the waste which goes to landfill nationally. MBIE is of the view that having a reduction plan in place will encourage the sector to confront the amount of waste produced on-site, design with waste in mind, re-use building materials, incentivise recycling, and increase the uptake of local waste diversion schemes.

Designing with waste in mind and reducing the over-ordering of building supplies will also help mitigate short-term challenges such as supply chain constraints as it frees up building materials rather than converting them to waste.

The building and construction sector is a significant contributor to greenhouse gas emissions which are emitted when building materials are produced, buildings are constructed, and energy is used in buildings during their operation. Early analysis indicates that these proposals could support emissions reductions of 12.6 Mt CO2-e (megatonnes of carbon dioxide) between now and 2050. For comparison, this equates to nearly 19,000 plane trips between Wellington and Auckland per year until 2050. The changes would contribute to New Zealand achieving its climate change goals, including net zero carbon by 2050 as established by the Paris Agreement.

The Building for Climate Change team at MBIE is now working to support the detailed drafting for the new Bill, for introduction early next year. There will then be a Select Committee process that we will be able to participate in. As the proposed Bill will be empowering legislation with much of the detail to be included in regulation, MBIE will also be starting to develop some more specific options for regulations, which we will be involved in. Any changes will be phased in from 2025 onwards.

Master Builders Policy & Advocacy team and representatives of the Residential Working Group have participated in the legislative reform working group established to discuss the issues and solutions. The team will continue to meet regularly with the Building for Climate Change legislative reform team at MBIE to help shape the proposals. We will keep you updated on the progress. 

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Proposed Building for Climate Change amendments released |Building Performance