By Dr Jonathan Spear, Chief Executive Officer, Infrastructure Victoria

Up to 70 per cent of Australia’s annual greenhouse gas emissions relate to the lifecycle of infrastructure through operational, enabled, and embodied emissions. This provides the infrastructure sector with a massive opportunity to contribute significantly to reducing Australia’s carbon emissions; and Infrastructure Victoria has just developed a report which outlines how the Victorian Government can update policies, guidelines and procedures to make carbon emissions count in infrastructure decision-making.

The infrastructure sector is changing fast. Technology development is rapid. Most Australian states are dealing with infrastructure booms. National, state and territory-based emissions reduction targets are also changing the way governments need to plan, deliver and manage new infrastructure projects.

There is some concern that measuring carbon in infrastructure could limit new solutions or add significant cost.

But industry groups and businesses say they are ready and willing to respond to clear government direction about the level and pace of infrastructure decarbonisation.

Markets around the world are demanding more low carbon builds and products. Industry sees the need for urgent action to remain competitive.

Last year, the Victorian Government cut its emissions reduction target to net zero emissions by 2045. This is five years earlier than the Australian Government’s target and ahead of other state and territory targets.

As infrastructure delivery will play a key role in meeting the target, the government requested advice from Infrastructure Victoria. We are the state’s independent infrastructure advisory body. We released our advice on opportunities to reduce the greenhouse gas emissions of future public infrastructure earlier this year.

Our research finds the state’s multi- billion-dollar pipeline of new build infrastructure presents a big opportunity for the Victorian Government to shape the design of infrastructure, the materials used in construction and the jobs created in a low carbon economy.

It also finds decarbonising infrastructure can reduce project costs.

The United Kingdom Treasury’s Infrastructure carbon review concluded that ‘reducing carbon reduces cost’ when decarbonisation is prioritised early and over the long term. It found that reductions in carbon of up to 39 per cent by supply chains achieved average reductions in capital expenditure of 22 per cent.

Research by the Clean Energy Finance Corporation suggests that changing materials and designs in infrastructure alone can reduce costs by up to 3 per cent and achieve up to 18 per cent reduction in embodied carbon.

Our research found that current efforts to reduce carbon across the lifecycle of infrastructure projects are inconsistent. There is no integrated approach to manage carbon emissions over the infrastructure lifecycle in Victoria.

Our advice outlines a path for government to make reducing the emissions of infrastructure the new business-as-usual.

We need fast action to get the benefits of a low carbon economy and meet Victoria’s net zero target. Other governments across Australia can also take this chance to act.

Three principles and ten recommendations (see below) can guide government action.

Prioritising non-build or low build solutions can minimise new construction. It also avoids emissions associated with building and running new infrastructure. Projects using low build solutions usually have lower carbon emissions across their lifecycle.

For example, the Victorian Department of Transport and Planning’s Smarter Roads project improves the traffic light network first, before building new roads. Offsite or modular construction, such as classrooms for schools, can be cheaper and produce less emissions than on-site builds.

Victorian guidelines already suggest departments and agencies consider non-build options in business cases. But government project teams told us that the existing culture favours new build solutions. It does not encourage teams to prepare options that meet service needs without a new build.

To support culture change, government ministers and senior executives should give clear direction about prioritising non-build or low build solutions. When departments and agencies consider carbon reduction at the beginning of a project, there is much more opportunity to reduce carbon impacts.

Our advice also recommends an aligned approach to decarbonisation across Australian governments. Industry can adopt proven approaches quickly and with less risk. This can help governments move faster towards decarbonisation targets.

Using existing tools, research and resources also reduces time and investment costs. For example, our advice recommends the government adopt a full approach to measure and manage carbon emissions like the UK’s PAS 2080:2023 Carbon management in buildings and infrastructure standard.

Aligning approaches across borders reduces the burden on industry. Business can put more focus on delivery of effective decarbonisation strategies. By promoting national consistency, Victoria is also helping to build capability within industry.

In March, Infrastructure Australia released its guide for emission targets in infrastructure proposals. Infrastructure Australia will reflect Australia’s emissions reduction targets in its advice to government, infrastructure plans, audits and evaluations. The national target of net zero by 2050 will also apply to all proposals considered by Infrastructure Australia.

The guidance also introduces a carbon value for business cases. The use of carbon values is common in many
other parts of the world. It means that carbon shows up as a cost line item in the business case. This helps to inform project decisions to reduce carbon, but it is not an actual financial cost.

States or territories with higher emissions targets, like Victoria, may need to use higher carbon values for their own budget processes. It is common to apply a range of values or sensitivities in business cases to test against changing conditions. We expect any gap between national and state carbon values will reduce over time as Australia gets closer to net zero.

Our advice also recommends the Victorian Government clarify the scale and pace of infrastructure emissions reduction to give confidence to industry. This can encourage businesses to propose or take up options to reduce carbon in the large pipeline of infrastructure projects underway.

There are clear benefits of avoiding carbon now, before it becomes more costly.

If infrastructure managers look at embodied carbon in the project design phase, they can compare the costs and benefits of different materials and methods before a sod is turned. Digital engineering can show large areas of embodied carbon and find ways to save. This can often result in dollar savings as well.

Greater use of recycled materials can reduce demand for new materials. It also avoids the costs and carbon emissions of extraction and processing. For example, crushed recycled concrete can produce up to 65 per cent fewer embodied carbon emissions than quarried materials. Increasing the use of recycled materials creates demand and new jobs.

Decarbonising infrastructure is critical to our efforts to tackle climate change. But it is also a chance to do things differently, including doing more with less.

Governments and businesses that make decarbonisation the new business-as-usual have the most to gain from the transition to net zero.

Infrastructure Victoria’s ten recommendations to the Victorian Government to reduce greenhouse emissions from public infrastructure are as follows:

  1. Develop a comprehensive approach to measure and manage carbon emissions modelled on the UK’s PAS 2080:2023 Carbon management in buildings and infrastructure standard.
  2. Identify and adopt carbon measurement tools and deliver training across the Victorian Government.
  3. Value carbon using a target consistent approach and calculate required values to achieve Victorian emissions reduction targets.
  4. Update business case guidelines and templates to integrate emissions reduction.
  5. Measure carbon in infrastructure cost benefit analysis.
  6. Update procurement frameworks and guidance to promote carbon reduction in tenders.
  7. Update standard form contracts to include minimum carbon reduction requirements and incentives for further reductions.
  8. Establish carbon management prequalification requirements for government contracts.
  9. Support industry to develop zero or low emissions solutions by testing alternative materials and adopting performance-based standards.
  10. Update assurance processes to include carbon emissions.
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