ELIGIBLE RESIDENTIAL
BUILDINGS
AUSTRALIAN STATESNew SouthWales

Low Carbon Buildings Criteria
under the Climate Bonds StandardVictoria
Tasmania

What are the Low Carbon
Buildings Criteria?
They are the requirements(or Criteria) that buildings(or a portfolio of buildings)
must satisfy to be eligible for nominated use ofproceeds in a Certified Climate Bond.
Any bond being Certified must also meet thereporting and transparency requirementsof the overarching Climate Bonds Standard.
This brochure outlines the Buildings Criteria forresidential buildings in Australia. For full details
on the methodology and requirements, see thedetailed Criteria document.

When is a residential building in Australia
eligible for Certification?
It is eligible for certification if:• It meets the net-zero carbon emissions

trajectory (a.k.a. emissions hurdle rate)

New South Wales Proxy
Residential buildings are eligible
for certification if they meet theapproved proxy
Figure 1 shows the proxy requirements
for residential buildings in New South Wales.
Any building is eligible if it meets the proxyrequirements for the mid-point of their bond.

• It has or will undergo an upgrade orthe context of RMBS transactions Maximum
Weighted Average Life can be substitutedfor Maximum Tenor.

How are hurdle rates expressed?

How to demonstrate a building meets therelevant emissions hurdle rate:

retrofit which reduces its emissions intensity by
30-50% (depending on the tenor of the bond)

Hurdle rates represent rapid decarbonisation
trajectories aligned with the goals of the Paris
Agreement to limit global warming to no morethan 2 degrees above pre-industrial levels, andideally no more than 1.5 degrees.
Local building codes have been reviewed todetermine which codes are in line with these
trajectories, and therefore buildings approved
under those codes can automatically be deemedcompliant and eligible for certification.
Maximium tenor limits have, therefore, been
set on these bonds based on when the relevantbuilding code was introduced and for how
long that code will remain able to deliver thenecessary energy efficiency to ensure that thedwelling is positioned as best in market. Within

See boxes below for Residential buildings in New
South Wales, Victoria and Tasmania.
Residential buildings outside of theselocations, are also eligible for certification if
they are consistent with the requirements of an
appropriate global proxy. See here for further
information on appropriate proxies.

Want more information?
Contact standards@climatebonds.net
regarding the Low Carbon Building Criteria

Figure 1. All houses and apartments

AfterJune
2004

AfterJuly
2005

BASIX
Energy40

Houses in the Sydney
Local Area

Other Houses

Apartments

Note: For all states if the approval date is unknown it can be estimatedas being 18 months prior to completion.

Low Carbon Building Criteria: Australian States Climate Bonds Initiative1Victoria Proxy

Figure 2. All houses and apartments

Residential buildings are eligible
for certification if they meet theapproved proxy.
Figure 2 shows the proxy requirements
for residential buildings in New South Wales.
Any building is eligible if it meets the proxyrequirements for the mid-point of their bond.

AfterMay2011&6 StarNatHERS

Note: For all states if the approval date is unknown it can be estimated as being 18 months
prior to completion.

Tasmania Proxy

Figure 3. All houses and apartments

Residential buildings are eligible forcertification if they meet the approved proxy.
Figure 3 shows the proxy requirements forresidential buildings in Tasmania.
Any building is eligible if it meets the proxyrequirements for the mid-point of their bond.

AfterMay2013&NCCBCA
2013

Note: For all states if the approval date is unknown it can be estimated as being 18 months
prior to completion.

Climate Bonds notes that whilst the residential
proxies above have been determined to be thebest currently available in the market, they
have some limitations.
NatHERS only measures the thermal efficiencyof the building envelope and does not assess theenergy efficiency of lighting, heating and coolingplant, etc. These elements are however addressedwith the NCC BCA. Therefore NatHERS is used
only when it has been delivered together withcomplimentary requirements of the NCC BCA.

limitations in the methods of assessment andalso limitations in compliance assurance throughthe construction process.

Both BASIX and NatHERs assess design
potential and do not predict operational energy
consumption. There is acknowledgement that
there is often a performance gap between therating and actual performance caused by both

Climate bonds will review the proxies forresidential in Australia on a bi-annual basis toensure that any proxies remain the best available
in the market.

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a nancial organisation
or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites. The ClimateBonds Initiative is not endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should anyinformation in this communication be relied upon in making any investment decision. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment anindividual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate BondsInitiative public communication. © Climate Bonds Initiative 2018

Low Carbon Building Criteria: Australian States Climate Bonds Initiative2