EUAs predicted to generate $4.5 billion in investment
Sustainable Melbourne Fund (SMF) today welcomes the release of the EUA Finance for the Regions Summary Report. Comprising the findings of a collaborative study conducted by the Eastern Alliance for Greenhouse Action (EAGA) and the Western Alliance for Greenhouse Action (WAGA), the report quantifies potential economic benefits of retrofitting Victoria’s building stock using Environmental Upgrade Agreements (EUA).
“The findings of this report are emphatic. EUA finance is estimated to make over $4.5billion of investment commercially attractive and create over 18,000 jobs across Victoria,” said CEO Sustainable Melbourne Fund, Scott Bocskay.
“This report makes a compelling business case for expanding EUAs across Victoria.”
EUAs are a tripartite agreement between a building owner, a financial institution and a Local Government Authority (LGA). They are targeted to retrofitting buildings used for commercial purposes, replacing end-of-life energy, water, cooling, heating and lighting systems with low emissions technology and unlocking potential for industrial scale solar systems.
The report highlights how barriers, such as limited access to finance and split incentives, can restrict retrofits from occurring and consequently inhibit energy efficiency. By employing an EUA, property owners can secure finance at attractive terms.
Due to legislative constraints, EUAs are currently only available in the City of Melbourne. They are also available in some New South Wales municipalities. EUAs have been referenced in the Victorian government’s Plan Melbourne strategy to address Melbourne’s infrastructure, housing, employment and environmental challenges to 2020. Final submissions for Plan Melbourne were due Friday, 6 December.
“With a minor amendment to the Local Government Act, EUAs will be available to all commercial property owners and tenants across Victoria,” said the report’s author, Scott McKenry, Regional Coordinator of the Eastern Alliance for Greenhouse Action.
“Experience demonstrates that energy efficiency retrofits are one of the most cost effective opportunities to deliver greenhouse gas reductions. Lack of access to finance and split incentives have often prevented these retrofits from occurring, but EUAs have emerged as a smart, market-based mechanism to overcome these barriers while reducing greenhouse gas emissions from inefficient buildings,” said Mr McKenry.
“Across the EAGA region alone, EUA finance can unlock over $700 million of investment and create over 2,800 jobs. As Victoria’s manufacturing hub, our region could enjoy significant productivity outcomes through building upgrades.”
Mr Scott Bocskay said more than half (53%) of the City of Melbourne’s carbon emissions come from commercial buildings, making environmental upgrades a priority for achieving emissions reduction targets. SMF developed the EUA model and is currently working with municipalities in three states on their expansion.