The building and construction sector accounts for around 20% of New Zealand’s carbon emissions, through the energy and materials used in buildings [1]. The Ministry for the Environment’s Emissions Reduction Plan (ERP) identifies reducing the embodied carbon of buildings as a key construction sector objective to meet our national emissions reduction commitments. Transitioning to carbon-reducing, innovative “green” building products will be essential to meet these targets.

There are several government reform programmes underway to tackle the various barriers to importing and using green building products in New Zealand. Some of the suggested reforms include streamlining the Building Consent System, increasing competition in the building supplies market, and introducing green standards that cap embodied carbon emissions to the Building Code.

The next steps in the reform process depend on the Government’s response to the Commerce Commission recommendations, along with the outcomes from the Ministry of Business Innovation and Employment’s (MBIE) public consultation on its review of the Building Consent System.

Barriers

The Commerce Commission, MBIE and Ministry for the Environment have all identified barriers to importing, gaining compliance for, and using green building materials in construction projects. These include:

• The complexity and ambiguity in the Building Code and Consent System – 67 separate Building Consent Authorities (BCA) make individual compliance decisions resulting in variability and unpredictability. There is also a lack of clear consent pathways and limited sector guidance, along with high testing and compliance costs, and BCA capacity constraints.  
• Incumbent suppliers benefit from experience navigating the compliance system, greater influence with regulatory bodies and lower BCA scrutiny of their “tried and tested” products.
• Architects, engineers, designers and builders have a familiarity bias for products they know and trust.
• A skills and education gap in innovative building supplies and processes, particularly in Computer Aided Design and On-Site Manufacturing (OSM).
• Unique New Zealand standards, such as timber chemical treatment requirements, prevent suppliers from importing materials from some source countries.
• Quantity-forcing rebates make it difficult for new suppliers to access distribution channels. Merchants can be reluctant to stock competing products.

Reform

With the barriers well canvassed, the need for reform is clear. Several government initiatives are underway, and additional recommendations have been made.  

Commerce Commission market study

In its recently published final market study report into residential building supplies, the Commerce Commission makes several recommendations to support competition, entry and expansion in the building supplies market:     

Enhance the regulatory system

• Introduce competition as an objective to be promoted in the building regulatory system.
• Create clearer compliance pathways for a broader range of building supplies, including greater compliance alignment with international standards and expand the range of product certification schemes compliant with the Building Code.
• Reduce compliance specification by brand and provide more guidance on what constitutes a “minor variation” under the Building Code to allow more product substitution.
• Increase flexibility in the MultiProof scheme (a faster consenting process for pre-approved designs), by allowing minor changes to the designs or by providing a more detailed list of permitted MultiProof design variations. 

• Establish a national system to share information between BCAs, designers and builders on product specifications and compliance.
• Create an education and mentoring programme to ensure consistency of consenting and provide guidance and training to BCA staff, designers and builders on compliance best practice.
• Coordinate and boost OSM as an area that has the potential to increase productivity and innovation by streamlining consenting, bypassing intermediaries and increasing BCA confidence and consistency in approach to new products used at scale rather than small individual projects.

• Promote compliance with the Commerce Act, including discouraging the use of quantity-forcing rebates, to promote alternative suppliers and support merchants stocking more than one product within a category. Since the release of the final market study report, Fletcher Building’s Winstone Wallboards has announced it will suspend all GIB rebates.
• Review the use of land covenants, exclusive leases and contractual provisions. This point has been raised in recent market studies and the Commerce Commission will likley investigate this point further.

Building Consent System review 

MBIE is in the early stages of reviewing the Building Consent System. Public submissions on its Issues Discussion Document closed in September and MBIE is likely to propose a reform programme in 2023.  The reforms are expected to streamline and simplify compliance pathways.

Building for climate change

In August 2020, MBIE released the Whole-of-Life Embodied Carbon Emissions Reduction Framework as a part of its Building for Climate Change programme. The framework proposes ways to reduce the carbon intensity of construction materials along with looking to achieve new build and material efficiency, where buildings are resilient, built to last, and waste and demolition is minimised in construction projects.

By 2025, the programme aims to:

• introduce green standards to the Building Code;
• require the sector to record embodied and operational carbon emissions of buildings; and
• cap embodied carbon emissions, in line with ERP targets.

Other regimes that support green construction include the NZ Green Building Council’s Greenstar/Homestar certifications and ongoing research and resources from the Building Research Association of New Zealand (BRANZ).

Considerable policy work has been completed to identify the key sector constraints to importing, gaining compliance and using carbon reducing building products in construction projects. The next step will be implementing these reforms to create a smoother compliance process and encourage developers, builders and designers to shift from the “tried and true” materials, in favour of more sustainable, innovative products. 

If you have any questions or would like to discuss any of the above matters further, please contact one of our experts.
 

Footnote

[1] Whole-of-Life Embodied Carbon Emissions Reduction Framework at 4
 

This article was co-authored by Sam Nicholson, a Summer Clerk in our Construction and Infrastructure team.