Energy

Melbourne, Australia

Melbourne has reduced CO2 emissions by 1.1 million tons by making energy audits mandatory

What is it?

Melbourne has reduced carbon dioxide emissions by 1.1 million tons per year, saving companies $34 million every year, simply by requiring large greenhouse gas emitters to complete audits and implement sustainable actions that can be paid back in three-years.

The focus on economic return has delivered immediate and sustained reductions in consumption and CO2 emissions. Its success means it will be expanded beyond energy to also address water and waste, and will be applied to other companies.

How does it work?

The Industry Greenhouse Program was administered by the State EPA and required participants to implement efficiency actions within a three-year or less pay-back period. Over 300 sites were required to undertake levels of assessment and implementation depending on the level of their emissions. The program commenced in 2004 and saw $49 million invested by businesses in internal projects that reduced energy and were implemented and paid back in an average of less than two years.

Under the program medium to large consumers of energy were required to:

• review their energy bills (electricity, gas, LPG, diesel);
• calculate their energy use and associated greenhouse gas emissions, including those from production processes;
• conduct an energy audit to Australian standards;
• identify best practice options and determine payback periods;
• prepare an implementation plan for items with a payback of 3 years or less;
• report on implementation and annual emissions as part of annual reporting to EPA.

Industry was assisted in complying with the program by the preparation of a toolkit – the Energy Greenhouse Management Toolkit – this provides information on compliance with the requirements, conversion factors and best practice information.

Key results

• Industry Greenhouse Program reduced emissions by 1.1 million tCO2e per year.
• 300 companies have reduced their energy bills by a collective $34 million a year.

Next steps

The Industry Greenhouse Program was replaced by the Environment and Resource Efficiency Plans (EREP) in January 2008. EREP is a new regulatory scheme that will apply to Victoria's largest industrial and commercial users of energy and water, not just licensed sites affected by the Industry Greenhouse Program.

Participants will register with the EPA, assess their environmental resource use and waste generation, develop an action plan to improve environmental resource use efficiency and reduce waste disposal and report on implementation of the plan over a period of 8-10 years. Through EREP, companies are expected to reduce their collective energy bills in excess of $34 million a year as savings from addressing energy, water and waste are realised.

Application

The EREP program is easily applied to other cities, through existing planning laws. In Melbourne’s case there are two general ways to regulate energy use: By setting minimum standards, such as requiring double glazed windows and other sustainable products and technologies; and by requiring set pay-back periods where energy efficiencies need to be made. Through these mechanisms it has been possible to engage companies to reduce their energy consumption.