Case of the month - Melbourne

JUNE 2013

Policy   Melbourne’s 1200 Buildings Program
Melbourne City Council

Launched in 2010

Territorial scope
City of Melbourne

Target buildings  




Public buildings

 New buildings    

Private buildings
 Existing buildings
 Industrial, services, etc.

Main targets

  • Improvement of energy efficiency by around 38% (383,000 tonnes of greenhouse gas emissions every year, equivalent to 7.6 million black balloons) in the commercial building sector;
  • Reduce potable water use in the commercial sector by 5,000,000,000 litres;
  • Create 8.000 green jobs – engineers, environmental and sustainability consultants, builders, surveyors and many other industry professionals;
  • Drive 1.401060927,48€ ($2 billion) of private sector reinvestment;
  • Contribute significantly to Melbourne become a carbon neutral city.

The City of Melbourne’s 1200 Buildings Program was launched with the aim to catalyse the retrofit of commercial, non-residential buildings in the municipality of Melbourne. The program encourages and supports building owners, managers and facility managers to improve the energy and water efficiency of commercial buildings in the municipality of Melbourne, by providing information, tools, educational seminars and events. It is also a key component of the City’s Zero Net Emissions strategy which aims for a carbon neutral municipality by 2020.
The retrofitting actions benefits the buildings owners to improve environmental performance by supporting greater attraction and retention of tenants and by future proofing assets against rising energy costs. 

Program Requirements

To join the 1200 Buildings Program the owners of commercial and non-residential buildings within the City of Melbourne’s municipal boundaries, must sign a proforma commitment letter. This commitment is sent to the Lord Mayor of Melbourne outlining the owner’s commitment to achieve a 38% improvement in energy efficiency and a reduction in potable water use within their building.

Under this commitment framework, each signatory involved in the process will follow the summarized stages:

  1. Develop a baseline assessment – Determining the building environmental performance and a benchmark for energy and water building consumptions;
  2. Establish a Retrofit Action Plan to improve the buildings performance – selection of energy/water/dollar savings measures and the payback periods;
  3. Undertake retrofit works – implementation of the energy/water efficiency measures established in the Retrofit Action Plan;
  4. Annual update – Yearly progress report;
  5. Complete works – Completion of retrofit works and training of building tenants/managers and contractors for the building operational efficiency optimization;
  6. Final assessment – Re-assessment of the building operational efficiency and diagnosis of continuous monitoring actions for the optimal operational efficiency.

Environmental Upgrade Finance

To overcome the key barrier of access to finance environmental retrofits, the City of Melbourne has worked closely with the Australian financial institutions to develop an innovative finance mechanism called Environmental Upgrade Charge.

The Environmental Upgrade Charge is available through the 1200 Buildings Program and is administered by the Sustainable Melbourne Fund on behalf of the City of Melbourne.

Under an environmental upgrade agreement, the funds advanced by the Sustainable Melbourne Fund (financier) to a building owner for retrofitting process are recovered by the City Council through a charge linked to rates collection – Environmental Upgrade Charge. This charge received by the Council is then forwarded to the Sustainable Melbourne Fund, in its paper of financier entity.

The environmental upgrade finance allows the City, in partnership with Australian financial institutions, to enter into voluntary environmental upgrade agreements with building owners to finance environmental upgrades, thus overcoming the associated risks and barriers to financiers funding efficiency projects.


Program results

Until now the program has reached the following successful steps:

  • 3 environmental upgrade agreements have been signed in Melbourne for projects with a total value of 3.432599272,34€ ($4.9 million), including installation of a trigeneration system, high efficiency chillers, cooling towers, lighting system upgrades, heating and air conditioning units and controls, occupancy sensors and double glazing;
  • Register of 53 public signatories to date including large commercial groups: GPT Group, ING, Stockland, and Asia Pacific Group;
  • A set of further 150 buildings are considering or in the process of retroffiting.
  • Production of several support materials in the form of advice sheets, video/written case studies and seminars to provide valuable information to building owners and managers considering retrofitting and environmental upgrade finance;
  • Distinguished with two prestigious awards – Global Energy Efficiency Forum Award for Leadership in Energy Efficiency, and the United Nations Association of Australia World Environment Day Sustainability Award.