Can a shipping levy affect the growth of Passive House in Australia?
Scott Stewart, Australia-based Certified Passive House Designer
Shayne MacLachlan wrote an excellent piece Carbon emissions all at sea: why was shipping left out of the Paris Climate Agreement? Outlining the carbon emissions generated by the shipping industry, and possible solutions for encouraging technological advances (wind power, better fluid mechanics …) and behaviour change of the industry ($25/tonne carbon levy).
As a kite surfer myself I know the power a modern kite can generate, but as someone who uses shipping as a tool in Australia for also reducing emissions I thought it necessary to do some further research and consultation as to the possible unintended consequences of an industry behaviour changing carbon levy.
The issue of a carbon levy in Australia is incredibly divisive and if introduced needs to be explained through economic modelling and examples as well as environmental benefit.
It is important to consider all industries that are attempting to reducing the demand for electricity and thereby reducing emissions as we may end up pulling in opposite directions when we are trying to achieve the same outcome. A corresponding credit system could be introduced to offset a levy on sea freight movements for elements that are reducing carbon emissions. Examples for the supply and demand sides of the energy equation are explored below.
Supply – Solar Panels and Batteries
Since the 1970s and 1980s the majority of Australian houses have been designed and built less for climate and more for aesthetics (function following form). The advent of relatively in-expensive air-conditioning and cheap electricity has allowed the housing industry to move away from houses designed for climate to houses that control climate. The trend is changing with education and rising electricity prices, cheaper solar panels have enabled more people to participate in the lower carbon economy with the supply of cheaper solar energy. The majority of the manufactured solar panels are imported via sea freight and almost all the components for solar panels as well as new battery technologies are also imported.
According to the Clean Energy Council in 2014, small-scale solar was responsible for 15.3 per cent of Australia’s clean energy generation and produced 2.1 per cent of the country’s total electricity. The typical solar system of 2kW in Australia will prevent between 1.75 – 2.05 tonnes of carbon dioxide entering the environment depending on the mix of carbon generating energy is being offset.
According to EcoTransIT a pallet of solar panels, which would typically be enough for three houses generate 690 kg or 0.69 tonnes of CO2e for transit via Road-Ship-Road from China to Australia , which at $25/tonne = $17.25.
Therefore a credit of $26.5 could be realised when a credit of $43.75 (1.75 x $25) is introduced.
Demand – Passive House in Australia
The demand for energy is also being addressed with the introduction of Passivhaus to Australia. Passive House (Passivhaus) was developed by Wolfgang Feist and Bo Adamson with the first Passivhaus residence build in Darmstadt, Germany in 1990. Passive House, according to the Passive House Institut is a building standard that is truly energy efficient, comfortable, affordable and ecological at the same time, more simply Passive House can be explained in 90 seconds
The Passive House movement in Australia is growing but is still at a fragile and embryonic stage. Overseas experience has shown that for housing the cost increase for Passivhaus is generally 3-5% of build cost. LAB Design has shown if the build cost premium was 10%, for a $300K build in Toowoomba, Queensland at 8% interest rates a passive house is approximately $1000 per year more cost effective when considering both running costs and interest payments.
The major challenge for Passive House in Australia (and other nations far from the Passive House component manufacturing hubs) is and the cost and availability of two key components for a Passive House: high performance windows (typically double glazed in Australia); and Mechanical Heat Recovery Ventilation (MVHR).
In the short term, importation of high performance components is cost-viable to produce the performance outcome and to provide the industry behaviour change incentive by increasing volumes and reducing cost of high performance windows and MVHR.
According to EcoTransIT the windows for the Toowoomba Project generate 870kg or 0.87 tonnes of CO2e for transit via Road-Ship-Road from Europe to Australia , which at $25/tonne = $21.75
However, the PHPP (Passive House Planning Package) calculation of two variants of the Toowoomba project, one to Passive House Standard the other to existing Australian Standards, realises a reduction of over 4.5 tonnes of CO2e per annum.
I discussed the issue with Elrond Burrell, an architect working at the forefront of Passivhaus design in the UK. He provided some insight from his experience in the UK where the Passive House industry is far more developed than in Australia. “In markets where Passivhaus is still relatively new, most of these components need to be imported. Over time, as demand increases, the market matures and local manufacturers can start to meet the demand for components of the highest energy efficiency performance.”
In Australia, the mere mention of a carbon levy without thorough modelling and education will be met with resistance and provoke the perception that it is yet another cost and hence a barrier to Passive House. A $21.75 cost however is quite small, and may be offset with a $112.5 credit. Considering the ongoing emissions reductions of a Passive House, we can’t afford to lose momentum.