Why This Debate Matters in 2025
Corporate net‑zero pledges are booming, but not all carbon reductions are treated equally. Green Star Buildings v1.1—Australia’s leading sustainability rating—prioritises on‑site abatement over carbon offsets and sets strict eligibility rules for both upfront (embodied) and operational emissions. Misunderstand them and you risk losing up to 10 rating points.
The Green Star Hierarchy of Carbon Reductions
| Level | Acceptable Action | Points Potential | Key Rules |
| 1 | Avoid / Reduce (on‑site energy‑efficiency, material optimisation) | Up to 7 | Must be demonstrated via energy & LCA modelling |
| 2 | Replace / Abate On‑Site (renewables, electrification) | Up to 6 | Rooftop or on‑site PV, heat‑pump HW, no fossil fuel back‑ups |
| 3 | Off‑Site Abatement (renewable PPA, certified EACs) | Up to 4 | 100 % renewable electricity contract ≥ 10 yrs |
| 4 | Offset Remaining (verified carbon credits) | Up to 2 | Credits must be ACCUs or Gold Standard; vintage < 5 yrs |
Tip: Credits can only cover residual emissions after best‑practice on‑site and off‑site abatement is exhausted.
What Qualifies as an Offset?
- Australian Carbon Credit Units (ACCUs) under the Emissions Reduction Fund
- Gold Standard / VCS international credits (max 25 % of total)
- Must be retired in the project’s name and disclosed in the Green Star submission.
What Qualifies as On‑Site Abatement?
- Rooftop or façade PV sized to site load profile
- Battery storage that increases on‑site renewable utilisation
- Full electrification of HVAC, cooking and DHW
- Low‑carbon concrete & green steel that reduce embodied CO₂ by ≥ 20 %
Cost Comparison (2025 Benchmarks)
| Strategy | Upfront CapEx | Annual O&M | CO₂e Reduction (t/yr) | Levelised Cost (AU$/t) |
| LED + controls retrofit | AU$18/m² NLA | AU$0.4/m² | 0.9 | –42 (savings) |
| Rooftop PV 200 kW | AU$1 M | AU$8 k | 250 | 28 |
| Electrify HVAC (VRF) | AU$110/m² | AU$2/m² | 0.6 | 75 |
| Off‑site solar PPA (10 yr) | n/a | AU$0.065/kWh | 300 | 32 |
| ACCU purchase | n/a | AU$31/t | 1 t | 31 |
Negative cost indicates net savings from efficiency.
Mini Case Study – 60 Martin Place, Sydney
The 2024 upgrade combined:
- 400 kW rooftop PV (on‑site abatement)
- 100 % renewable PPA for residual grid electricity (off‑site)
- ACCUs for remaining 6 % operational emissions. Result: 6 Green Star ‘Carbon’ points and 48 % lower lifecycle cost vs offsets‑only scenario.
Decision Framework for Project Teams
- Maximise low‑/no‑cost efficiency first—cheapest $/t.
- Electrify + on‑site renewables until roof area is saturated.
- Use long‑term renewable PPA to cover grid electricity.
- Offset the unavoidable (e.g., refrigerant leakage, minor diesel back‑up) with high‑quality credits.
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