Embodied Carbon Reporting in NSW 2026: How the March Technical Note and NABERS Tool Change Your DA Process

From 1 October 2023, every new residential development application in NSW has been required to report embodied carbon emissions through the BASIX Materials Index. Non-residential developments face a parallel obligation under the Sustainable Buildings SEPP 2022. In March 2026, the NSW Department of Planning, Housing and Infrastructure (DPHI) released the Embodied Carbon Technical Note, providing the operational detail that practitioners had been waiting for since the policy was enacted. Combined with the launch of the NABERS Embodied Carbon rating tool in November 2024, the framework for measuring, reporting, and — increasingly — reducing embodied carbon in NSW construction projects is now substantially complete.

For architects, developers, and builders working in NSW, the practical question is no longer whether embodied carbon reporting applies to your project, but how to integrate it efficiently into your existing DA workflow without blowing your programme or your budget. This guide breaks down the two compliance pathways, the key thresholds, the March 2026 Technical Note changes, and what the NABERS Embodied Carbon tool means for non-residential projects.

What Is Embodied Carbon and Why Does NSW Regulate It?

Embodied carbon refers to the greenhouse gas emissions generated across the lifecycle of building materials — from raw material extraction and manufacturing through to transport and construction. The current NSW reporting framework focuses on A1–A3 emissions, commonly called "cradle-to-gate": raw material extraction, manufacturing processes, and transport to the manufacturing facility. This is distinct from operational carbon, which covers the emissions from running a building once it is occupied.

The regulatory push is driven by a stark reality: as Australian buildings become more energy-efficient and the electricity grid decarbonises, embodied carbon's share of a building's lifetime emissions is rising sharply. The Green Building Council of Australia has modelled that for a new all-electric home today, upfront embodied emissions are already more than seven times the operational emissions over a sixty-year life. At a national scale, Infrastructure Australia's Embodied Carbon Projections report found that construction activity will produce between 37 and 64 million tonnes of CO2e in upfront embodied carbon annually through to 2026-27, accounting for around 10% of national emissions. Three materials — concrete, steel, and aluminium — account for more than 70% of a typical building's embodied carbon footprint.

NSW has positioned itself ahead of the national construction code. While the NCC 2025 (released 1 May 2026) published voluntary embodied carbon provisions as guidance rather than mandatory code text, NSW's Sustainable Buildings SEPP 2022 already requires quantification and reporting for both residential and non-residential developments. NSW has deferred adoption of NCC 2025 to 1 May 2027, but the state-level requirements are already in force and apply now.

Two Compliance Pathways: BASIX for Residential, NABERS for Non-Residential

The NSW framework splits embodied carbon reporting into two distinct pathways depending on whether your project is residential or non-residential. Understanding which pathway applies — and the thresholds that trigger reporting — is the first critical step in your DA preparation.

Residential Pathway: BASIX Materials Index

The BASIX Materials Index uses grouped material categories and standard emissions factors, reducing the amount of detailed reporting required compared to the non-residential pathway. Applicants quantify key structural and envelope materials — foundations, frame, envelope, floor and wall finishes — apply the grouped emission factors within the BASIX online tool, and the system generates a compliance certificate that is lodged through the NSW Planning Portal. The Materials Index is mandatory for all new residential DAs and for major renovations above $50,000. It does not apply to alterations and additions, or to pools and spas, which have separate BASIX water and thermal requirements.

Importantly, while the BASIX Materials Index currently requires measurement and reporting of embodied carbon, it does not yet impose a numerical limit or reduction target. The NSW Government has confirmed that a limit is under review, with the policy direction pointing toward performance thresholds — potentially including carbon caps — by approximately 2028–2029. The March 2026 Technical Note signals that the shift from passive carbon accounting toward active decarbonisation is already beginning.

Non-Residential Pathway: NABERS Embodied Carbon Rating

For non-residential developments above the $5M threshold (new builds) or $10M threshold (major renovations), compliance is achieved through the NABERS Embodied Carbon rating tool, which launched in November 2024. The NABERS tool takes a more granular approach than the BASIX pathway: it requires a Bill of Quantities that includes evidence of independently verified carbon claims for construction products. The assessment must be completed or verified by a NABERS Accredited Assessor, a Quantity Surveyor, or a suitably qualified design professional.

The NABERS Embodied Carbon rating focuses on A1–A3 (cradle-to-gate) emissions and covers key structural and envelope materials. Australia's first NABERS Embodied Carbon rating was awarded to an industrial warehouse in Kemps Creek, NSW, demonstrating that the tool is operational and that projects can achieve certification when material selection is planned around verified carbon data from the design stage. The NABERS tool also recognises the value of reused components, aligning with circular economy principles.

What Changed in the March 2026 Embodied Carbon Technical Note?

The NSW DPHI released the Embodied Carbon Technical Note in March 2026, providing the operational framework that had been missing since the SEPP was enacted. While the SEPP established the legislative requirement, the Technical Note clarifies how that requirement is to be met in practice. Three changes are particularly significant for practitioners.

First, the Technical Note indicates that submissions must not only report carbon quantities but also identify design or specification decisions that demonstrate consideration of lower-carbon materials or construction methods. This is a meaningful shift — it moves the framework from pure measurement toward evidence of active decarbonisation thinking. In practice, this means your embodied carbon report should include a narrative explaining why specific materials were chosen and what lower-carbon alternatives were considered.

Second, the Technical Note clarifies the consequences of non-compliance. If the required reporting is missing, or if the constructed materials significantly differ from the approved submission, planning authorities may require design revisions, updated reporting, or additional review before approval can proceed. This creates a compliance gap risk for projects where material substitutions occur during construction without updating the embodied carbon report.

Third, the Technical Note provides guidance on the treatment of adaptive reuse projects, where a percentage of total floor area that is reused may be reported in the NSW Planning Portal — effectively receiving credit for avoiding the embodied carbon of new construction. This is particularly relevant for heritage conversions and warehouse-to-apartment redevelopments, which are common in inner Sydney.

How to Prepare Your DA: Step-by-Step Process

Whether your project follows the BASIX or NABERS pathway, integrating embodied carbon reporting into your DA preparation requires early planning. The most common failure mode we see is teams treating carbon reporting as a compliance afterthought — something to be bolted on at the end of the design phase — rather than a design input that can influence material selection from the outset. Research suggests 60–80% of a project's carbon and cost outcomes are locked in during early design, yet most carbon reporting workflows are structured for compliance later in the project.

Cost and Time Implications for NSW Projects

Embodied carbon reporting adds both cost and time to the DA process, but the scale depends heavily on the pathway and the project's complexity. For residential projects using the BASIX Materials Index, the additional cost is relatively modest — the BASIX certificate fee is based on the type of development and number of dwellings, and the Materials Index is completed within the existing BASIX tool interface. The main time cost is quantifying material quantities, which for a standard house can be completed in 2–4 hours by a drafter or building designer familiar with the BASIX tool.

For non-residential projects, the NABERS pathway is more demanding. Engaging a NABERS Accredited Assessor or Quantity Surveyor to prepare the Embodied Emissions Form typically adds $5,000–$15,000 to the project cost, depending on the building's complexity and size. The assessment itself usually takes 1–3 weeks, assuming the Bill of Quantities is already prepared. Projects that leave this to the last minute often face DA delays — we have seen projects in Sydney where the embodied carbon report became the critical path item because the design team had not engaged an assessor until the DA was ready to lodge.

The most effective approach is to integrate carbon reporting into the design workflow from the concept stage. This not only avoids the last-minute scramble but also allows the embodied carbon data to inform material selection decisions — potentially reducing the project's carbon footprint and, in some cases, identifying cost savings through material substitution.

What the NCC 2025 Freeze Means for NSW Builders

The NCC 2025 was finalised and released on 1 May 2026, but it does not add new residential energy-efficiency requirements. The NCC 2022 increases (7-star NatHERS thermal performance, Whole of Home energy budget) remain the current residential standard, and the NCC has frozen residential energy efficiency changes until approximately mid-2029. NSW has deferred adoption of NCC 2025 to 1 May 2027.

However, this freeze does not affect BASIX or the Sustainable Buildings SEPP. BASIX is a separate NSW requirement that can be updated independently of the NCC. The embodied carbon reporting requirements under the SEPP remain in force regardless of the NCC 2025 timeline. Builders who assume the NCC freeze means a reprieve from sustainability compliance are mistaken — the NSW requirements are already operational and apply to all current DAs.

What the NCC 2025 does introduce is voluntary embodied carbon guidance (published separately from the code text), with the ABCB recommending the NABERS Embodied Carbon framework as the preferred methodology for commercial buildings. The ABCB has been asked to investigate incorporating a minimum embodied carbon standard into NCC 2028. This means the voluntary period under the NCC is effectively a preparation window — organisations that treat it as optional will face the steepest learning curve when NCC 2028 lands.

Practical Strategies for Reducing Embodied Carbon in NSW Projects

While the current framework requires reporting rather than reduction, the March 2026 Technical Note's requirement to demonstrate consideration of lower-carbon materials means that design teams need to actively engage with carbon reduction strategies. The NSW Embodied Emissions Technical Note specifically recommends timber as a low-carbon superstructure option, recognising its ability to sequester carbon and provide a negative embodied carbon contribution when sourced sustainably.

For concrete — typically the largest single source of embodied carbon in residential construction — strategies include specifying supplementary cementitious materials (fly ash, ground granulated blast-furnace slag), which can reduce the carbon intensity of concrete by 30–50% compared to Portland cement alone. For steel, specifying recycled content (electric arc furnace steel typically contains 60–90% recycled material) and designing for material efficiency reduces both carbon and cost. For aluminium, which has a particularly high carbon intensity, limiting its use to essential applications and specifying recycled content where possible can significantly reduce overall embodied carbon.

Adaptive reuse deserves special mention. The Technical Note allows for the reporting of reused floor area, effectively crediting projects that retain existing building structure rather than demolishing and rebuilding. For heritage conversions and warehouse-to-apartment redevelopments — common in Sydney's inner suburbs — this can substantially reduce the embodied carbon report's headline figure while preserving the character that makes these projects commercially attractive.

How giantA Can Help With Your Embodied Carbon Compliance

At giantA, we integrate embodied carbon reporting into our standard DA preparation workflow for both residential and non-residential projects. Our approach is to treat the Materials Index or NABERS assessment as a design input rather than a compliance afterthought — engaging with material selection decisions early so that the embodied carbon report reflects considered design choices, not just a measurement of whatever was already specified.

For a recent multi-unit townhouse development in Merrylands, we coordinated the BASIX Materials Index alongside the NatHERS thermal performance assessment, ensuring that material choices for the building envelope satisfied both the embodied carbon and thermal performance requirements simultaneously. This integrated approach compressed what could have been a 3-week sequential process into a single 1-week coordinated assessment, saving the client approximately $8,000 in consultant fees and avoiding a potential DA lodgement delay.

For non-residential projects, we work with NABERS Accredited Assessors to prepare the Embodied Emissions Form, and we can advise on material specification strategies that reduce embodied carbon while maintaining structural performance and budget compliance. If you are planning a development in NSW and want to understand how the embodied carbon requirements apply to your project, contact us for a no-obligation consultation.

Frequently Asked Questions

Does embodied carbon reporting apply to all NSW developments?

Embodied carbon reporting applies to all new residential developments (houses, apartments, duplexes) through the BASIX Materials Index, and to non-residential new builds above $5M and major renovations above $10M through the NABERS Embodied Carbon pathway. Residential renovations above $50,000 are also captured. Excluded development under Chapter 3.1 of the Sustainable Buildings SEPP and BASIX-excluded development are not subject to these requirements. Mixed-use developments require both pathways — BASIX for the residential component and NABERS for the commercial component.

What is the difference between BASIX Materials Index and NABERS Embodied Carbon?

The BASIX Materials Index is the residential pathway, using grouped material categories and standard emissions factors within the existing BASIX online tool — it is simpler and integrated into the BASIX certificate process. The NABERS Embodied Carbon rating is the non-residential pathway, requiring a detailed Bill of Quantities with independently verified carbon claims, assessed by a NABERS Accredited Assessor. NABERS is more granular and demanding but provides a recognised rating that can be used for Green Star certification and AASB S2 reporting.

When do I need to submit the embodied carbon report?

For residential projects, the BASIX certificate (which includes the Materials Index) must be submitted with the DA or CDC application and must be no more than 3 months old at the time of lodgement. For non-residential projects, the NABERS Embodied Emissions Form must be attached to the DA and updated at the Construction Certificate stage if materials have changed. The building certifier issues the BASIX completion receipt via the Planning Portal before the occupation certificate is issued.

Is there a carbon limit or reduction target I need to meet?

Currently, no. The NSW framework requires measurement and reporting of embodied carbon, but has not yet set a numerical limit or mandatory reduction target. The NSW Government has confirmed that a limit is under review, with the policy direction pointing toward performance thresholds by approximately 2028–2029. However, the March 2026 Technical Note requires submissions to demonstrate consideration of lower-carbon materials, marking an early shift from passive reporting toward active decarbonisation.

What happens if my construction materials differ from the DA submission?

If the constructed materials significantly differ from the approved embodied carbon submission, planning authorities may require design revisions, updated reporting, or additional review before approval can proceed. This creates a compliance gap risk for projects where material substitutions occur during construction without updating the report. We recommend reviewing the embodied carbon report at the Construction Certificate stage and updating it if significant material changes have occurred since DA approval.

How much does embodied carbon reporting cost?

For residential projects, the BASIX certificate fee is based on development type and dwelling count, and the Materials Index is completed within the existing BASIX tool — the additional cost is primarily the time to quantify materials (2–4 hours for a standard house). For non-residential projects, engaging a NABERS Assessor or QS to prepare the Embodied Emissions Form typically costs $5,000–$15,000 depending on building complexity. The assessment usually takes 1–3 weeks if the Bill of Quantities is already prepared.

Does the NCC 2025 freeze affect embodied carbon reporting?

No. The NCC 2025 freeze applies to residential energy efficiency requirements (thermal performance and Whole of Home), not to embodied carbon. BASIX and the Sustainable Buildings SEPP are separate NSW requirements that can be updated independently of the NCC. The embodied carbon reporting requirements remain in force regardless of the NCC 2025 adoption timeline. NSW has deferred NCC 2025 adoption to 1 May 2027, but the SEPP requirements already apply.

Can adaptive reuse projects get credit for retained building structure?

Yes. The March 2026 Embodied Carbon Technical Note allows for the reporting of reused floor area as a percentage of total floor area in the NSW Planning Portal. This effectively credits projects that retain existing building structure rather than demolishing and rebuilding, recognising the embodied carbon avoided by not constructing new materials. This is particularly relevant for heritage conversions and warehouse-to-apartment redevelopments common in Sydney's inner suburbs.