IS Innovation Challenges: IC-3 Carbon Neutrality

IS Innovation Challenges: IC-3 Carbon Neutrality

IS Innovation Challenges are there to inspire projects, organisations, assets and individuals to pursue sustainability initiatives beyond the expectations of the ISv1.2 rating scheme.

Innovation Challenges are used to reward projects that go beyond the rating requirements and for continuous improvement of the tool.

Projects that meet the requirements outlined in Innovation Challenges will be rewarded through the Innovation category of the IS rating scheme.

A project can register interest for an Innovation Challenge through their Case Manager using the Innovation challenge registration form. For more information on submissions, visit the innovation challenges index.

The IC-3 Carbon Neutrality challenge rewards project/assets that achieve certified carbon neutrality. There are three IS innovation points available for residual carbon emission being 100% offset, and if offsets are deemed suitable under the National Carbon Offset Standard.

Evidence for achieving this challenge can be:

  • Certificate of purchase/currency/purchase agreement/ carbon offset purchase agreement. 
  • Memo confirming cancellation of offsets and percentage of total carbon emissions offset 
  • Energy model

Why is this Challenge Important

Global energy use continues to rise as economies grow. Most Australian energy is derived from non-renewable fossil fuel resources (coal, natural gas and oil). The use of fossil fuels creates greenhouse gas (GHG) emissions which causes climate change. Climate change will adversely impact the systems that support our way of life such as ecosystems and climatic systems.

Australia is one of the highest per capita emitters of GHGs. Recognising the threat posed by climate change, the Australian and New Zealand Governments have committed to reduce GHG emissions. Australia has committed to reduce emissions by 26-28% below 2005 levels by 2030 and New Zealand has committed to reducing emissions by 30% below 2005 levels by 2030. In 2015, New Zealand ratified the Paris Agreement, a global agreement under the United Nations Framework Convention on Climate Change (UNFCCC) to limit global temperature rise to well below 2°C. Australia ratified the agreement in 2016.

If Australia and New Zealand are to achieve their GHG emission targets, all industries and individuals will need to reduce their energy consumption and reduce their GHG emissions.

As such the goal of achieving carbon neutrality on infrastructure projects is an important milestone.

The intent of this innovation challenge is to reward projects that achieve carbon neutrality. Reductions should be prioritised over offsetting using the following hierarchy:

  1. Reducing energy use and GHGs through design (i.e. designing out the need for activities that use energy or generate GHG emissions) and construction
  2. Undertaking any necessary activities as efficiently as possible (e.g. maximising energy efficiency).
  3. Where feasible, using renewable energy to replace non-renewable sources.
  4. Offsetting (This challenge) 


Residual carbon emissions are 100% offset.

Residual emissions are made up of those demonstrated in Ene-1 including any reductions made through the use of on-site renewables. For example, if a project produces 10,000 tCO2-e over its lifecycle and 1,200 tCO2-e were reduced through energy efficiencies with an extra 2,300 tCO2-e reduced through renewables, then the residual emissions would equal 6,500 tCO2-e.

Certificates of purchase/currency/purchase agreement/carbon offset purchase agreement must be provided to demonstrate offsetting has been completed.

Total monitored carbon emissions for construction and operations and proof of purchase and cancellation of eligible offsets must be provided demonstrating a total construction and operations emissions offset. A memo complete with proof of offset cancellation may be used for evidence.