Unthinkable a decade ago, mass timber is one of Australia’s biggest opportunities to slash emissions

After writing an assessment of the mass timber sector with a Canadian opportunity focus in a series of articles for CleanTechnica recently, I wanted to turn my attention to Australia.

The global picture is clear. Mass timber, including cross-laminated timber (CLT) and glued laminated timber (glulam), is moving from niche to mainstream in many jurisdictions because it lowers embodied carbon, speeds construction, and meets codes when detailed correctly.

The questions I had regarding Australia were how mature the market is today, where the bottlenecks are, and what potential it has to 2035.

The first step is looking at current capacity. Australia now has three CLT manufacturers. XLam, originally founded in New Zealand and now owned by Hyne, operates a substantial plant in Wodonga.

Timberlink’s NeXTimber brand opened in Tarpeena, South Australia in 2023 as the country’s first integrated CLT and glulam facility. CLTP Tasmania, through its Cusp Building Solutions arm, produces hardwood CLT panels and curved glulam in a growing plant that is scaling production quickly, according to their statements.

Together these firms give Australia domestic supply where, just a few years ago, nearly all CLT was imported from Europe. Demand still exceeds local output and imports continue, but the investment signals are clear that industry believes in growth.

In terms of building adoption, the country already has a suite of completed projects that prove mass timber’s credentials. Lendlease’s Forté Apartments in Melbourne in 2012 showed that a ten storey CLT residential building could be delivered.

Since then, commercial offices like International House in Sydney and 25 King Street in Brisbane have been finished, both achieving high Green Star ratings and demonstrating faster erection compared to concrete or steel. University dormitories, schools, and community buildings have also embraced timber.

The pipeline now includes hybrid high rises such as the Atlassian headquarters in Sydney, which will reach around 40 storeys, and the C6 Tower in Perth, set to be one of the tallest hybrid timber towers globally.

These projects underline that regulatory authorities and financiers are now comfortable approving timber at scales that were unthinkable a decade ago.

Regulation has kept pace. The National Construction Code since 2016 has contained Deemed-to-Satisfy provisions allowing timber up to 25 metres in height, essentially mid-rise.

In 2019 this was extended to more building classes including schools, offices, and retail. That means that up to eight storeys, timber can be designed without having to go through alternative performance pathways, provided FRLs are achieved with encapsulation and sprinklers are in place.

For taller structures, performance solutions with fire engineering are required, and we have seen those succeed in practice. The combination of clear code paths and willingness to approve alternatives has been critical to unlocking developer appetite.

Cost is always the central question. Today in Australia a CLT building often looks more expensive on paper than a concrete frame, typically 5% to 15% higher on direct material and structural costs. That has been enough to spook some tender processes. But those analyses often omit program and financing.

Prefabricated timber arrives on site ready to install, which cuts program time significantly. Case studies show five storey timber offices erected in a matter of weeks rather than months.

Shorter schedules reduce preliminaries, cut interest carry-on loans, and bring forward revenue. Some developers report that the overall project budget ends up at parity or better once these factors are accounted for.

As manufacturers expand and compete, panel costs should fall further. By 2030 the expectation is that timber will achieve cost parity with concrete on direct build costs in many cases, on top of its program advantages.

The demand drivers are diverse. Residential developers want faster delivery, lighter structures for brownfield sites, and marketing cachet for buyers who want sustainable living.

Governments are interested in CLT for social and Indigenous housing because prefabrication enables rapid deployment in remote areas and offers culturally resonant materials. Commercial developers see timber as a way to attract tenants with sustainability mandates, lower carbon footprints, and appealing office environments.

Universities and schools value speed and reduced disruption, while health facilities are beginning to see the biophilic benefits of timber interiors for wellbeing.

Public procurement is already shifting, with states like Tasmania and Western Australia requiring government projects to consider wood as the primary option. All of these demand channels suggest a wide base of market pull.

Forestry supply is the constraint. Australia’s softwood plantation estate has been static at just over a million hectares for decades, and the 2019–2020 fires wiped out a quarter of New South Wales plantations. Replanting will take decades to mature. With framing demand already straining the resource, engineered wood producers will continue to face feedstock pressure.

Hardwood plantations exist and Cusp has demonstrated how plantation eucalyptus can be up-valued into CLT, but the bulk of the market will rely on softwood.

The federal government’s one billion trees program, if it succeeds, will eventually relieve this, but the wood will not be available until the 2040s. Until then, imports will remain a key part of the supply equation.

That points to regional supply options. New Zealand is the obvious partner, with its vast radiata pine resource and growing CLT capacity. Malaysia and Indonesia have potential to export engineered wood, though certification and quality assurance will be key.

Japan is scaling CLT and could be an exporter, while China’s entry into mass timber could flood the market with competitive panels if they secure international certifications. Even Chile, with radiata plantations similar to Australia’s, could be a supplier.

The logistics are manageable and free trade agreements exist. Australia can both grow domestic capacity and tap regional supply to meet demand through 2035.

Insurance and finance are adjusting. Initially insurers viewed timber with suspicion, particularly after some overseas construction fires. Premiums for builders’ risk were multiples of concrete. But as evidence accumulates that completed timber buildings perform predictably in fire, and as construction-phase protocols improve, insurers are moderating.

Developers now know they must present detailed fire management plans and demonstrate repairability of charred members to get favorable terms. CEFC has stepped in with a $300 million Timber Building Program to support projects, showing that green finance is available. Investors are starting to see timber as not just viable but desirable, given tenant demand for sustainable assets and potential rent premiums.

The carbon math is the strongest argument. CLT and glulam sequester carbon absorbed by trees, and even accounting for processing emissions and end-of-life, timber structures deliver 50% to 75% lower embodied carbon than concrete or steel equivalents.

Some analyses of mid-rise CLT buildings in Australia show nearly net-zero or even slightly negative upfront carbon footprints. This advantage aligns perfectly with Australia’s commitments to reduce construction emissions and with rating tools like Green Star that reward embodied carbon cuts.

As embodied carbon reporting becomes mandatory, likely following New Zealand’s lead, mass timber will become a necessity rather than an option for many developers to meet targets.

Looking to 2035, scenarios diverge. In a base case with current policies, mass timber could capture 10% to 15% of new multi-storey construction, with market value quadrupling and domestic plants operating near capacity.

In an accelerated case, with stronger carbon regulations, expanded plantations, and normalised insurance, timber could claim a quarter of the market, reaching a billion dollars in annual product value and making Australia a regional hub for exports as well. Success will depend on aligning policy, industry, and finance.

Canada is well ahead of Australia in mass timber today. In 2022, Canada’s CLT market was worth about US$82 million and is forecast to triple by 2030, while Australia’s was only US$20 million with a smaller growth trajectory.

Canada now accounts for nearly a fifth of global market value and has hundreds of timber buildings either completed or underway, supported by a mature code framework and strong domestic supply.

Australia is later to the game, with domestic CLT capacity only established in the past few years and imports still filling much of the demand. The growth outlook in Australia is strong, particularly when paired with New Zealand, but the scale and maturity of Canada’s market means Australia is still catching up rather than leading.

The recommendations are clear. Policymakers should harmonise codes, support plantation expansion, and incentivise low-carbon materials through procurement and carbon accounting rules.

Industry must invest in capacity, adopt early integration of timber in design, and enforce best practices for fire and moisture management. Investors should back new plants, treat plantations as strategic assets, and fund projects that prove bankable at scale.

Mass timber is no longer experimental. It is a proven path to decarbonise construction while speeding delivery and supporting regional manufacturing.

Australia has the ingredients to lead in the Asia-Pacific if it aligns code clarity, carbon policy, plantation expansion, and industrial investment.

The skyline of 2035 could feature timber offices, apartments, schools, and civic buildings standing beside concrete and steel, each chosen on merit but with timber increasingly the smarter choice for cost, carbon, and quality.

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