The Maryland Climate Commission has approved a Building Energy Transition Plan to serve as the framework to reduce direct emissions from buildings in the state 95% by 2045.

The core recommendations of the plan are:

  1. Adopt an all-electric building code by 2024 with a cost effectiveness test for commercial buildings.
  2. Create a building emissions standard that would cap and reduce direct emissions from existing buildings and include an alternative compliance/non-compliance fee to allow continued use of fossil fuels when retrofitting of existing systems are unnecessarily expensive.
  3. Change the existing utility-run, energy efficiency programs to allow for fuel switching and beneficial electrification. Incentives and tax credit programs related to commercial clean heat retrofits should be designed to achieve a five-to-seven-year simple payback period.
  4. Require the Public Service Commission to oversee structured transition plans for electric and natural gas utilities to achieve near zero emissions from buildings in the state by 2045.

The plan features incremental improvements from previous proposals. However, the studies used as the technical basis of the plan are speculative. The plan makes aggressive assumptions about progress on interrelated but hard to achieve commitments. In addition, barriers related to energy generation and storage, heating equipment technologies, utility rate structures and the plan’s restrictive approach to carbon emissions credits raised major concerns from NAIOP Maryland and the Maryland Energy Administration.

Both the Hogan Administration and leaders in the General Assembly have endorsed reaching economy-wide net zero emissions by 2045. Policies to transform how utilities generate power and accelerate the transition to electric automobiles have been set in motion. Direct energy use in buildings generates 13% of state-wide carbon emissions and the goals set by the General Assembly cannot be met without eliminating emissions from buildings by mid-century. Legislators are expected to debate legislation to implement a pathway to decarbonize buildings when the General Assembly reconvenes in January.