Despite requiring reductions in emissions and energy use in a billion square feet of commercial and multifamily buildings, Maryland’s Building Energy Performance Standards (BEPS) will not be enough to meet the state’s 2031 climate goals.
Maryland and other leading climate states, supported by federally funded non-profit organizations, are developing a series of interrelated regulations designed to accelerate building decarbonization. The initiatives would create a regulatory stack comprised of:
- Building Energy Performance Standards
- Zero Emissions Appliance Standards
- Clean Heat Standards
- Carbon Emissions Cap and Invest Carbon Markets
One report commissioned by the Maryland Department of the Environment (MDE) notes that a cap-and-invest carbon market “can amplify the effect of other regulatory policies.”
MDE has announced that its Building Energy Performance Standard (BEPS) regulations will take effect December 23, 2024. One of the first milestones requires covered buildings to report 2024 energy use and emissions to MDE by June 2025. A copy of the final regulations and other details are available on MDE’s BEPS website.
MDE has released the framework of a Zero Emissions Heating Equipment (ZEHE) regulation that would prohibit the installation of fossil fuel-powered furnaces, boilers and water heaters. New equipment would be required to meet new low-NOx (Nitrogen Oxide) standards beginning in 2027 and meet zero-emissions standards beginning in 2029. MDE’s target is to adopt a final regulation in the fall of 2025.
The department has begun meeting with the providers of pipeline natural gas utilities and the providers of delivered fuels, such as propane and heating oil, to create a Clean Heat Standard. Under a Clean Heat Standard, natural gas utilities and other obligated parties would be required to reduce greenhouse gas emissions of their customers through electrification, building insulation, blending of low-emissions fuels, or other conservation and mitigation measures in commercial and residential buildings.
MDE commissioned the Regulatory Assistance Project to provide a report on policy considerations related to a Clean Heat Standard in Maryland.
Maryland’s Climate Commission this week voted to study the creation of a state-wide carbon emissions cap-and-invest market as a method of accelerating the reduction of greenhouse gas emissions while also generating $1 billion per year to fund the state’s climate plans.
The basic framework of a cap-and-invest carbon market would place a declining cap on large emissions sources, such as automotive fuels, natural gas infrastructure and industrial facilities. The owners of these facilities would be required to either reduce greenhouse gas emissions or purchase emissions allowances on a state-run carbon auction market. The number of allowances available at each auction would be reduced in order to create scarcity and increase the pricing pressure on regulated entities.
A report on Cap and Invest by the non-profit group, Resources For the Future was commissioned by MDE setting out how a state carbon market would work.
Development of these policies reflects MDE’s continued pursuit of a suite of regulations calibrated to the General Assembly’s goal of reducing state-wide greenhouse gas emissions 60% by 2031 and implementation of the Governor’s Executive Order on Climate Change. As the deliverables required to accomplish the 60-by-31 goal become less likely to materialize, the General Assembly and the Moore Administration will need to provide clearer direction to MDE that deescalates the regulatory agenda to reflect a more pragmatic implementation schedule.