Legal Bulletins
Building Energy Performance Standards Proposed for Final Adoption
Readers of our earlier bulletins (see here) are aware that the Maryland Department of Environment (the Department) has drafted regulations that will require almost all buildings over 35,000 square feet to retrofit in order to convert from fossil fuel (natural gas, propane and heating oil) to high efficiency heat pumps. In addition, the buildings will need to meet strict efficiency standards even if the buildings already rely upon all-electric heat pumps.
The Department has now proposed regulations for final adoption which may occur as soon as the end of this month (January 2024).
The standards are extremely strict, and we are hearing reports that even buildings certified as “green” by the U.S. Building Council may not meet the Building Energy Performance Standards (BEPS). Although the first reporting deadline is not until 2025, and the first penalties for failing to meet the standards will not hit until 2030, building owners should consider these standards when planning upgrades, maintenance of building infrastructure, or even building acquisitions.
The regulations list 80 different types of buildings and provide different standards for each type. The standards include measures of greenhouse gases emitted on site from fossil fuel combustion as well as site energy use intensity (EUI) standards that measure building efficiency. The greenhouse gas standards have interim standards in 2030 and 2035 and then reach the final standard of zero in 2040. The EUI standard includes a final efficiency number in 2040 for each building type and requires an annual improvement from an original benchmark to the final number by 2040.
The draft regulations with the 80 categories can be found here: (See here). Additionally, here are some examples of covered buildings and the standards which they will be subject to:
Examples of Performance Standards | ||||
| Net Direct Emissions Standards (Kg CO2e / sq ft) | Site EUI & BTU / sq ft* | ||
Property Type | 2030-2034 | 2035-2039 | 2040 and beyond | Final for 2040 |
Office | 0.22 | 0.11 | 0.0 | 55 |
Multifamily | 0.82 | 0.41 | 0.0 | 30 |
Strip Mall | 1.90 | 0.95 | 0.0 | 58 |
Retail Store | 0.60 | 0.30 | 0.0 | 48 |
Senior Living | 1.43 | 0.72 | 0.0 | 50 |
Hospital | 6.10 | 3.05 | 0.0 | 144 |
Hotel | 1.47 | 0.74 | 0.0 | 60 |
Warehouse | 0.09 | 0.05 | 0.0 | 30 |
College/University | 2.43 | 1.21 | 0.0 | 57 |
Urgent Care/Clinic/Other Outpatient | 1.76 | 0.88 | 0.0 | 46 |
Medical Office | 0.18 | 0.09 | 0.0 | 70 |
To determine how your building compares to these standards, you will need to use EPA’s Energy Star Portfolio Manager tool (See here). That same tool will be required to report your building benchmarks in 2025.
Estimates of the cost of the retrofits have varied between $15 and $25 billion dollars so the required work may be extensive.
As mentioned, almost all buildings over 35,000 square feet are included in the standards – with the notable exceptions of restaurants and parking garages. The Department estimated that approximately 9,000 buildings may be impacted. A preliminary list, which may be incomplete, was published by the Department here and can be searched by county and address. Not only will buildings be subject to meeting these standards, but the regulations require building owners to disclose benchmarking data to a prospective buyer.
It is also worth noting that Montgomery County is implementing its own version of the building energy performance standards, which will include buildings over 25,000 square feet. Buildings in Montgomery County will be subject to both State and Montgomery County regulations if the building is greater than 25,000 square feet. These regulations are in draft form and will be considered by the County Council in 2024.
If you would like more information, please contact:
Michael Powell
410-576-4175 • mpowell@gfrlaw.com
Max Cooke
410-576-4141 • mcooke@gfrlaw.com