Vermont could turn to a Clean Heat Standard (CHS) to reduce emissions from heating and hot water in buildings, the state’s second highest emitting sector behind transportation.

The Vermont Climate Council’s Cross-sector Mitigation Subcommittee on Monday recommended that the full council adopt a CHS as part of the state’s climate action plan due in December.

A CHS is like a renewable portfolio standard but would apply to the sales of fossil-fuel heating providers in Vermont, David Farnsworth, subcommittee member and principal at the Regulatory Assistance Project, said during the meeting.

“Because it’s a performance standard, companies are given a choice of how to best comply,” Farnsworth said. “It also gives the opportunity to consumers to decide what works best for them and how to engage with energy providers to achieve those choices.”

Vermont’s thermal sector accounts for about 34% of the state’s GHG emissions, and 74% of its thermal energy use is fossil fuel-based, according to the Energy Action Network’s Annual Progress Report for Vermont, 2020-2021.

A CHS would cap emissions, and providers would either purchase clean heat credits or earn them though clean-fuel sales or customer conversions to clean heating technologies. Those heating options might include heat pumps, pellet stoves, wood chip boilers, biofuels, renewable natural gas, district heating and thermal solar.

Vermont has plenty of experience with clean heating rollouts, including advanced wood chip burners, pellet stoves and heat pumps, Richard Cowart, council member and principal at the Regulatory Assistance Project, said during the meeting.

The biofuels industry, he said, is very enthusiastic about a CHS.

“They think that there are prospects in the near term for blending biofuels into fuel oil and renewable natural gas into the pipeline gas system,” he said.

Longer-term solutions would require deeper penetrations of clean-heat sources, but there would be time to build up expertise and a workforce, Cowart said.

The 2020 Global Warming Solutions Act authorized the council to develop a state climate action plan to reduce GHG emissions 80% below 1990 levels by 2050. Interim targets include a 26% reduction from 2005 levels by 2025 and 40% below 1990 levels by 2030.

Improving building heating through a CHS would pair with improvements to the buildings themselves through aggressive weatherization efforts, Farnsworth said.

It took the state about 10 years to weatherize 27,000 existing buildings, and it needs to weatherize 50,000 through 2025 and an additional 70,000 between 2025 and 2030 to align with the state’s emission-reduction mandates.

“Not only do we need to ramp up, but we’re going to find that we need to accelerate the effort,” Farnsworth said.

Thermal energy is one of four sectors for which the cross-sector committee is responsible. The committee also presented recommendations to the full council for the electricity, transportation and non-energy sectors.

Subcommittee recommendations on Monday comprised only pathways and strategies for emission reductions. Over the coming months, they will develop the actions the state could take to achieve those pathways and strategies.

A draft climate action plan is due in early November.

100% Clean Energy

The subcommittee recommended that the council consider boosting the state’s existing Clean Energy Standard to 100% as part of its group of pathways for reducing emissions in the electricity sector. It did not, however, set a date or specific program design for that target.

With a strong energy standard in place already, Vermont’s electricity sector has very low emissions. It is in fourth place for total emissions, behind transportation, thermal and agriculture, respectively.

The state’s electricity is about 67% renewable and is on track to increase to 75% renewable by 2032, Ed McNamara, subcommittee member and director of the Regulated Utility Planning Division at the Vermont Department of Public Service (DPS), said during the meeting. An energy standard, he added, can keep pace with any electrification that would occur from decarbonizing the transportation and thermal sectors.

“We’ve recommended focusing on a clean energy standard rather than carbon-free energy standard, as some other states have done, just recognizing where we are as a state,” he said.

Details about what a 100% standard might look like will develop as the council discusses important electricity system factors, such as resource mix, imported supply and changes in load from electrification in other sectors.

The subcommittee also is coordinating its recommendations with DPS, as the department develops its latest state energy plan, which is due in January. (See Vt. Energy Plan Update Will Shift to Strategy Narrative.)

EV Priorities

With transportation accounting for 40% of Vermont’s GHG emissions, the subcommittee recommended making vehicle electrification a near-term priority in the climate plan. But since EV adoption in the state has been slow, it also wants to see the council prioritize alternatives to single-passenger cars, exploration of low-carbon fuels, and development of smart communities.

In 2020, only 7% of registered cars in Vermont were electric, according to EAN’s state progress report.

“We would need 46,000 [light-duty] EVs replacing fossil-fuel vehicles in order to achieve the 2025 goals, which would be one out of every four annual vehicle purchases or leases,” said Gina Campoli, subcommittee member and environmental policy manager at the Vermont Agency of Transportation.

Incentives for EV adoption would need to pair with an expansion of public and residential charging infrastructure and EV education.

Vermont, Campoli said, is a “blip” in the larger transportation economy, necessitating regional coordination.

“We encourage the council to be ready to present to the public revenue scenarios that are linked to its recommendations,” she said. “These might include how federal funding opportunities could maximize potential public-private partnerships and identifying and pursuing long-term sustainable revenue sources, such as the [Transportation Climate Initiative’s cap-and-invest program].”

Reducing emissions in the heavy-duty transportation sector, including buses and industrial vehicles, will require developing a much longer-term set of pathways. To that end, the subcommittee recommended that the council consider research and development for alternative heavy-duty vehicle technologies and setting fleet conversion requirements as new technologies become available.