Commercial and multifamily residential buildings in Maryland would be required to eliminate their carbon emissions and new buildings would be all-electric under a bill being drafted in the state’s House of Delegates. And ideas in the recently released Maryland Climate Change Commission’s 2021 annual report are playing a key role, says the bill’s lead sponsor.

“I’ll be working in the House of Delegates on the buildings bill, and it’s likely we’ll be including a number of recommendations from the report, such as the electric code for new buildings and the emissions standard for existing buildings,” Del. Dana Stein (D), said in an interview with NetZero Insider. “The report has been very helpful for that.”

Stein’s proposal would seek to implement at least two of the 16 recommendations for the buildings sector, which the Commission’s Greenhouse Gas Mitigation Working Group (MWG) developed in a series of meetings earlier this year. (See Maryland Looks at Pathways to Net Zero Buildings by 2045.)

“I can’t say which of the recommendations beyond the electric code for new buildings and an emissions standard for existing buildings will be in the bill,” Stein said in an email. He said he is working on the bill with Del. Kumar Barve (D), chair of the Environment and Transportation Committee, and that he hopes they will finish drafting the bill before or shortly after the legislature’s next session begins Jan. 13.

Electric Code for New Buildings

The Mitigation Working Group recommended the Maryland Building Code Administration adopt a code that requires new buildings meet all water and space heating demand without fossil fuels (e.g., through electric heat pumps, solar thermal, etc.) and can accommodate solar panels, electric vehicle charging, and building-grid interaction. It would apply to all new residential, commercial and state-funded buildings beginning no later than 2024.

Exemptions would be allowed for building types for which compliance is not feasible. The Building Code Administration also would be required to develop a cost-effectiveness test, including the federal social cost of carbon, to allow building projects to seek variances to code requirements. A new commercial building that receives a variance and produces greenhouse gas emissions on-site would be required to participate in the proposed Building Emissions Standard and follow a “tailored plan” for reaching net-zero emissions. Residential building projects would also be permitted to seek variances using the cost-effectiveness test.

The Building Code Administration also would be charged with developing training courses on the benefits and challenges of all-electric and electric-ready buildings for developers, real estate agents, appraisers and lenders.

The MWG cited studies that it said found new all-electric homes have lower construction and energy costs than mixed-fuel homes, which would improve housing affordability and local air quality while also reducing greenhouse gas emissions. The group said heat pumps work well in Maryland’s climate and are the second most common heating system for buildings in the state.

But the MWG called for cost-effectiveness tests in recognition that all-electric design can increase construction and energy costs for commercial construction.

The MWG said the state could adopt the New Building Institute’s Building Decarbonization Code, which includes an all-electric pathway. It also pointed to recently adopted building energy efficiency codes in California and Washington.

Emissions Standard for Existing Buildings

The MWG also recommended the Maryland Department of the Environment develop a Building Emissions Standard to bring commercial and multifamily residential buildings to net-zero emissions by 2040, with state-owned buildings facing a 2035 deadline. Historic buildings would be exempt.

The state would require measurement and reporting of on-site emissions beginning in 2025 and provide financial support for implementing emissions reduction measures. Such measures would include building shell and other energy efficiency improvements and replacing fuel-burning equipment with heat pumps and induction cooktops.

It would provide an “alternative compliance pathway” allowing commercial building owners to pay a fee for emissions above target levels. The fee would be “reasonable,” perhaps corresponding with the cost of carbon sequestration or negative emissions technologies, “but not less than the federal social cost of carbon.” The MWG set the target date for 2040 to allow the state time to invest revenue from non-compliance payments into measures such as carbon sequestration or negative emissions technologies to address remaining emissions.

The proposal also would offer commercial tax credits and direct subsidy payments to reduce the simple payback period for decarbonization improvements to between three and seven years.

The MWG cited New York City and Boston as among the cities that have implemented building performance standards for commercial buildings to eliminate emissions.

The Climate Change Commission’s recommendations for single-family homes have to do with funding mechanisms to encourage conversion to electricity rather than the mandates proposed for commercial and multi-family homes.

Controversial Interim Goal Dropped

Stein said the building recommendations were “very strong.

“In buildings, there [previously] wasn’t a game plan for getting that sector to net zero. So, the focus and recommendations are very good,” he said.

But he added, “One area I wish they would have been stronger in was the building emissions sector — though the final goal is net zero, there is no interim goal.”

At its Oct. 13 session, the MWG set aside a proposed interim goal of a 50% reduction in direct emissions from covered, non-state-owned buildings by 2030. It will instead consider it for review in its 2022 work plan.

“There was a 50% interim goal, but some thought that was too aggressive, so it was tabled till next year,” Stein said.

Also supportive of the commission’s 2021 report was David Smedick, acting deputy regional campaign director for the Sierra Club’s Beyond Coal Campaign. “For two years in a row now, the Maryland Commission on Climate Change has delivered a clear message to the governor and General Assembly: The state must rapidly ramp down and eliminate fossil fuel use, grow clean energy, and electrify our buildings and vehicles,” he said in an email to NetZero Insider. “This isn’t a complicated formula, but Maryland has been stuck in debate and incremental climate progress for years.

“Now is the time for the bold action from Annapolis leaders to retrofit and electrify our building stock, plan the transition off coal and fracked gas power plants, commit big to offshore wind and solar, and transform the state’s transportation systems to grow public transit and electrify vehicles,” he said. “We’re in a code red climate emergency. Anything less than transformative action is failure.”

Capitol Strategies lobbyist Erin A. Appel, who represents the International Association of Shopping Centers, said the group had no immediate comment on Stein’s proposal.

Tom Ballentine, vice president of policy and government relations for the Maryland chapter of the Commercial Real Estate Development Association, who serves on the MWG; Kristin Hogle, director of external communications for the Maryland Building Industry Association, and lobbyist Ashlie Bagwell, who represents Federal Realty Investment Trust, did not respond to requests for comment.

16 Recommendations

The climate change commission’s appendix on its Building Energy Transition Plan, released last month along with the annual report, made 16 recommendations. In addition to the two provisions Stein has embraced, they include a clean-heat retrofit program in which all low-income households would be retrofitted by 2030. Fuel-switching and beneficial electrification would be encouraged beginning in 2024 through EmPOWER, the state’s energy efficiency program. The retrofitting program would include a target of having heat pumps account for 50% of residential heating, ventilation, and air conditioning and water heater sales by 2025, and 95% by 2030.

The commission also called for developing utility transition plans, ending EmPOWER subsidies for fossil fuel appliances, and having the state lead by example through the electrification and decarbonization of buildings it owns. It also proposes allowing local jurisdictions to set higher fines for non-compliance on building performance, and identifying locations that need grid upgrades to accommodate all-electric buildings.