NJ Backs off Ban on Commercial-size Fossil Fuel Boilers
Revised Rules Raise Questions on Murphy’s Commitment to Building Electrification
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N.J. officials said they will continue to study how to cut building emissions after backing off a controversial ban on new commercial size fossil fuel boilers.

New Jersey officials said they will continue to study how to cut building emissions after backing off a controversial ban on new commercial size fossil fuel boilers.

The rules set for a Jan. 3 adoption by the New Jersey Department of Environmental Protection faced vigorous opposition from business and fuel groups.

The DEP rules, which formerly had three elements, now include two, and no longer contain a rule that would have prevented the DEP from issuing permits for new fossil fuel-fired boilers in certain situations. The omitted rule would have prohibited the installation of boilers 1 to 5 MMBtu unless it is “technically infeasible” to use a non-fossil fuel boiler because of “physical, chemical or engineering principles” or because the interruption of the operation of an existing boiler could “jeopardize public health, life or safety.”

The omitted rule didn’t stipulate that electric boilers should be installed, instead requiring the “most common non-fossil-fuel-fired technology currently available on the market.”

The two elements still in the rules lower the acceptable limits for CO2 emissions from fossil-fired electric generating units (EGU) and ban the use of two fuel oils that have high CO2 emissions.

DEP spokesperson Vincent Grassi did not elaborate on the reason for the withdrawal but said discussions on the reduction of emissions from buildings are ongoing.

“DEP will continue to [have stakeholder discussions on] the boiler issue as part of our second round of PACT [Protecting Against Climate Threats] Climate Pollutant Reduction initiatives,” he said, referring to an ongoing effort by the department to research and draft measures that will cut greenhouse gas emissions in various areas. That will “ensure the eventual regulation of boilers achieves a reduction in greenhouse gas emissions at a reasonable cost,” he said.

Grassi added that stakeholder discussions to discuss “the regulation of boilers” will take place in 2023, although no timeline for when it will happen has yet been developed.

Bigger Picture

The change of plan comes three months after Gov. Phil Murphy announced that he would form a multi-stakeholder task force to accelerate the reduction of building emissions.

Commercial and industrial buildings emit 17 % of the state’s greenhouse gases, well behind transportation (42%) and electricity generation (19%), according to the state’s National Electric Vehicle Infrastructure plan.

The DEP’s original rules stated that there are about 8,421 fossil-fuel fired heating boilers in the state, and about 268 are replaced on average each year.

Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey, welcomed the withdrawal of the rules but said he fears the issue is “far from over.”

“We can’t lose sight of the bigger picture here. The governor’s strategy for the Energy Master Plan is still to electrify every building,” he said. “Until such time as the governor says that he’s moving forward in a different path, that is still his objective to electrify everything.”

The New Jersey Business & Industry Association, one of the state’s largest business groups, called the move “appropriate and appreciated.” The organization said it would cost about $2 million to retrofit a building and convert it to housing an electric boiler. Those costs could have impacted approximately 1,500 apartment buildings; 1,500 K-12 public schools; 1,200 commercial, industrial and manufacturing facilities; 195 county government buildings; and 143 auto body shops, the group said.

“In addition to the millions of additional dollars this provision would have cost these establishments, the fact of the matter is converting a modern, fuel-efficient natural gas boiler to an electric one would actually increase carbon emissions due to the carbon footprint of the PJM grid,” the organization said in a statement.

Negative Reaction

Environmental groups, which supported the boiler installation ban, questioned where Murphy’s climate change strategy is heading.

“This is not a good sign that the Murphy administration dropped the boiler rule,” said Doug O’Malley, state director of Environment New Jersey, who described the rule as a “target” of fossil fuel industry activity. “Because if we’re going to move towards a more climate friendly future, we can’t keep relying on fossil fuels for heating.

“There needs to be a clear statement from the Murphy administration of its commitment to building electrification and the next steps in that process,” he said. “We can’t hit our climate goals, if we’re not moving forward with building electrification.”

Eric D. Miller, N.J. Energy Policy Director for the Natural Resources Defense Council, said the withdrawal is “disappointing” not only because of its harm to the climate but because the boilers’ pollution is a health hazard “in places like schools, libraries and multifamily buildings.”

“The N.J. DEP should re-propose these rules with an updated cost analysis that accounts for highly efficient cold climate heat pumps and other technologies and incorporates the significantly higher fracked gas prices that New Jersey customers are facing today.”

The analysis should take into account the recent rise in natural gas prices and that the costs of electrification could be reduced with federal funding from the Inflation Reduction Act, he said.

Opposition Coalition

The rules stoked controversy from their inception, drawing a strong negative reaction at the first public hearing to solicit stakeholder input in February when with both business groups and environmental groups voiced criticism — albeit over different parts of the package. Business and fossil fuel interests expressed concern at the new fossil boiler installation measure while the environmentalists argued that the limits on emissions from EGU’s were too modest to seriously reduce emissions. (See NJ’s New Emission Rules Draw Fire.)

A coalition of 24 New Jersey business and union interests elevated the fossil boiler ban issue in September, with a letter to the heads of the state Senate and General Assembly saying that the Murphy electrification program should be stopped because it will “dramatically increase costs for New Jersey residents and businesses at a time when the legislature is focused on affordability.”

On Oct. 4, Murphy announced at the Board of Public Utility’s Clean Energy Conference in Atlantic City that he would form the Clean Buildings Working Group, which would focus on how to implement the state’s transition from fossil fuels to clean energy and energy efficiency. (See Murphy Outlines NJ Building Electrification Push.)

Opponents of the boiler installation ban want to see the legislature pass a bill (S-2671) that that would prohibit any state agency from adopting rules and regulations that “mandate the use of electric heating systems or electric water heating systems as the sole or primary means of heating buildings or providing hot water to buildings, including, but not limited to, residences or commercial buildings.”

The bill, which has not moved in the legislature since its introduction in May, is similar to “pre-emption bills” in other states that have sought to prevent electrification requirements — often promoted by the fossil fuel industry. (See NJ Legislators Back Alternatives to Electric Heat.)

New Jersey at present does not mandate the electrification of buildings. The state’s Energy Master Plan calls for the building sector to be “largely decarbonized and electrified” by 2050, with a focus on “new construction and the electrification of oil- and propane-fueled buildings.”

Energy EfficiencyNew JerseySpace HeatingState and Local PolicyWater Heating

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