Key Takeaways

• What Happened?

1. MDE proposed regulations for Building Energy Performance Standards (BEPS). Covered buildings would be required to measure and report energy use, and meet interim and final performance standards in future years.

• Who is Affected?

1. Building owners of buildings 35,000 square feet or larger, with certain exceptions.
2. Electric and gas companies that have obligations to provide specified energy data to covered building owners.

• What Should I Do?

1. Determine application to your business, and assess whether any exemptions apply.
2. Consider submitting comments to express concerns or agreement with the proposed regulation or to clarify any nuances relevant to your business.
3. Develop a compliance strategy.
4. Stay apprised of the publication of the final version of the regulation.

The Maryland Department of the Environment (MDE) published its Proposed Building Energy Performance Standards (BEPS) in the December 15, 2023 Issue of the Maryland Register. Affected parties must submit comments on the proposed regulation by January 18, 2024 (5:00 p.m.). MDE will hold a virtual public hearing on the same day at 10:00 am.

Background on the Proposed Regulations

The Climate Solutions Now Act (2022) requires Maryland to reduce statewide Greenhouse Gas (GHG) emissions by 60% below 2006 levels by 2031 and achieve net-zero emissions by 2045. As part of that State law, to address GHG contributions from larger buildings (at least 35,000 square feet), the Act requires MDE to promulgate energy use intensity (EUI) targets by building type, and building energy performance standards. MDE has now proposed its implementing regulations. MDE’s proposal has two basic elements: 1) mandatory measurement (or benchmarking) and reporting of GHG emissions, beginning with 2024 data to be reported in 2025; and 2) interim and final net direct emissions and final site EUI standards, tied to a compliance schedule that begins in 2030. Final standards would apply in 2040 and beyond. The regulation also proposes a schedule of alternative compliance (or “in lieu”) fees, that would become due if a company does not meet net direct emission standards. The regulation does not specify what actions a building owner may need to take to improve building energy performance.

The proposed regulations are retroactive, requiring January 1, 2024 GHG emission data to be collected and reported to MDE.

Building owners are in a unique position to get ahead of this issue to understand any challenges the regulation presents and manage compliance obligations posed by the regulation.