Content presented by NAIOP Maryland
Maryland Governor Wes Moore has signed an executive order directing state agencies to implement the Department of the Environment’s Climate Pollution Reduction Plan.
The executive order creates a Subcabinet on Climate to coordinate implementation. It will be chaired by the Secretary of the Environment with the Governor’s Chief Sustainability Officer serving as the Vice Chair.
The executive order requires all state agencies to report to the Subcabinet by November 1, 2024 on the steps, time requirements and resources needed to implement each agency’s responsibilities under the plan.
The resources assessment includes a budget gap analysis between current funding and the anticipated cost to implement the Plan. State officials currently estimate the costs of implementation to be $1 billion per year for the state. A Department of the Environment briefing to the Maryland Commission on Climate Change in September 2023 estimated the economy-wide costs of compliance to be $15 billion per year.
State agencies are directed to immediately take several specific steps.
The Department of Environment must adopt a zero-emissions heating equipment standard which would essentially ban the sale of fossil fuel-powered furnaces and water heating appliances. This has been seen as the preferred way to accelerate the electrification of mechanical systems in buildings that are smaller than 35,000 square feet and not subject to the state’s Building Energy Performance Standards. The wording of the executive order seems to allow fossil fuel cooking appliances.
The Department of the Environment is also directed to propose a Clean Heat Standard. That standard would require natural gas, heating oil and propane suppliers to provide cleaner fuels and take other steps to reduce the emissions associated with their products. Suppliers could purchase emissions allowances that would generate a revenue stream used to fund electrification and energy efficiency projects in buildings.
In a report, the Regulatory Assistance Project estimated that greenhouse gas emissions from heating buildings must be reduced by 5% to 7% per year to reach the state’s target of a 60% economy-wide emissions reduction by 2031.
Maryland’s Climate Pollution Reduction Plan calls for the rapid closure of Maryland’s remaining coal and natural gas-fired power plants.
The Maryland Energy Administration is tasked with creating a framework to achieve 100% clean energy by 2035. The General Assembly previously ordered a report which is due by the end of 2024, on what it would take to achieve 100% clean energy. Early model runs in support of the 100% clean energy study indicated a cost of $118 billion to achieve clean energy by 2040.
Modeling in support of the Climate Pollution Reduction Plan indicated that closure of in-state natural gas power plants would result in more reliance on power imported from outside the state. Accordingly, the executive order directs the Department of the Environment to work with 11 states in the mid-Atlantic and Northeast that are members of the Regional Greenhouse Gas Initiative to reach an agreement on a lower regional cap on carbon dioxide emissions from power plants.
The Department of Transportation is directed to set specific vehicle miles traveled and emissions reduction targets for the transportation sector. It must also develop a process to evaluate greenhouse gas emissions and vehicle miles traveled as part of the capital project planning process. Finally, the order requires that the state’s buildout of electric vehicle charging infrastructure be accelerated.
NAIOP has and continues to advocate for a technically feasible, cost-effective energy transition for building owners and occupants. NAIOP’s perspective on the Climate Pollution Reduction Plan can be found in an October 2023 letter that shares crucial comments and recommendations.
