On December 7, the White House Council on the Environment Quality (CEQ) released the draft rules for performance standards for Federal buildings. IMT has worked closely with CEQ for a number of years. Since August 2022, the founding Director of IMT’s Building Innovation Hub Lindsey Falasca has been serving in a detail position as the Director for Net-Zero Federal Buildings at CEQ. In addition to the Federal Building Performance Standard (BPS), the Department of Energy has proposed a requirement to electrify new Federal buildings and those undergoing major renovations and retrofits. As the largest landlord and building owner in the country, the U.S. government has taken significant steps towards decarbonizing the nation’s building stock.
What the Federal standard aims to achieve
The Federal BPS calls for 30% (by total building area) of each Federal agency’s buildings to eliminate all Scope 1 emissions — on-site fossil fuel use — by 2030. Agencies are called to set interim targets, beginning in fiscal year 2024. CEQ and the United States Office of Management and Budget (OMB) will review agencies’ progress annually, and provide corrective action plans if the targets are not met. No later than 2028, CEQ will set new targets for years 2038 and 2045 for the percentage of buildings that every agency must electrify. Policy compliance is not retroactive. So, buildings that were fully electric prior to October 1, 2021 will not count towards the 30% requirement. The standard also allows for exceptions for mission critical activities, including national security, and for process loads “for which no practicable strategy exists to eliminate scope 1 emissions”.
Agencies that are unable to meet the 30% performance path have a prescriptive option which requires implementing all “practicable electrification” of heating and hot water systems, taking into account cost-effectiveness, market availability, and performance. All other systems that are not exempt for mission critical or emergency uses (e.g. all cooling, cooking, and laundry loads) must be electric. For these cases, equipment-specific replacement guidance is provided in an appendix to the standard. And while agencies should assess the cost-effectiveness of projects, current do not preclude electrification measures from being installed, even if found not to be cost-effective. Further, if potential facility upgrades are not implemented due to not being lifecycle cost-effective, then those facilities will not count towards the 30% requirement. those facilities will not count towards the 30% requirement.
How it compares to other building performance standards
Though the Federal BPS is a strong decarbonization policy that will have far-reaching effects on the fossil fuel use of the built environment in the U.S., it is not a BPS in the way that term has been most commonly used. Most BPS set performance targets — either in terms of energy or carbon — for each building type (e.g. one target for offices, another target for multifamily, etc.). Buildings subject to these policies have a set number of years, referred to as a cycle, in which to comply – with increasingly stringent targets in subsequent cycles. As the policy ages and new jurisdictional climate goals are identified, additional buildings may be included.
The Federal BPS, on the other hand, does not use performance targets, nor are requirements specific to building type. All building types and sizes may count towards the 30% target, with the goal simply to remove onsite fossil fuels. And, the policy does not add specific efficiency requirements. The standard states “electrification upgrades should [emphasis added] use high efficiency technologies and strategies to support energy use intensity reduction targets and deep energy retrofits”. In essence, it is an efficient electrification requirement being implemented by the nation’s largest landlord and it will drive tremendous retrofit activity with benefits to millions of Americans.
While the Federal BPS may not fit the more common definition of a BPS, it is not operating in a vacuum. The Executive Order on Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, for example, requires that all agencies achieve net-zero emissions across their portfolios by 2045, with a 50 percent reduction from 2008 levels by 2032. The focus of the current policy is on Scope 1 emissions, but the broader context will help ensure that equipment replacement is completed with both efficiency and electrification in mind.
Where the standard can go further
The Federal BPS provides a list of attributes that will determine which buildings are prioritized. In pursuit of more equitable and impactful standards, IMT recommends the following thoughts be taken into consideration:
- The number and location of federal properties will make this standard a significant step for electrification, particularly in regions that have historically been resistant to moving away from fossil fuels. To achieve the greatest decarbonization impact, however, agencies should prioritize facilities in areas where the grid is already cleaner.
- In addition to prioritizing locations served by a cleaner grid, electrification should also be applied in conjunction with efficiency and demand management in order to minimize increases in coincident peak electrical demand.
- Though the standard is correct to acknowledge that 100% electrification is not always feasible for a property or system, electrifying a building will have a greater impact when the need for onsite fossil fuels is removed entirely, and methane emissions associated with natural gas pipe leakage are eliminated. Priority should be given to buildings that do not require exemptions and are able to follow the performance path.
- Though the list already calls out buildings “located in an underserved community” as priorities, greater emphasis should be placed on making decisions with a lens to positively impact frontline communities. These standards should, for example, prevent inadvertent harm by way of shuttering buildings for agencies that provide a significant amount of jobs.
In addition to how buildings are prioritized, more detailed guidance on the following items will aid decision-makers:
- The prescriptive pathway recommendations are very helpful, and equipment replacement requirements for all buildings could be further clarified to prevent replacement of fossil fuel systems with inefficient electric resistance options, which can greatly increase demand and operating cost.
- With the anticipated amount of investment, there needs to be clarification if contracts and investments pertaining to the Federal BPS will fall under the Justice40 Initiative. This would be an unprecedented opportunity to create new jobs for frontline communities.
- Setting interim requirements is critical to making and tracking progress. When setting standards, however, it is important to balance the climate benefits of quick action with the reality of the longer-term processes of capital planning and budgeting, in addition to grid capacity and cleanliness.
Finally, exemption pathways should be clearly, but narrowly defined to prevent large swaths of buildings and systems from being excused from the standard.
Why the Federal BPS matters
The Federal BPS will likely prove to be a key instrument in encouraging electrification throughout the U.S., and serve as a unique motivator in those areas yet to fully embrace the switch from fossil fuels. The Federal government should take care to combine this bold step with additional requirements around energy efficiency, limitations on exemptions, and additional recommendations for priority buildings, emphasizing locations with cleaner grids and buildings that serve frontline communities. As additional local and state governments look to develop building performance standards of their own, the example set by Federal buildings coupled with the increased demand for new and efficient technologies will hopefully make the passage and implementation of these policies easier.