Maryland is at the forefront of addressing climate change through its Building Energy Performance Standards (BEPS). This initiative underscores the state’s commitment to sustainable development and reducing greenhouse gas (GHG) emissions. At Baumann, we recognize the complexities of this new standard for building owners and property managers based on our experience with similar standards, such as Washington, D.C. In anticipation of this new standard, our goal is to demystify the process and provide an overview of the current legislation status.

The Present State of BEPS in Maryland

In line with the Climate Solutions Now Act of 2022, Maryland’s BEPS has set forth ambitious goals targeting buildings greater than 35,000 square feet and aims to improve air quality, public health, and meet climate pollution metrics. The December 2023 BEPS proposal will be officially withdrawn, making way for the updated July 2024 draft regulation, set to be proposed in September. Key elements of the latest draft, dated July 10, 2024, are as follows:

• Annual Reporting Requirements:
  • Building owners must report energy use and emissions data to Maryland Department of the Environment (MDE) annually starting June 1, 2025.
• Net Direct Emissions Standards:
  • Establishes standards for reducing net direct greenhouse gas (GHG) emissions.
• Site Energy Use Intensity (EUI) Standards:
  • The previously proposed EUI standards have been removed in the latest draft.
  • Future EUI standards will be established in 2027 after analyzing 2025 energy use data from covered buildings.
• Modifications and Clarifications:
  • Updated definitions for agricultural and manufacturing buildings are included.
  • Revises exemption procedures and public infrastructure property types.
  • Clarifies the application of the consumer price index.

Maryland’s commitment to advancing BEPS continues with significant updates and an inclusive approach. To ensure that the new regulations are well-informed and widely accepted, MDE will conduct a series of public outreach sessions in August 2024 to engage stakeholders and gather valuable input. This collaborative effort will culminate in a public hearing on the proposed action in October 2024, marking another step forward in Maryland’s BEPS journey.

Evaluating Compliance

As annual reporting is set to begin on June 1, 2025, the principal metric for evaluating compliance is the net direct emissions of buildings, measured in kg CO2e/ft². The table below shows net direct emission targets for a subset of buildings through 2040.

Of note, building owners should use the site EUI standards proposed in December 2023 as preliminary guidance when planning upgrades and improvements, even though EUI goals won’t be finalized until 2027. It is critical for building owners to consider the impact of electric resistance heating equipment on site EUI and future regulatory requirements before installation. This forward-thinking approach ensures buildings not only reduce direct emissions, but also enhance overall energy efficiency, aligning with Maryland’s climate objectives and public health goals. Continuous monitoring and annual reporting will support this evaluation process, enabling MDE to track progress and enforce compliance effectively.

To maintain transparency, MDE may also publish summary reports on the overall compliance status. This public accountability will help encourage adherence to the standards and highlight success stories. These measures provide an assessment framework that evaluates energy efficiency and environmental impact. Maryland’s roadmap toward BEPS compliance is designed to foster gradual but substantial improvements. The state has embarked on a carefully planned trajectory that considers ambition against feasibility, ensuring that the transition towards greener buildings is manageable and meaningful.

Pathway to Meeting New Standards

Benchmarking data shared with MDE in 2025 will be crucial for tracking performance and compliance with emissions standards. Annual reports from building owners will undergo verification, possibly involving cross-checks with utility records. MDE will also conduct periodic compliance reviews to identify buildings not meeting emissions standards and will continue to refine the monitoring processes based on annual data submissions, compliance reviews, and feedback from public outreach sessions.

Penalties for noncompliance will be issued starting in 2030 and will be $230 per metric ton of excess CO2e in 2020 dollars, adjusted for inflation. The penalty increases by $4 per metric ton of CO2e per calendar year in 2020 dollars, adjusted for inflation, in each calendar year and goes on indefinitely. However, the focus is on encouraging compliance and penalties may include notices of violation or corrective actions.

The BEPS program is expected to be implemented later this year, requiring building owners to benchmark their buildings and develop plans to meet the standards. The new BEPS requirements aim to transform building design, construction, and operation, benefiting the environment by reducing carbon footprints and enhancing residents’ quality of life.

Leveraging our deep experience with Washington D.C.’s BEPS, Baumann is uniquely equipped to guide you through Maryland’s regulations. Contact us to explore how we can support your benchmarking efforts, regulation navigation, and compliance strategy development.