Maryland BEPS: Timeline and Recommendations for Building Owners [July 2024 Update]

Maryland is implementing a state-wide Building Energy Performance Standard (BEPS) for buildings 35,000 square feet and over as a requirement under the Climate Solutions Now Act of 2022. The proposed regulations have also established benchmarking and reporting deadlines for covered buildings. These regulations were first published in December 2023, followed by a new draft (PDF) in July 2024.

Let’s take a look at what we know so far about this new BEPS in the Mid-Atlantic region.

Maryland BEPS: What We Know Today

Goals

The goal of Maryland’s BEPS is to reduce the direct greenhouse gas (GHG) emissions and improve energy efficiency of the state’s building stock. To achieve that, the regulation requires covered buildings to meet both net direct emissions and energy use intensity (EUI) standards.

In December 2023, the Maryland Department of Energy (MDE) published the interim and final targets for net direct emissions and final site EUI targets for 2040 and beyond (PDF). Covered buildings under BEPS must meet or be below these specified standards in any given year starting in 2030.

Timeline

The baseline year for a building—the year of energy performance for which buildings will be measured under BEPS—will be the 2025 calendar year data, including the weather-normalized values of net direct emissions and site EUI of all covered buildings. The final, most stringent standard will be enacted in 2040 and beyond, while there are increasingly robust interim standards in the periods of 2030-2034 and 2035-2039.

Regarding benchmarking, building owners must submit an initial report for the calendar year 2024 by June 1, 2025. The baseline calendar year 2025 data must be submitted by June 1, 2026. In addition, the benchmarking data must be third-party verified every 5 years beginning on June 1, 2026, to ensure data quality and accuracy.

Benchmarking

The draft regulations have established requirements for benchmarking and third-party verification along with the approved qualifications of the verifier. However, the definition of “third party”—i.e. the verifier’s relationship to the building owner—is not yet determined. MDE aims to publish a verification guide and host informational sessions on several BEPS topics in August 2024 to address some of these questions. Information on these sessions is available here (Google Forms).

EUI Standards

While the December 2023 draft regulations included both net direct emission and site EUI standards, the July 2024 updated draft was published with only net direct emissions standards. These interim and final emission standards for the periods of 2030-2034, 2035-2039, and 2040 and beyond are listed in the regulations based on the property type. The previously proposed final site EUI standards have been removed from the updated draft. However, MDE aims to reestablish site EUI standards in 2027 based on 2025 baseline energy data.

Alternative Compliance Fees

The covered buildings’ reporting will be evaluated each year for compliance with net direct emission standards. If a building exceeds its standards, the owner is subject to an alternative compliance fee for every excess metric ton of emissions. The compliance fee is initially $230 per metric ton of excess CO2e in 2030, and it will increase by $4 per metric ton each following year.

Exemptions

There are some exemptions from benchmarking and BEPS. Conditions for exemptions include financial distress, no occupancy, or planned demolition during the reporting year. MDE may also determine to allow exemptions for reduced occupancy during baseline year and lower the compliance fines for affordable housing providers.

Planning for Maryland BEPS

Key Points

Building owners should keep a few key points in mind when preparing for BEPS:

EUI Standards

While site EUI standards will be revisited in 2027, the proposed targets published in December 2023 should act as a likely guide. Building owners should continue with their planning for necessary improvements to reduce energy usage.

There will be 3 years between the release of those targets and the first interim compliance year in 2030; owners should start preparing sooner rather than later.

Net Direct Emission Standards

Net direct emission standards remain in the regulations with no changes to timeline. These are the most robust standards of the two, and regardless of the site EUI target status, building owners must begin work now to reduce direct emissions and likely identify opportunities for electrification.

Owners are also advised to avoid installation of electric resistance heating as a building improvement strategy due to its unknown relationship to site EUI targets and future regulatory requirements.

Recommended Next Steps

Maryland building owners should aim to develop their short- and long-term goals now.

• The immediate next step is to start collecting all building data this year and prepare for the initial benchmarking reporting due in 2025.
• Building owners should plan to identify and make necessary improvements to comply with interim and final BEPS standards.
• It is not recommended to install new gas equipment or replace existing gas equipment with a similar make and model considering the net direct emission standards. A lower-carbon alternative should be explored if equipment is at or near the end of its useful life.

Maryland BEPS hits its first interim cycle in roughly 6 years. Building owners should start planning for improvements, consider electrical infrastructure upgrades, and communicate with their utility providers for BEPS compliance.

We’re ready to help Maryland building owners comply with BEPS. Contact us!

Contributors: Iffat Ridwana, Building Systems Engineer; Adam Szlachetka, Senior Building Systems Consultant