Green Building Law Update

Environmental Law and Sustainability for Business

Greenstalling Isn’t Real: Understanding Business Realities in Climate Action

By Stuart Kaplow on Posted in Climate Change, greenwashing

Last week’s Climate Week NYC was driven by the theme “It’s Time,” a rallying cry meant to emphasize the urgency of climate action. However, a new term emerged in that highly charged environment, “greenstalling.”

This concept, according to some of the radical environmental movement voices at the New York event, is that businesses are deliberately stalling their climate efforts posing a significant risk to global climate change mitigation. There is a chasm between the iconoclastic, uncompromising, discontented radical global warming crowd who believe in taking direct action in defense of the planet versus the concern of many businesses over denigrating the current way of doing things before there is a replacement.

But is “greenstalling” really a thing? Or is this label just a misguided attempt by those frustrated with the coopting of mainstream environmentalism to explain complex business realities?

The Reality: Businesses Face Economic and Political Uncertainty

Businesses in the U.S. and around the world grapple with more than just environmental goals.

Businesses face economic and political instability that affects their ability to plan long-term including climate strategies. Newly proposed regulatory schemes including where governments will for the first time cap carbon are inconsistent, with environmental rules often swinging from stringent to lenient depending on location and political shifts. One minute, there’s a push for aggressive decarbonization; the next, the rules are relaxed or delayed, like in the case of courts ruling ill conceived Building Emissions Performance Standards (BEPS) local laws are preempted by longstanding federal statutes, where potentially far reaching SEC greenhouse gas (GH) emission regulations are voluntarily stayed by the federal agency in court proceedings, etc. This back and forth creates an uncertain playing field for companies, making it difficult to justify costly decarbonization investments when there’s no clear regulatory path ahead.

Moreover, businesses must contend with greenwashing reputational risks and litigation. Companies that announce their environmental commitments or compliance with government mandates (e.g., reporting required BEPS data can be misleading) can face lawsuits and public backlash. These lawsuits, coupled with the high costs of decarbonization and the complex regulatory landscape, have made some companies rethink their bold public facing climate pledges. A target like “Net Zero by 2045” might sound great in a press release, but when companies are sued for greenwashing in making such a claim because part of their solution includes offsets or the like, when the regulatory framework is unclear and the economic outlook is shaky, companies are naturally more cautious.

The Public’s Changing Priorities: Climate Takes a Backseat

In the early 2010s, sustainability was the buzzword on everyone’s lips. Companies rushed to declare their green credentials, and consumers clamored for environmentally responsible products. But today, the fervor has cooled. Climate change, while still a concern for many, has lost its shine as the most pressing issue for businesses. Other priorities, such as inflation, supply chain disruptions, and technological innovation, have taken center stage. As a result, some businesses have started to walk back their public facing ambitious GHG emission reduction goals. Others have delayed investing in unproven and unavailable decarbonization technologies and are instead pursuing innovation based solutions.

This shift away from in your face climate action has left some radical environmentalism advocates frustrated, which may explain the rise of terms like “greenstalling.” But blaming businesses for “stalling” their climate efforts ignores the broader context. The issue is not that businesses don’t want to act. It’s that the cost, uncertainty, and shifting broader societal and regulatory demands make it hard to act. In many ways, it’s less about stalling and more about recalibrating in the face of competing demands and an unpredictable future.

Enter “Green Bleaching” – The Silent Approach

While environmentalists mistakenly cry foul over “greenstalling,” a quieter and more nuanced practice has actually emerged, “green bleaching.” Unlike “greenwashing” which involves exaggerating or falsely claiming environmental achievements, green bleaching is the opposite, it involves concealing sustainability efforts. Companies engaging in green bleaching deliberately downplay or omit their green initiatives in public communications.

Why would a company choose to keep its environmental actions under wraps? One reason is fear of backlash. In today’s hyper connected world, where any claim can be scrutinized and litigated, businesses might find it safer to keep their sustainability programs out of the spotlight. The rise in lawsuits tied to greenwashing has made companies wary. Instead, they prefer to quietly do the work without attracting too much attention. There’s also the fear of public perception: if a company announces a climate target and fails to meet it or it does not meet some group’s ideal of how far the business should go, the reputational damage can be severe.

Green bleaching, then, is not about inaction but rather about protecting the company from potential risks associated with being too vocal about its environmental efforts.

Can the Market Police Itself?

As climate rhetoric heats up (.. likely faster than the planet itself), a growing number of voices are calling for a less activist government role in regulating greenwashing claims. After all, these are often consumer protection issues at their core. Shouldn’t the marketplace police itself? Some argue that letting consumers and watchdog organizations hold businesses accountable for false environmental claims would be more efficient and effective than government mandates.

However, this hands off approach is not without risks. Without regulatory oversight, the door could be left open for companies to mislead consumers under the guise of green marketing or, conversely, to hide genuine sustainability efforts out of fear of litigation.

The Middle Ground: Balancing Authenticity and Reputation Management

As companies navigate the tricky terrain of sustainability, they must find a balance between transparency and caution. Greenwashing erodes trust, while green bleaching can make it difficult for consumers and stakeholders to assess a company’s true environmental impact. Today there is no middle ground, where authentic communication avoids overblown promises but still provides enough transparency to maintain public trust, although I am confident that businesses, not government, will drive the innovation that will be central to the solutions.

What’s clear is that “greenstalling” isn’t real. The term oversimplifies the challenges businesses face and unfairly paints them as villains in the fight against climate change. Businesses are not deliberately stalling but are instead reacting to a complex mix of regulatory, economic, and public pressures. If anything, the current times call for more nuanced discussions about corporate sustainability, where the focus is on fostering innovation and genuine action rather than pointing fingers at alleged stalling tactics.

As businesses, large and small across the globe, work to find their footing in an ever evolving landscape, it’s essential to recognize that sustainability is not a linear journey. The path forward will be filled with setbacks, recalibrations, and, yes, as we often advise our clients, silence, but I am optimistic that doesn’t mean progress isn’t happening.

Eyeglasses versus Emissions: Are We Losing Sight of the Bigger Picture?

By Stuart Kaplow on Posted in Climate Change, GHG, greenhouse gas

In his recent video, “Can We Stop Global Warming?” Bill Gates provides us with an interesting, if not somewhat alarming, statistic, the average greenhouse gas (GHG) emissions from producing a single pair of eyeglasses amount to 8.2 pounds.

This figure doesn’t include emissions from glasses cases or cleaning cloths, nor significantly the environmental costs of delivery to the end user. While metal eyeglass frames contribute more to GHG emissions than plastic ones (.. actually most are acetate), both contribute to the growing carbon footprint of global manufacturing.

This revelation adds to the recent conversation about the environmental impact of consumer goods, even those as essential as medical devices like glasses. And yes, while it’s true that sustainability and environmental awareness are worthy, this raises a moral question: at what point does the all but singular focus on greenhouse gas emissions hinder, rather than help, human health and progress?

A Surprising Focus on Eyeglasses

Let’s face it: discussing the carbon footprint of eyeglass frames can seem like a stretch, but it is a subject de rigueur in social media. Are we veering into hysteria when we start accounting for the GHG emissions of individual medical devices, especially ones as vital as eyeglasses? It’s a fair question ever when considering individual consumer devices, and one we’ve been guilty of perpetuating in our blog post about smartphones.

The scrutiny of eyewear manufacturing is part of a broader trend to try to quantify the environmental costs of everything. It’s good to communicate environmental impact to stakeholders. However, when cradle-to-grave analyses dive too deep into matters of an individual’s physical, mental and social well being, each made better by eyeglasses, they may obstruct rather than aid the critical global human health need for corrective vision.

We do not recall any public hue and cry over the GHG emissions of syringes, blood pressure monitors, thermometers, or bandages and dressings, so it is curious eyeglasses are the boogeyman of the day.

Vision Impairment: A Global Health Crisis

More than 4 billion people worldwide wear eyeglasses, and for good reason.

But, according to the World Health Organization, more than 2.2 billion people suffer from some form of uncorrected near or distance vision impairment. This is not just a minor inconvenience; it’s a public health crisis that stifles education, employment, and quality of life. For children, uncorrected vision problems can significantly impact development and learning, making early detection and treatment crucial.

Eyeglasses are more than just a consumer product, they’re a lifeline to clarity, education, and opportunity for billions. The cost per pair might be as low as $2, but the huge unmet demand for affordable eyewear has persisted for decades, particularly in low and moderate income countries.

The Environmental Cost of Eyeglasses: Freight and Globalization

Interestingly, a recent academic study that gained widespread media attention pointed to an alarming trend: globalization has not only expanded access to eyeglasses but also increased GHG emissions associated with their transport. The study noted a more than fourfold increase in emissions from global transport, with the logistics of moving lenses and frames across continents contributing significantly to the environmental impact.

For instance, it’s not uncommon for lenses to be cut and shaped in one part of the world (.. one of the largest lens manufacturing plants is in France), with frames manufactured in another (.. more than 90% of all eyeglass frames are produced in China). Both are then shipped to North America, whether ordered from a brick and mortar store on online retailer via expedited shipping including overnight delivery, a notoriously high emission mode of transport. The study recommends that optometrists and wealthy Western country patients be mindful of these global supply chains when ordering lenses and frames, suggesting that modifying these routes could be an essential part of mitigating climate change. Really?!

Balancing Sustainability with Human Need

Undoubtedly, any significant aim at mitigating climate change requires contributions from many, including the medical field and yes, even optometry. However, the need for eyeglasses is not just a commercial or environmental issue, it’s a global health crisis. For more than 2 billion people, the inability to access affordable eyewear is a barrier to human quality of life and progress.

Few would oppose exploring sustainable solutions, but at the same time, we cannot allow GHG emission reduction goals to further deprive people of the vision correction they need. There’s a fine line between responsible environmental stewardship and inadvertently impeding human well being, and the global eyeglasses industry sits squarely on the side of human beings.

While it’s important to be aware of the GHG emissions from consumer products, we must keep perspective. The global need for corrective vision is far too critical to be stymied by well intentioned but potentially harmful anti global warming policies. Vision correction is essential to improving quality of life, and for more than 2 billion men, women, and children still in need, eyeglasses are the key.

Tortoise shell eyeglasses are not only a classic choice for eyewear, but also a good example of moving toward a sustainable future. Originally, these frames were made from real tortoise shells, but this practice fell out of favor in the 1970s due to ecological concerns and today tortoise shell ‘style’ eyeglasses are made from acetate.

Conclusion

There is little dispute that we should strive to reduce our environmental footprint. However, eyeglasses are medical devices and any such push must be balanced against a pressing global health need. Sustainability is important, but for billions of people, the ability to see clearly is even more urgent.

Rather than a singular obsession with GHG emissions, we should work towards solutions that don’t compromise accessibility to vital medical devices like eyeglasses. After all, the goal of climate change mitigation should not blind those who already face a vision crisis, it should illuminate a way forward that supports both the environment and human progress.

Howard County Real Estate Contract Required Provisions

By Stuart Kaplow on Posted in Codes and Regulations, Local Government

The huge real estate industry wide changes that were effective August 17, 2024, literally rewriting the process of contracting for the sale and purchase of residential real estate across the U.S., do not change the legal requirements that those contracts include disclosures, notices, and other geographically specific provisions.

The explanation for the changes in how houses will be bought and sold is that in 2023, a federal court found that the National Association of Realtors together with several large real estate brokerage firms, conspired to inflate Realtors’ commissions. (Note, a Realtor is a licensed real estate agent who belongs to the National Association of Realtors, arguably the largest trade group in the country.) The parties settled after a $1.8 Billion jury verdict which resolution included an overhaul in how residential real estate is advertised for sale on Multiple Listing Services, the way real estate agent commissions are now paid, etc.

Post August 17, when more than 50% of buyers find the home they purchase online, many residential sellers and purchases alike are wondering if they need to pay a real estate commission or, maybe more accurately if they need a real agent at all? (Note, 6% of $500,000 is a $30,000 commission for a real estate agent  for the average house in Howard County that last quarter sold for more than the asking price and was only on the market for 10 days before a contract was signed.) This is much more than surfing Redfin (.. which was in the past a form of escapism for many and a noncontact sport for others) when today untold numbers of houses for sale can be found on Tik Tok?

When drafting a real estate contract there are federal, state, and local law requirements, including environmental disclosures and disclaimers that must be included. Some suggest the sale of residential real estate is among the most highly regulated industries. However, identifying mandatory contract provisions for a residential contract of sale is not hard; it is not like trigonometry but more like long division (.. you just have to show your work).

The failure to include required provisions can, depending upon the jurisdiction, make the contract void or voidable by one party or the other, and in some instances even make entering into such a contract a misdemeanor.

Again, requirements vary from place to place. Howard County, Maryland is a great example to consider, both because it was recently ranked as the wealthiest locality in the State and sixth wealthiest county in the U.S. based on median household income.

It is a long time since 1652, when the Susquehannock tribes signed a peace treaty with the Maryland governor, giving up their provenance over the territory, in what was arguably the first real estate conveyance in what is now Howard County.

Today many of the government mandates that must be contained in a contract of sale are environmental matters. First, there are federal and state lead based paint disclosures and information requirements that must be given for structures erected before 1976. 40 CFR Part 745 (Section 1018 of Title X); MD Environmental Article, Sec 6-801.

Second, Howard County Code Section 17.502. provides (2) A prospective buyer shall indicate by signing an addendum to the contract or a separate section of the contract printed in boldface type, that: (i) The seller has notified the buyer of the buyer’s right to examine the current general plan maps and current generalized zoning map; and (ii) The buyer acknowledges such notification by the seller and understands that in order to become fully informed of current and future roadway improvements and land use plans, the buyer should consult the Howard County Department of Planning and Zoning, 3430 Courthouse Drive, Ellicott City, Maryland 21043.

Third, in the event the property is subject to the imposition of mandatory fees as defined by the Maryland Homeowners Association Act or is a condominium unit, there are state law requirements for matters that must be included in a contract and documents exchanged, and this is a big deal in Howard County where one of those association’s the Columbia Association is home to approximately 100,000 people. If that community association is within a building that is 35,000 square feet or more there are regulations proposed that mandate a specific greenhouse gas emissions disclosure that must be accompanied by emission data.

Fourth, a purchaser must be “advised that the property may be located near a military installation that conducts flight operations, munitions testing, or military operations that may result in high noise levels.” MD Real Property Article, Sec 14-117(k).

Fifth, a contract must contain “Section 14–104 of the Real Property Article of the Annotated Code of Maryland provides that, unless otherwise negotiated in the contract or provided by State or local law, the cost of any recordation tax or any State or local transfer tax shall be shared equally between the buyer and seller.” MD Real Property Art., Sec 10-711

Sixth, mandatory disclosures as to the condition of the residential property, including a host of specific residential matters that need to be described (e.g., are there any hazardous or regulated materials (including, but not limited to, licensed landfills, asbestos, radon gas, lead-based paint, underground storage tanks, or other contamination) on the property?), and while state law allows a seller to disclaim those matters rather than disclose them it is a violation of state law to not disclose latent defects including latent environmental defects. That is, it is not possible to sell residential real property in Maryland truly “as is.” MD Real Property Article, Sec 10-702.

There are a host of other matters beyond the scope of government mandated disclosures discussed here that should be properly considered in a residential real estate contract of sale in Baltimore County (.. including if a real estate agent is involved) but it is of great import that these matters be included in contracts written by a seller or purchase themself without the assistance of a real estate agent.

There is no get out of jail free card because a party writes the contract themself. Of import Section 17.504 of the Howard County Code provides that the failure of a seller to provide these required notices “would constitute a violation of Title 24, ‘Civil Penalties’ of the Howard County Code and may result in a Class B offense under Title 24 against the Seller.”

In preparing this blog post, we searched online for contract of sale forms for a residential contract for a property in Howard County, and not one on the first five pages of a Google search appeared to be accurate and complete.

Mandatory requirements for entering into a residential contract of sale may cause some parties to use a real estate agent even post August 17. Others may determine to have a contract written by an attorney at law. However, it appears more likely than not that the majority of home sellers will now list their house on any one of a number of online services and that purchases will present contracts that they have prepared or had prepared by an attorney, sidestepping the use of real estate agents.

This post may be a good checklist of matters that should be considered by a seller or purchaser of residential real estate in Howard County in advance of consulting with an attorney about the form of contract.

Make no mistake, the selling of residential real estate is radically altered for the better. We can assist you in saving time, inconvenience, and expense with your residential contract of sale and the resultant transaction across Maryland.

Maryland 2024 BEPS Regulations: A Critical Analysis of Legal and Economic Risks

By Stuart Kaplow on Posted in Climate Change, GHG, greenhouse gas, State

On September 6, 2024, the Maryland Department of the Environment issued a notice reproposing the Maryland Building Energy Performance Standards (BEPS) aiming to implement a key provision of the Climate Solutions Now Act of 2022. That is, the prior proposed 2023 BEPS regulations have been withdrawn, and new 2024 BEPS regulations have been proposed.

While the full text of the reproposed regulatory action appeared in the Maryland Register on September 6, 2024, you can read it there at New Subtitle COMAR 26.28 – Building Energy Performance Standards for new Regulations .01 – .04 and withdrawal of the proposed 2023 Building Energy Performance Standards, or you can read this blog post explaining our comments on the new regulations, highlighting why they are constitutionally problematic and detailing their failure to appropriately implement the enabling statute.

Constitutional Violations.

There is much that could be commented on, however in the interest of efficacy in clearly communicating the complete and utter failure of these regulations to appropriately implement what was a careful balancing of interests by the Maryland legislature in the Climate Solutions Now Act of 2022, the regulatory scheme proposed by MDE is completely constitutionally barred. What is proposed is constitutionally preempted by the federal Energy Policy and Conservation Act.

The proposed regulations also violate the First Amendment when they will force individuals and businesses, as a consequence of merely being connected to utility service in Maryland, irrespective of whether or not they own a “covered” building to publicly disclose an inexact, misleading calculation of their greenhouse gas emissions. Such runs headlong into the Dormant Commerce Clause and violates broader constitutional principles, which will no doubt be the subject of federal court challenges to these BEPS regulations.

Key Issues with the Reproposed Regulations

It should be lost on no one that the enabling statute, the Climate Solutions Now Act of 2022 does not provide for any meaningful reduction in GHG emissions when it only seeks to regulate “net direct greenhouse gas emissions,” but these regulations risk irreparably harm the Maryland economy, without any meaningful benefit. Against that backdrop, we reproduce here only a dozen of our comments:

1. Government Missed the Deadline.  That the schedule for these regulations, “on or before June 1, 2023, the Department shall adopt regulations to implement ..,” as prescribed in the enabling statute, has been missed (.. by more than a year and nothing is yet adopted) is more than simply a little problematic for the real estate industry which thrives on certainty. To state the obvious, these regulations are only now proposed and will not be final until, at best, months hence, after building owners are mandated to begin collecting GHG data on January 1, 2024 (.. yes, retroactively), using methodologies proposed in those regulations. The prolonged uncertainty in implementing this sweeping program, when GHG emissions had never been calculated for government before, with regulations that will at best be two years late, is untenable to those regulated. Of note, the SEC has stayed its GHG reporting and California’s nationwide GHG reporting is being legislatively delayed. The hard dates for businesses to act as prescribed in the statute must be moved back, realistically by not less than 2 years.   

2. Portfolio Manager as Sole Benchmarking Tool.  In section 26.28.02.B.(10), the definition of the Benchmarking tool as the sole method to measure and report data as Energy Star Portfolio Manager is problematic for several reasons, not the least of which is measuring GHG emissions is a perversion of what Energy Star was created to do, and it does not do it well. At a minimum, there should be more than one way to measure GHG emissions when the overarching goal of this effort is to reduce GHG emissions. Additionally, if a building actually reduces its GHG emissions by 20% in advance of January 1, 2030, such should be in compliance with the law irrespective of some Energy Star score (that may or may not reflect any reduction in GHG emissions from 2022 or otherwise). If the expectation is that all covered buildings will have an Energy Star score of 80 or better by January 1, 2030, such is not what the statute contemplates and is simply neither practicable nor efficacious (e.g., an older structure in Baltimore City with an Energy Star score of 47 today, will never be able to reasonably achieve these targets, greatly disadvantaging the states older urban areas and their populations, while putting a finger on the scale in favor of Montgomery County with its newer taller suburban structures and affluent demographics).

Moreover, Energy Star scores are a moving target that are updated increasing over time, which is not something the statute permits. The misuse of Energy Star as other than a voluntary scoring tool also presents very real concerns about who owns the GHG emission data, including matters of confidentiality (see more on this below). Finally, as noted this benchmarking was not the purpose Energy Star was created for, so with the regulations devoid of a definition of “net zero net direct greenhouse gas emissions” will some yet to be disclosed Energy Star data extrapolations make that determination for buildings in Maryland? 

3. Rationing Energy Use.  The regulation of Energy Use Intensity is not authorized by the statute and the move in the proposed regulations to simply delay regulation of EUI until 2027, does nothing to cleanse the fundamental objection to the state government rationing electricity on a per square foot basis. Of great import, this misapplication of what the legislature authorized (.. and why the legislature put these regulations on “hold” and then prohibited budget dollars from being expended on matters of EUI, last session) what is proposed about EUI does not reduce net direct GHG emissions for covered buildings, what this whole body of law is about, but rather rations energy use putting a cap on how much energy a residential apartment or a hospital can use on a per square foot basis. Additionally, MDE’s choice to regulate “site” EUI as opposed to “source” EUI is simply wrong if, again, the overarching goal is reducing GHG emissions, because Maryland is and will remain a huge net importer of electricity (.. so, as proposed, this entire new regulation of EUI burdens Maryland covered building owners, but does nothing about the emissions from a coal fired electric generating plant in Tennessee that supplies Maryland buildings?).

Best left for another day is that the building activity site energy targets are crazy low and cannot stand. For example, compare the normative primary energy target to those in ASHRAE Standard 100 and see what a national standard describes as reasonable and still resulting in reduced energy consumption.

Most significantly, the statute simply does not authorize a penalty for failure to achieve an EUI “target” (.. that is, EUI is expressed only as a target versus other jurisdictions that have BEPS that regulate EUI but not GHG emissions). Overreaching to regulate how much electricity is used in a building is also regressive ignoring the embedded carbon in the built environment benefiting a building that stands empty, or for the fewest hours per week, and is not utilized to its maximum efficiency. (A Maryland county library official has articulated that the only way for his libraries to meet the requirement will be to operate fewer days and fewer hours each week.) But the real externality of this regulatory scheme will be an environmental justice problem making winners out of modern suburban buildings (.. think Montgomery County) and losers out of older urban adaptive reuses (.. think Baltimore City).

Particularly disconcerting is that this proposed regulating of EUI is that it is the worst form of apocalyptic environmentalism, with MDE articulating that unless covered building owners drastically reduce consumption, humankind with its growing numbers and appetite will overwhelm the planet’s ecosystems.

4. Who can Verify GHG Data?  In section 26.28.02.C., the requirement for “third party verification” of benchmarking reports is described, in part, and then referencing the Technical Guidance, is too narrowly defined including limiting that work to be done by engineers. Today, the federal government including other programs in EPA allows a broad breadth of professionals, and nationwide, it is attorneys at law who most often provide that type of verification (e.g., opinions of counsel on green bonds [including for Maryland state issued sustainability bonds], on Fannie Mae green project mortgages, etc.); and accountants supported by attorneys provide that third party verification in SEC matters and the like. The regulations should be broad including that attorneys, accountants, and others, who are already doing this work in the GHG space, can and should be authorized to provide those verifications in Maryland.

5. Tenant Owned Mechanical Systems.  The proposed regulations are devoid of the statute’s Environment Article, Section 2-1602, required “special provisions or exceptions” including for buildings where the commercial tenant installed, owns, and is responsible for the building energy systems. This is not a matter of environmental efficacy but rather does not reflect an understanding of how many covered buildings are owned and operated. This is a major void.

The regulation is anti ingenuity and rejects innovation when it does not include a provision, as required by the statute for allowances for the use of biofuels, does not provide for fuel cells, makes no provision for hydrogen power generation, does not touch on building carbon capture or for that matter any technology based solution.

6. Residential Condos.  Okay, not a comment on the regulations, but concomitantly to the comment above, Environment Article, Section 2-1602 should be expanded to address residential condominiums, coops, and the like (.. today, the statute only allows a dispensation for buildings with “commercial tenants”) where the law burdens the building owner, but where the building energy systems as well as cooking, hot water and laundry appliances are almost always owned and controlled by individual unit owners.

7. No Variances or Waivers.   The regulations do not include variance or waiver provisions and not only would such ameliorate the harsh effects of the law but could provide real and good alternative compliance paths as well as altered schedules to achieving Maryland’s ultimate net zero goals. Most similar building energy regulatory schemes across the country, including the model ordinance provided on the website of the consultant engaged by Maryland, include a variance process.    

8. No Allowance for Offsets.  The regulations do not provide for compliance by way of offsets. Offsets will be key for many buildings to be able to achieve net zero. Both the White House’s proposed definition of zero emission building and LEED Carbon Zero allow for offsets. By way of example, offsets through Maryland based organics recycling facilities including food waste based compost would allow Maryland businesses to do more to reduce their GHG and provide for flexibility in meeting the State’s requirements while allowing for ease in auditing. Of course, reducing food waste is another of the several of the aims of SB 528 of 2022, not only from the perspective that it is the single most common material landfilled in the U.S. but also results in more than 14% of total U.S. methane emissions and more than 8% of anthropogenic GHG emissions, offering an opportunity for meaningful reductions. The 2022 statute identifies pursuing organics recycling facilities, and offsets associated with using organics recycling, including food waste contributed to nutrient rich soil amendment and compost should be provided for in these regulations.

9. GHG Data Ownership.  Maybe most significantly of all of these comments, the regulations do not address who owns the GHG emissions data the State now demands be calculated, collected, and publicly reported, but worse the regulations pervert existing precepts of privacy and confidentiality provided for by federal and state law. The statute only provides,

“(D) ELECTRIC COMPANIES AND GAS COMPANIES SHALL PROVIDE ENERGY DATA, INCLUDING WHOLE–BUILDING AND AGGREGATE DATA, TO THE OWNERS OF COVERED BUILDINGS FOR BENCHMARKING PURPOSES.”

.. which verbiage in and of itself arguably does no harm, but does not attempt at allocating responsibility and costs between owners and occupiers of buildings when both are necessary participants to comply with this new body of law that only regulates ‘owners’. But then these regulations add section 26.28.02.02.04.A.

“(7) For covered buildings with fewer than five tenants, electric ..”

.. differentiating building occupancies and creating a bar for landlords from obtaining the required data from many tenants (including those with leases and renewal terms that stretch for years). If there is any one issue that must be addressed, this is it. Matters of accuracy, transparency, and incentives are key considerations for ensuring that this data is effectively used to address the challenges of climate change. Today, organizations must mitigate the risk associated with keeping their own data safe and this regulation must address that, but it does not. And all of that is before the dollar costs to landlords now being charged by tenants for providing that data and likewise.

10. EV Charging but No Backup Power.  Section 02.02.04.B(5), excluding electric vehicle charging from benchmarking is not authorized by statute and will not only result in a jaundice report (i.e., electric truck charging stations are huge users of electricity and more). If MDE desires to pick winners and losers in forms of transportation so be it, but don’t fudge the numbers on the energy truthfully and factually used at some buildings, but not others (e.g., that makes Portfolio Manager data less than reliable). The legislature chose to protect first floor restaurants, but it did not choose to protect electric vehicle charging. This should be deleted.

Similarly, backup power is a life safety issue mandated by building codes as well as a business necessity (from nursing homes to police stations, and highrise residential structures, etc.), especially as the grid becomes less reliable. Stand by and backup generators should be exempt from this regulation.

11. Sales Disclosure Requirements.  The entire new subsection 02.05. requiring disclosures before a contract of sale is entered into for a covered building is inappropriate, not authorized by statute, and could only negatively alienate the sale of real estate across the state. There is no similar requirement in Maryland law promulgated by regulation and not authorized by statute. And requiring a buyer’s signature on the addendum simply does not reflect the reality of how contacts are entered into, and real estate transferred. This provision must be deleted.

12.  A Penalty Disguised as a Compliance Pathway.  Chapter 04. Alternative Compliance and Special Provisions describe an alternative compliance pathway that is an excessive fine imposed and not what the legislature contemplated. When the General Assembly enacted SB 528 in April 2022, the social cost of C02 as estimated by the EPA was $51 a metric ton. Politics in Washington DC being what it is, as a result of a change of the party in the White House, the social cost of ‘greenhouse gas’ is now estimated at between $180 and $230 a metric ton; so to use that larger measurement (i.e., GHG versus C02) and higher dollar (not $51 but $230) and to add an annual CPI escalation on top of that is not what the legislature enacted, and is not supported by facts.

Conclusion

The proposed 2024 Maryland BEPS regulations fall short in several critical areas. The penultimate observation must be that the regulations risk causing irreparable harm to the Maryland economy (where nearly 90% of businesses and nearly 40% of residents are located in a covered building) without providing for any meaningful reduction in GHG emissions. That is, these regulations propose only to capture “net direct GHG emissions” from covered buildings which are a subset of all Scope 1 GHG emissions, that are less than 2% of a building’s total GHG emissions (Scope 3 emissions account for more than 90%) and the entire building sector may represent less than 29% of all GHG emissions with these ‘covered’ buildings being a subset of maybe 12% of all private Maryland buildings, but exempting most government buildings including schools; so not much in the way of GHG emissions are being reduced.

In the statute that is the Climate Solutions Now Act of 2022, the General Assembly found that “the State has the ingenuity to reduce the threat of global warming and make greenhouse gas reductions a part of the State’s future ..,” but these regulations do the opposite, and attempt to impose apocalyptic environmentalism on the State. Such is the polar opposite of what the legislature believed in making a techno optimism finding that ingenuity and science, properly applied, can help produce our way out of our predicament. These proposed regulations contradict the idea of employing ingenuity in the important work of reducing GHG emissions. The proposed regulations seek to ban natural gas appliances and force all electric buildings on the public.

Maryland has enacted the most rigorous state law in the country reducing GHG emissions and otherwise addressing climate change. Residents of multi family buildings and businesses alike can and should treat this as the greatest responsibility and opportunity of our time. But for such to be successful, substantial revisions to the proposed regulations are necessary and proper, including the ideas expressed above.

MDE will hold a virtual public hearing on the proposed action on October 9, 2024, at 1:00 p.m. You can join the meeting from your computer at https://meet.goto.com/522777173. You can also comment to MDE by that date to  BEPS.MDE@maryland.gov.

We are available to assist Maryland businesses in navigating these regulatory challenges, including providing turnkey services for GHG tracking and compliance.

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You may want to join BOMA Baltimore at lunch this Thursday, September 12 when I present “Decarbonizing Buildings in Maryland” explaining the new regulations. Details are here.

Delay in Corporate Greenhouse Gas Reporting in California has Implications for All of Us

By Stuart Kaplow on Posted in Climate Change, GHG, greenhouse gas, State

In a move that signals a significant shift in the pace of climate reporting laws, California is on the verge of delaying key requirements for corporate greenhouse gas (GHG) emissions reporting. Last Thursday, a legislative committee advanced SB 219, a bill that would slow the implementation of two recently enacted climate disclosure laws. This development has major implications not only for California but for the thousands of companies across the country that do business in California and the untold numbers that do business with a California corporation.

Understanding California’s Climate Disclosure Legislation

California has long been a pioneer in environmental laws, and its Corporate Data Accountability Act and Greenhouse Gases: Climate Related Financial Risk Law are no exception. An analysis of those two laws can be found in our post, California Passes Groundbreaking Climate Disclosure Bills.

Under existing law, the state was set to adopt regulations by January 1, 2025, requiring certain businesses to annually disclose their Scope 1, Scope 2, and Scope 3 GHG emissions. Scope 1 emissions cover direct emissions from owned or controlled sources, Scope 2 involves indirect emissions from the generation of purchased electricity, and Scope 3 includes all other indirect emissions that occur in a company’s value chain.

Key Provisions of SB 219

However, with the advancement of SB 219, these requirements are likely to face delays. The bill proposes pushing back the deadline for adoption of implementing regulations to July 1, 2025. Moreover, the timeline for reporting Scope 3 emissions, which is often the most challenging and complex category, would be delayed further, with a specific deadline yet to be determined.

SB 219 would also amend existing requirements for large corporations, “not just in California, but around the world” disclose climate related financial risks to California authorities, also aligning with Governor Gavin Newsom’s proposed revisions.

The Broader Implications

The passage of SB 219 seems almost certain, especially given Governor Newsom’s recent proposal to delay the reporting deadlines even further, until 2028 for Scope 1 and Scope 2 emissions, and until 2029 for Scope 3 emissions. The governor’s proposal also suggests postponing the requirement for companies to report climate related financial risks until 2028.

This delay in California’s climate reporting legislation comes at a time when the environmental industrial complex faces significant opposition. Various industry groups, including the U.S. Chamber of Commerce, California Chamber of Commerce, and American Farm Bureau Federation, have filed a lawsuit against the state in the U.S. District Court for the Central District of California, challenging the GHG emissions reporting mandates. Additionally, the Securities and Exchange Commission has voluntarily stayed its own rules requiring public companies to disclose GHG emissions, further complicating the regulatory environment. We blogged about the ligation in a post, SEC Climate Disclosure Stay and Venue Now in the 8th Circuit.

A Return to Reality?

When signing the original climate disclosure legislation last year Governor Newsom’s comments foreshadowed the current developments. He said, “.. the implementation deadlines in this bill are likely infeasible, and the reporting protocol specified could result in inconsistent reporting across businesses subject to the measure. I am directing my Administration to work with the bill’s author and the Legislature next year to address these issues.” But he signed the laws anyway?

With SB 219, California is taking a step back to reassess its approach, possibly setting a precedent for other states with ambitious climate reporting mandates, including BEPS mandates.

It has been suggested an amendment will be offered to this bill providing a liability bar and safe harbor for businesses reporting GHG emissions in good faith, even if the data turns out to be flawed, in an attempt to cure a major flaw of the existing laws (.. as well as BEPS laws across the country) that they unconstitutionally compel speech in violation of the First Amendment.

Others have suggested this bill and the underlying laws will be made better with data security protections for GHG emission data.

As California reconsiders its timeline, it’s likely that other states, from Colorado to Maryland can be anticipated to follow suit, slowing down their own climate reporting initiatives. While the delay may frustrate some environmental advocates, it reflects the challenges of implementing GHG emissions reporting (.. and note that these California laws merely require reporting, while BEPS laws and the like in other jurisdictions go further and mandate after reporting that GHG emissions be reduced or in the instance of Maryland eliminated from buildings by 2040) in a complex and varied business landscape.

This bill cannot cure that these laws (as are other BEPS laws across the country) are preempted by federal law and run headlong into the dormant Commerce Clause and broader federalism principles. The courts will no doubt bar governments from enforcing these laws.

Conclusion

SB 219 marks a significant moment in the evolution of climate disclosure laws. The bill’s advancement suggests a growing recognition of the practical challenges involved in GHG emissions reporting. As the legislative process continues, businesses and policymakers alike will be watching closely to see how California’s decisions influence climate reporting mandates nationwide.

In the coming months, the conversation around corporate climate responsibility will likely shift as more states reconsider the feasibility of their own GHG reporting deadlines. While the ultimate impact of SB 219 remains to be seen, it is clear that California’s decision will have ripple effects across the country.

Environmental Justice at Risk After Louisiana Ruling

By Stuart Kaplow on Posted in Environmental, Federal

Last Thursday, the Federal Court in Lake Charles, Louisiana, issued a judgment that may have far reaching implications for environmental justice across the United States.

The court granted the State of Louisiana permanent relief, enjoining the U.S. Environmental Protection Agency and the Department of Justice from imposing or enforcing any disparate impact based requirements against the state or any state agency under Title VI of the Civil Rights Act of 1964. While the ruling technically applies only to Louisiana, its significance is likely to resonate nationwide, especially because environmental justice has gained prominence as a key social movement.

The Background of the Case

The case centers around the EPA’s enforcement of regulations tied to Title VI of the Civil Rights Act, which prohibits recipients of federal financial assistance from administering programs that result in discrimination based on race, color, or national origin. The EPA and DOJ have long had regulations on the books that prohibit not just overt discrimination but also practices that have a disparate impact, unintended discriminatory effects, on protected groups. However, it is suggested that the EPA has rarely, if ever, taken enforcement actions based on these regulations because their enforceability is dubious.

Congress did not have environmental justice in mind when it enacted the Civil Rights Act in 1964. The EPA was not even created until 1970, which suggests this entire significant regulatory scheme exists on slippery ground.

For decades, Louisiana state agencies have certified their compliance with these disparate impact regulations. However, in 2015, several environmental groups in Louisiana sued the EPA for its failure to enforce these rules, arguing that the lack of enforcement allowed environmentally hazardous activities to disproportionately harm communities of color. In response, the EPA began to take the matter more seriously, proposing a consent order to resolve the issue.

Louisiana, however, saw this as an overreach. The state argued that the EPA was essentially using Title VI as a tool to impose its vision of environmental justice, which the state claimed would require them to engage in racial discrimination to avoid disparate impacts (.. reverse discrimination). Louisiana rejected a proposed consent order and initiated legal action to block the EPA’s enforcement efforts.

The Court’s Decision

In January 2024, the court issued a preliminary injunction in favor of Louisiana, preventing the EPA from enforcing its disparate impact regulations while the case was pending. Last Thursday’s judgment made that injunction permanent, effectively barring the EPA and DOJ from applying these requirements to Louisiana.

The court’s decision underscores a fundamental tension in environmental justice policy: the balance between preventing discrimination and ensuring that efforts to protect vulnerable communities do not themselves result in discriminatory practices. Louisiana argued that the EPA’s approach would force state agencies to make decisions based on race, potentially violating the very civil rights laws the agency was trying to enforce.

Implications for Environmental Justice

This ruling is particularly significant because it comes at a time when environmental justice is a growing priority for policymakers, activists, and communities across the country. The EPA, under the current Administration, has been ramping up efforts to address environmental disparities, recognizing that low-income communities and communities of color are often disproportionately affected by pollution and other environmental hazards.

The court’s ruling in favor of Louisiana raises questions about the limits of federal agency authority in enforcing environmental justice policies that are beyond express statutory authority. If other states follow Louisiana’s lead, the EPA could face significant challenges in implementing its environmental justice agenda, particularly in states that are resistant to federal intervention.

The Bigger Picture

This case highlights the complex legal and ethical issues at the intersection of environmental protection and civil rights. While the EPA’s mission to ensure that all Americans enjoy equal protection under environmental laws is of course laudable, the methods used to achieve that goal must be carefully balanced to avoid unintended consequences; and, this includes state environmental agencies with similar missions.

As the nation grapples with how best to achieve environmental justice, this ruling serves as a reminder that the path forward is not always straightforward. Balancing the need to protect vulnerable communities with the principles of fairness and non discrimination will require thoughtful, nuanced approaches. The Louisiana case is quite likely the turning point in this ongoing debate, setting the stage for future legal battles and policy decisions.

In the meantime, the EPA’s new Title VI guidance, issued just days before the court’s decision, makes clear that under the current Administration, the agency is not backing down from its commitment to environmental justice (and even expanding it to include limited English language proficiency, disability, and age). A change of the political party in the White House would upset the apple cart. If not how the EPA navigates the legal landscape in the wake of this ruling will be closely watched by all stakeholders in the environmental space.

Checklist of Required Real Estate Contract Provisions in Baltimore County

By Stuart Kaplow on Posted in Codes and Regulations, Local Government, State

The dramatic changes last Saturday in contracting for residential real estate across the U.S. do not alter the requirements that those contracts of sale include disclosures, notices, and other provisions required by law.

Anyone who thinks this is simply about reducing commissions paid to Realtors does not understand.  

The quick backstory is that in 2023, a federal court found that the National Association of Realtors together with several large real estate brokerage firms, conspired to inflate Realtors’ commissions. (Note, a Realtor is a licensed real estate agent who belongs to the National Association of Realtors, the largest trade group in the country.) The defendants settled the $1.8 Billion jury verdict which resolution included an overhaul in the way real estate agent commissions are paid after August 17, 2024.

In residential real estate transactions, agents are typically paid a commission between 5% and 6% of the home’s sale price. That commission has usually been paid by the seller. And prior to August 17, that commission was then split equally between the seller’s agent and the purchase’s agent. But no more.

Post August 17, in the current Internet age meets our ‘do it yourself’ society, many residential sellers and purchases alike are wondering if they need to pay a real estate agent or, maybe more accurately if they need an agent at all? (Note, 6% of $500,000 is a $30,000 commission for the average house that is on the market for 22 days before a contract is signed.) This is much more than surfing Redfin (.. which was in the past a form of escapism for many and a noncontact sport for others) when today untold numbers of houses for sale can be found on Tik Tok?

When drafting a real estate contract there are federal, state, and local law requirements, including environmental disclosures and disclaimers that must be included. Some suggest the sale of residential real estate is among the most highly regulated industries. Identifying mandatory contract provisions for a residential contract of sale is not hard; it is not like trigonometry but more like long division.

The failure to include required provisions can, depending upon the jurisdiction, make the contract void or voidable by one party or the other, and in some instances make entering into such a contract a misdemeanor.

Again, requirements vary from place to place but Baltimore County, Maryland is a great example to consider, both because it has more contract requirements than any place we know of, and the failure to include those required provisions in Baltimore County can be a misdemeanor and upon conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 30 days or both; yes, this can actually be criminal.

It is a long time since the first Maryland lawmaking assembly of freemen enacted the first laws for the conveyance of land on February 26th, 1634.

Today much of what government mandates be contained in a contract of sale are environmental matters. First, there are federal and state lead based paint disclosures and information requirements that must be given for structures erected before 1976. 40 CFR Part 745 (Section 1018 of Title X); MD Environmental Article, Sec 6-801.

Second, there is a relatively new requirement that there be included a “notice of zones of dewatering influence” using the specific language required by state law that must be in bold and underlined. MD Real Property Art., Sec 10-711.

Third, there is a mandate that the seller disclose if a house has been relocated from the 100 year floodplain. Baltimore County Code Sec 32-8-208.

Fourth, in the event the property is served by a private water supply (.. a well) there are certain disclosures including mandatory testing requirements in county law that include prescribed forms for “waiver of yield requirement for improved property” to “waiver of chemical quality prior to conveyance” as may be appropriate. MD Real Property Art., Sec 10-711, and Baltimore County Code Sec 32-2-104 and Sec 32-2-102.

Fifth, if the property is served by a private sewerage facility (.. a septic system) specific disclosures are required, including if there are privately imposed fees for that septic or a water system all of that must also be separately disclosed by state law and County code. Baltimore County Code Sec 20-1-112.

Sixth, the County requires a panhandle lot disclosure to be included in each contract whether or not the residence is located on a panhandle driveway. Baltimore County Code Sec 35-3-303(2)(ii).

Seventh, a notice that the property may be subject to a development plan is required, which notice includes information on where a development plan may be viewed. Baltimore County Code Sec 35-3-301(b)(2).

Eighth, similarly there is a requirement that a contract contain a specified notice in bold that the County has a Master Plan (.. a land use plan) that may be viewed in the County office. Baltimore County Code Sec 35-3-301(b)(i).

Ninth, many places in the country require a “right to farm” disclosure and Baltimore County has its own required text for land within five hundred feet of an R.C. 4 zoning District. Baltimore County Code Sec 35-3-303(b).

Tenth, whether or not a property is designated as or proposed to be historic must be disclosed. Baltimore County Code Sec 32-7-107.

Eleventh, in the event the property is subject to the imposition of mandatory fees as defined by the Maryland Homeowners Association Act or is a condominium unit, there are state law requirements for matters that must be included in a contract and documents exchanged. If the condominium is within a building that is 35,000 square feet or more there are regulations proposed that mandate a specific greenhouse gas emissions disclosure that must be accompanied by emission data.

Twelve, if the property is rented, not only does the County have a rental registration program, but such must be disclosed in the contract. Baltimore County Code Sec 35-6-109.

Thirteenth, there is a state law requirement for disclosure that the property may be located in the “critical area” of the Chesapeake and Atlantic Coastal Bays. MD Real Property Article Sec 14-117(d).

Fourteenth, a purchaser must be “advised that the property may be located near a military installation that conducts flight operations, munitions testing, or military operations that may result in high noise levels.” MD Real Property Article, Sec 14-117(k).

Fifteenth, a contract must contain “Section 14–104 of the Real Property Article of the Annotated Code of Maryland provides that, unless otherwise negotiated in the contract or provided by State or local law, the cost of any recordation tax or any State or local transfer tax shall be shared equally between the buyer and seller.” MD Real Property Art., Sec 10-711

Sixteenth, mandatory disclosures as to the condition of the residential property, including a host of specific residential matters that need to be described (e.g., are there any hazardous or regulated materials (including, but not limited to, licensed landfills, asbestos, radon gas, lead-based paint, underground storage tanks, or other contamination) on the property?), and while state law allows a seller to disclaim those matters rather than disclose them it is a violation of state law to not disclose latent defects including a latent environmental defect. That is, it is not possible to sell residential real property in Maryland truly “as is.” MD Real Property Article, Sec 10-702.

There are a host of other matters beyond the scope of government mandated disclosures discussed here that should be properly considered in a residential real estate contract of sale in Baltimore County (.. including if a real estate agent is involved) but it is of great import that these matters be included in contracts written by a seller or purchase themself without the assistance of a real estate agent. There is no get out of jail free card because a party writes the contract themselves and again as described above, this may actually be a misdemeanor in Baltimore County if you get this wrong.

In preparing this blog post, we searched online available contract of sale forms for residential contracts for a property in Baltimore County, not one on the first five pages of a Google search appeared to be accurate and complete.

Mandatory requirements for entering into a residential contract of sale may cause some parties to use a real estate agent even post August 17. Others may determine to have a contract written by an attorney at law. However, it appears more likely than not that the majority of home sellers will now list their house on any one of a number of online services and that purchases will present contracts that they have prepared or had prepared by an attorney, sidestepping the use of real estate agents.

This post may be a good checklist of matters that should be considered by a seller or purchaser of residential real estate in Baltimore County in advance of consulting with an attorney about the form of contract.

Make no mistake, the selling of residential real estate is radically altered for the better. We can assist you with your residential contract of sale in Maryland.

Berkeley’s Natural Gas Tax is a Warning to Building Owners Nationwide

By Stuart Kaplow on Posted in Uncategorized

After being told by the courts that its attempts to prohibit the installation of natural gas piping within newly constructed buildings were constitutionally preempted by Federal law, now the City of Berkeley is trying to ban natural gas by taxing it out of existence.

Building owners across the country should pay heed as it is apparent that state and local government attempts to ban natural gas, be it by text amendments to building codes, BEPS mandates, or the like, will fail as preempted by Federal law and this transmogrified tactic of taxing fossil fuel out of existence is coming to a jurisdiction where you live or operate a business.

On July 30, the Berkeley City Council voted to put an initiative, “The Large Buildings Fossil Fuel Emissions Tax” ordinance, on the November 5, 2024, ballot.

The citizen initiative provides, “the buildings emissions tax is intended to disincentivize natural gas consumption and greenhouse gas emissions, thereby increasing the number of commercial and large residential property owners switching energy sources from fossil fuel gas to electricity, while also raising funds for municipal services, including funding a program to: reduce greenhouse gas emissions rapidly through decarbonizing buildings; support unionized trades and municipal jobs; and improve public safety, health, and indoor and outdoor air quality.”

If approved by a simple majority of voters, the Large Building Fossil Fuel Emissions Tax would tax buildings 15,000 square feet or larger on their natural gas use beginning in 2025. The tax would apply to approximately 609 buildings in Berkeley.

City Council staff estimate that the tax would generate $26.7 million in its first year. The tax rate would escalate annually by 6% plus the local consumer price index. The estimated first year tax collection is larger than Berkeley’s total annual sales tax revenue and is about a third of Berkeley’s annual property tax receipts.

In a draconian alternative compliance path, if the owners of affected properties perceive the Large Buildings Fossil Fuel Emissions Tax to be overly burdensome, they could choose to remove the property from the market, leaving it vacant, thus avoiding the tax; .. really.

The City Council staff made clear, that the Large Buildings Fossil Fuel Emissions Tax is a carbon tax, based on high estimates of the social cost of carbon (a local advocacy group’s extrapolation, not EPA’s). The goals of this initiative, to disincentivize greenhouse gas emissions and increase funding for building electrification and climate action programs, are aligned with adopted City plans. 

Local media has raised the concern of the already fast and dramatic increasing electricity bills in California, but low income housing advocates and small business owners alike appear to not be getting significant traction in the campaign over this ballot initiative as opposed to those who would ban fossil fuel.

LaTanya Bellow, the interim City Manager told the Council, “If successful in its intended purpose, this initiative could reduce or eliminate natural gas use in existing buildings throughout Berkeley, thereby reducing the greenhouse gas emissions associated with buildings. Such reductions would help achieve Berkeley’s goal of becoming a Fossil Fuel Free City and mitigate climate change impacts.”

Or spun another way, despite that the Federal appellate courts have told the City “the Energy Policy and Conservation Act (“EPCA”), 42 U.S.C. § 6297(c), expressly preempts State and local regulations concerning the energy use of many natural gas appliances, including those used in household and restaurant kitchens” striking down the City’s prior attempted outright ban on new natural gas installations as constitutionally preempted by federal law, now Berkeley is attempting to tax gas appliances out of existence.

And despite that tax laws are often given greater deference (.. as opposed to generalized laws) by the judicial branch, in this instance, it looks like a duck, swims like a duck, and quacks like a duck, so it is a duck, preempted by Federal law under the Supremacy Clause of the U.S. Constitution.

The initiative and accompanying staff report are a worthy read because attempts to ban natural gas, be it by building codes, BEPS mandates, or the like, will all fail as preempted by Federal law and this new tactic of taxing fossil fuel out of existence is coming to a jurisdiction where you live or operate a business.

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We are offering a fun and fast webinar entitled, “With ‘new’ reproposed Maryland BEPS regulations what does a Building Owner do now?” this Tuesday, August 13 from 9 – 9:30 am EDT. The webinar is complimentary, but you must register here.  

The Paradox of Banning Electric Vehicles in Older Garages: Legislative Intent vs. Structural Reality

By Stuart Kaplow on Posted in Climate Change, Environmental

Electric vehicles symbolize a future where clean energy and sustainable transportation go hand in hand. However, the transition to this future isn’t as straightforward as merely legislating the right to charge EVs in garages multifamily buildings. Key among the issues is that EVs are hundreds to thousands of pounds heavier than their gasoline counterparts due to their large batteries.

Recent trends reveal a significant paradox: while laws like those in Maryland aim to facilitate EV adoption by mandating the installation of charging equipment, residential condominium boards are increasingly restricting or outright prohibiting the use of such equipment within older garages. These moves raise crucial questions about infrastructure, safety, and the practical challenges of integrating new technology into old spaces.

Legislative Landscape: Right to Charge Laws

Laws such as Maryland’s “right to charge” statute are designed to remove barriers for EV owners living in multifamily buildings. These laws typically prevent condo associations from unreasonably restricting the installation of EV charging stations, acknowledging the growing demand for electric vehicles and the need for accessible charging infrastructure.

However, other recently enacted laws mandate structural integrity reserve studies for many common interest community controlled high rise buildings and those studies have identified the risks EVs may pose without significant capital upgrades to garages assuming the structural and power work is even feasible not to mention reasonably fundable by the building owners. It’s in the outcomes of these government mandated reserve studies that the crux of the issue lies.

The Weight of the Matter: Structural Concerns

Electric vehicles are significantly heavier than their gasoline counterparts due to their large, powerful batteries. For instance, the battery of an electric GMC Hummer alone weighs about 2,900 pounds—nearly the entire weight of a Honda Civic. Similarly, the Audi E-tron SUV weighs about 5,765 pounds, compared to the Ford Explorer SUV’s 4,345 pounds.

These substantial weight differences have led to growing concerns about the structural integrity of older parking garages. Experts warn that these garages, not designed to support such heavy loads, could be at risk of collapse. Consequently, many condo boards, heeding these warnings, are deciding that the safest course of action is to prohibit EV parking in their garages.

It is worthy of note that the average weight of vehicles sold in the U.S. has irrespective of this issue increased by over 900 pounds over the last 30 years as Americans moved from sedans to pick up trucks and SUVs. So, garages are already accommodating more weight than many were designed for.

Parking garage collapses in Manhattan and Baltimore last year are not blamed on EVs, but underscore the structural issues of large numbers of garages built in the 1960s and 1970s with different weight assumptions or that may not have been well maintained.

Fire Risks: A Hot Topic

Beyond structural concerns, there are also significant safety issues related to the fire risk posed by EVs. A Mercedes-Benz EV that was not charging erupted into flames in a residential building garage last week in Seoul to more than 8 hours to extinguish destroying dozens of other vehicles and leaving the building above uninhabitable. Lithium battery fires, which can burn at extremely high temperatures and are notoriously difficult to extinguish, pose a potential hazard in confined spaces like parking garages. This risk further justifies the reluctance of some condominium boards to allow EVs in their older facilities.

Legislative Intent vs. Practical Reality

The laws designed to encourage EV adoption are encountering the practical realities of aging infrastructure. While the intent behind these laws is to promote sustainable transportation, the structural limitations of older buildings cannot be ignored. This tension is particularly evident in the actions of condominium boards, which must prioritize the safety and structural integrity of their buildings.

A Look Across the Pond: The UK’s Approach

Interestingly, the UK is currently working on new regulations for the country’s more than 6,000 multi story car parks to address these very concerns. While similar regulatory updates have not yet been seen in the U.S., it’s clear that private owners and condominium boards are proactively addressing the structural issue.

The Trend: Restriction Over Adoption

Despite the push from legislative bodies to integrate EVs into everyday life, the trend among condo boards from Los Angeles to Baltimore and Manhattan to Miami, is leaning towards restricting EVs from older garages. This movement is accelerating, particularly at a time when demand for EVs appears to be weakening. There is no good data that correlates the soft demand for new EV sales to consumer response to highrise building garage prohibitions, but buyers are hesitant.

Conclusion: Navigating the Transition

The journey towards widespread EV adoption will no doubt be one of unintended consequences, involving a delicate balance between legislative efforts and practical infrastructure challenges. As we continue to innovate and move towards a more sustainable future, it’s crucial to address these structural and safety concerns head on. Ensuring that our buildings can safely accommodate the weight, and the fire hazards, not to mention the increased electricity load of EVs is essential for fostering a future where electric vehicles are truly a part of everyday life.

In the interim, solutions like relegating charging equipment to surface parking lots may serve as a compromise, allowing EV owners to charge their vehicles safely while protecting the integrity of older buildings. The evolution of regulations and building standards will undoubtedly play a pivotal role in resolving these challenges, paving the way for a smoother transition to an electric future, however, in the present it may be reasonable for condo boards for older buildings with garages to address the extra poundage by keeping EVs out.

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We will be offering a webinar entitled, “With ‘new’ reproposed Maryland BEPS regulations what does a Building Owner do now?” on Tuesday, August 13 from 9 – 9:30 am EDT. The webinar is complimentary, but you must register here.  

With ‘new’ proposed Maryland BEPS regulations what does a Building Owner do now?

By Stuart Kaplow on Posted in Climate Change, GHG, greenhouse gas, State

After this post, on September 6, 2024, the Maryland Department of the Environment announced the 2023 Building Energy Performance Standards proposed regulation has been withdrawn and new 2024 BEPS action has been proposed. The full text of the proposed regulatory action appears in the Maryland Register and you can read it there. Or faster and easier you can read the post below ..

On July 15, the Maryland Department of the Environment released new draft proposed Building Energy Performance Standards (BEPS) regulations with net direct greenhouse gas emissions standards.

MDE has announced that it will “officially withdraw the December 2023 BEPS” proposed regulations and publish these new draft regulations in September 2024. The Department intends to hold a public hearing on the proposed BEPS regulations in October. 

The BEPS regulations require buildings 35,000 square feet and larger to achieve certain greenhouse gas emission reductions by 2030 and achieve net zero greenhouse gas emissions by 2040.

Very importantly this proposed regulatory action must be viewed in the context of the Maryland Governor’s Executive Order on June 4, 2024, that includes as an “immediate action” that MDE will propose a zero emission heating equipment standard regulation that will phase in zero emissions standards for heating equipment having the effect of banning not only natural gas, propane, and also heating oil in public and private buildings, large and small (i.e., not limited to building 35,000 sq ft and larger to regulated under BEPS), but, maybe not including fossil fuel for cooking?

These reproposed regulations are largely unchanged from the first released draft in 2023. We provided a detailed analysis in 2023 that remains relevant in Maryland Building Energy Performance Standards Effective January 1. Key among what is modified, the revised regulations: 

Establish requirements for building owners to report energy use and emissions data for the period beginning January 1, 2024, to MDE annually with the first report due June 1, 2025.

Modify the agricultural building definition (.. yes, to answer the question that is often asked, cannabis growing facilities are exempt), manufacturing building definition, exemption procedure, public infrastructure property types, and the consumer price index for clarification.

And delay implementation of the proposed site energy use intensity (EUI) standards. MDE says it “intends to establish site energy use intensity (EUI) standards in 2027” .. “after analyzing 2025 energy use data from covered buildings and submitting a report as required by the Budget Bill (Fiscal Year 2025), SB 360/Chp. 716 of 2024.” MDE further expressly advises, “building owners should refer to the site EUI standards proposed in December 2023 as general directional guidance when they plan improvements to their buildings.”

Note that the draft does not only apply to existing building owners and tenants, but the regulations also mandate new disclosures in real estate contracts so prospective buyers and sellers need to be cognizant of what is proposed.

Be aware that no other state is going as far and as fast as Maryland when these reproposed regulations impacting buildings, from multi family residential to offices and including retail and hospitals, implement the state’s economy wide broader edict for a reduction of greenhouse gas emissions by 60% below 2006 levels by 2031 and reaching net zero emissions by 2045, through decarbonizing privately owned buildings, but exempted the majority of government buildings from this mandate.

The 2024 BEPS draft proposed regulation can be found here.

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We will be offering a fun and fast paced webinar entitled, “With ‘new’ proposed Maryland BEPS regulations what does a Building Owner do now?” on Tuesday, August 13 from 9 – 9:30 am EDT. The webinar is complimentary, but you must register here.  

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