There is little doubt that House Bill 49, enacted on the final day of the 2025 Maryland General Assembly session, stands as the most consequential environmental legislation to emerge this year, perhaps the most impactful since the Climate Solutions Now Act of 2022. This sweeping departmental bill is a sea change in how Maryland regulates greenhouse gas emissions associated with buildings, and its effects will be felt in both public and private buildings across the state.
At its core, HB 49 refines and expands the State’s Building Energy Performance Standards (BEPS), the regulatory framework through which the Maryland Department of the Environment will enforce GHG emission reductions for large buildings, including condominium regimes. We have previously blogged about the statute and the Maryland 2024 BEPS Regulations: A Critical Analysis of Legal and Economic Risks.
Beyond administrative adjustments, this bill, as heavily amended through the last days of the session, lays the groundwork for a government mandated transformation of Maryland’s built environment to net zero GHG emissions by 2040.
The Legal Context: Building on the Climate Solutions Now Act
HB 49 is best understood as an ambitious evolution of the CSNA, which accelerated Maryland’s controversial climate agenda by mandating a 60% reduction in GHG emissions by 2031 (from 2006 levels) and net zero emissions for covered buildings by 2040. Among the key compliance tools in CSNA is BEPS, a regulatory mechanism for mandating GHG reductions in existing and newly constructed large buildings.
BEPS focuses on two primary mandates:
1. A 20% reduction in direct GHG emissions for covered buildings by 2030, relative to 2025 baselines.
2. Net zero direct emissions from covered buildings by 2040.
To support those goals, CSNA required building owners to begin reporting benchmarking data in 2025, but MDE’s original attempt to finalize implementing regulations faltered. Despite earlier announced dates, MDE issued a compliance advisory that it “intends to treat all initial benchmarking reports submitted by September 1, 2025, as timely.” However, the bill fails to take into account that the only MDE approved tool for benchmarking is Energy Star an EPA program that is all but certainly going to be cancelled. With that glaring omission, HB 49 course corrects regulatory gaps and adds new clarity and enforcement tools.
Key Provisions of HB 49
1. Expanded Regulatory Mandate for MDE
HB 49 directs MDE to adopt regulations that are significantly more comprehensive than before. Specifically, the bill requires:
• Additional special provisions, exemptions, and exceptions to account for real-world building conditions.
• Inclusion of study of Energy Use Intensity (EUI) targets, EUI “mandates” were amended out of the bill, also with study of alternative compliance pathways allowing fees in lieu of meeting these targets.
• Flexibility through waivers for owners who demonstrate economic or technical infeasibility.
• Annual reporting fees to fund administrative costs.
• Delayed enforcement ACP penalties cannot be collected before 2032.
This regulatory expansion reflects a legislative recognition that the BEPS program must balance climate change ambition with operational and financial realities, especially for diverse building types and ownership structures.
2. Refined Definition of “Covered Building”
Previously, any commercial or multifamily building over 35,000 square feet (excluding the garages) was a “covered building,” with few exemptions. HB 49 expands and clarifies those exemptions, most notably by:
• Excluding hospitals.
• Excluding life science buildings.
• Refining exemptions for manufacturing buildings.
• Recognizing secure federal facilities (e.g., SCIFs) and exempting them from EUI requirements.
These changes demonstrate a more nuanced legislative approach, targeting buildings that can reasonably contribute to emissions reductions while protecting those where compliance would be illogical or even hazardous or contrary to national security.
3. On Site Renewable Now Counts
The bill requires MDE to include in the new regulations:
• Crediting on site renewable energy toward EUI targets.
• Crediting the GHG reduction impact of biomethane.
4. Local Government Empowerment and Preemption Protection
In a notable but limited nod to local autonomy, HB 49 permits counties to administer their own BEPS programs if they are at least as stringent as the state program and adopted before March 1, 2025.
Montgomery County has already blazed this trail with its own local BEPS ordinance for buildings ≥25,000 square feet, and while different from the State when it regulates EUI and not GHG emissions, as a practical matter will all but certainly be the only local program that will allow covered building in that jurisdiction to not have to comply with the State BEPS.
5. Administrative and Fiscal Considerations
MDE is now authorized to collect a $100 fee to review annual benchmarking reports submitted by building owners.
MDE’s projections indicate that the department will need nearly $1 million in FY 2027 alone to support six new staff positions and associated overhead to administer the new BEPS regime. While annual reporting fees and waiver review charges will offset some costs, the State will likely need to supplement BEPS implementation with additional resources.
The bill’s delayed penalty collection (until 2032) provides MDE with breathing room to build capacity before full scale enforcement begins.
6. Study If All of this Should be Redesigned
And not to be lost on anyone, the final amendments to the bill provide, MDE “shall conduct an analysis of the potential costs and benefits of building energy performance standards policy options featuring direct emissions reduction requirements, energy use intensity requirements, ..” expressly including “recommendations on how to consider county owned buildings, community colleges, emergency facilities, manufacturing buildings, ..”
So, one must reasonably assume that the legislature will further alter and amend the BEPS regime prior to 2030; despite that all of this is contrary to the direction most of the rest of the country is moving toward with respect to GHG emissions.
Conclusion: BEPS is a Bloodsport
House Bill 49 (.. be certain to read this enrolled version that includes the final amendments) is not just a technical update, it is a legal and policy milestone. It recognizes that achieving Maryland’s climate goals will require not just regulatory mandates, but flexibility, innovation, and a deep partnership with the legislative branch.
By refining the BEPS framework, creating alternative compliance pathways, and ensuring fiscal mechanisms are in place to support building owners, HB 49 positions Maryland as a national leader or outlier (.. depending upon one’s perspective) in decarbonized building policy; at least until the courts rule in the several pending suits where Citizens and Businesses Join Suing Maryland to Halt BEPS or until the Federal government intervenes to halt BEPS.
Maybe most incredible is that despite U.S. EPA’s announcement it will end the Energy Star Program, including Portfolio Manager (.. the sole tool MDE has regulated must be utilized by building owners to report and reduce GHG emissions in BEPS), the legislature did not provide an alternative or otherwise correct that death knell.
As developers, property owners, environmental professionals, and legal practitioners digest this legislation, one thing is clear: the built environment is no longer a passive participant in matters of climate; in Maryland, real estate is now front and center.
For building owners and operators seeking guidance on HB 49 compliance, baseline GHG reporting, waiver preparation, or participation in the SEIF grant/loan program, legal counsel with experience in environmental matters is essential. Please feel free to reach out with any questions.
