Dive Brief:

  • The U.S. Department of Energy finalized a rule Wednesday to phase out fossil fuel use in newly constructed federal buildings and those that have undergone extensive renovations.
  • Under the Clean Energy for New Federal Buildings and Major Renovations of Federal Buildings Rule, federal agencies must reduce their on-site fossil fuel use by 90%, compared with 2003 levels, in construction and renovation projects started between 2025 and 2029 and entirely eliminate on-site fossil fuel use in new projects beginning in 2030.
  • The DOE estimates that over the next 30 years, the new rule will cut carbon emissions from federal buildings by 2 million metric tons and methane emissions by 16,000 tons. The rule is intended to help the federal government achieve the Biden administration’s federal sustainability goals, Brenda Mallory, chair of the White House Council on Environmental Quality, said in a news release Wednesday. 

Dive Insight:

The rule implements the Energy Independence and Security Act of 2007, DOE said in the release. The EISA’s goals for federal agencies include improved energy performance, increased building efficiency and more widespread use of clean fuels. 

The EISA lays out certain thresholds and criteria that determine which federal buildings are subject to its energy efficiency regulations. Buildings are accordingly classified under two categories.

The first category includes new federal or majorly renovated public buildings. A public building requires the submission of a prospectus to Congress if the total cost of constructing, altering or acquiring the facility exceeds $1.5 million, with the U.S. General Services Administration authorized to adjust this value annually to factor in construction cost increases. For fiscal year 2024, for example, the GSA’s annual prospectus threshold is about $3.6 million, the rule notes. The threshold for altering leased public buildings is half of the cost threshold for renovation of federally-owned buildings, or approximately $1.8 million in 2024.

The second category includes non-public federal buildings that are new or have been renovated, with construction or renovation costs of at least $2.5 million, adjusted for inflation. As of the most recent update last October, that is an equivalent of approximately $3.8 million, the rule says. 

The DOE rule also highlighted the possibility of federal agencies breaking up major renovations into smaller pieces to circumvent the applicable cost thresholds and said it aims to discourage this practice. Federal buildings complying with the rule are expected to reduce pollution, improve air quality, create well-paying jobs and garner cost savings through the use of more energy-efficient equipment. These measures, the department said, would “lead the way” to achieving President Biden’s goal of net-zero emissions from all federal buildings by 2045. 

“President Biden has charged the Federal Government to lead by example by transforming its footprint of over 300,000 buildings to be more energy efficient and climate resilient,” Mallory said.

“With federal facilities contributing over 80% of government climate pollution, taking fossil fuels out of the equation for new construction and major renovations is paramount,” David Smedick, federal and international policy manager with the carbon-free buildings team at clean energy nonprofit RMI, said in an email, noting that the rule fulfills a “long-standing Congressional directive.” Combined with energy efficiency initiatives like the Federal Building Performance Standard, these actions will not only reduce costs and air pollution but also drive innovation in the efficient appliance market and clean energy economy, Smedick said.

The rule will not only reduce air pollution in cities with major federal offices, but also “unleash the buying power of the federal government for electric space and water heating appliances,” Sierra Club said in a statement Wednesday. This market influence, the environmental organization noted, will drive down costs of energy-efficient electric appliances.

In a blog post Thursday, RMI recommended that state and local governments follow suit. The organization cited an internal analysis that points to the potential for decarbonization measures in state and local government buildings to cut 6% of building greenhouse gas emissions — approximately 38.6 million metric tons a year. This is an equivalent of emissions from all private and public U.S. office buildings, RMI said. 

The DOE said it will issue supplemental guidance on the rule through its Federal Energy Management Program, providing federal agencies with pathways for compliance, and that it will support agencies as they work to meet these targets by “providing resources, opportunities for grant funding, training and technical assistance.”