In December, New York City joined a growing list of cities to pass legislation banning the use of natural gas in most new buildings.1 The bill prohibits combustion of any substance that emits 25 kilograms or more of CO2 per BTU. Starting after 2023, construction projects under seven stories must use electricity instead of fossil fuels as their energy source. This measure will go into effect for buildings over seven stories in 2027.2 Exemptions are available for manufacturing, laboratories, laundromats, hospitals, crematoriums, and commercial kitchens. The policy is projected to cut about 2.1 million tons of carbon dioxide emissions by 2040, equivalent to the annual emissions of 450,000 cars.3
The New York City Council followed the lead of Berkeley, San Francisco, Seattle, Denver, and New Jersey among many others in enacting legislation banning natural gas in new construction.
- Berkeley, CA banned all natural gas infrastructure in new construction, starting in January of 2020. The legislation does not apply to existing buildings, renovations, or additions.4
- San Francisco, CA implemented a similar policy in 2020, but attached a waiver good until 2021 permitting gas stoves in all-electric restaurants.5
- Seattle, WA approved a natural gas ban for space heating in commercial and apartment buildings taller than three stories effective January 2022. Additionally, existing commercial and apartment buildings will be required to wire for future electrification of appliances.6
- Denver, CO approved an ordinance at the end of 2021 requiring buildings larger than 25,000 square feet to switch to electric heating systems by 2025. In January 2022, the city will begin exploring an electrification requirement for all new buildings by 2030.7
- Under New Jersey’s Energy Master Plan, all buildings are required to be fully electric by 2050.8
Berkeley, CA was the first US city to ban natural gas infrastructure in new buildings in support of electrification, “the replacement of fossil-fuel-powered appliances equipment for electric appliances” (aka “fuel switching”). Electrification of new and existing buildings will allow for buildings to take advantage of an increasingly “cleaner” grid, which is integrating more non-emitting and renewable energy. As of 2019, residential and commercial buildings made up 13% of total US emissions.10
This regulation lines up with the closeout of COP 26, a global climate summit where attending participants were apprised of the urgency required to tackle some of these issues. However, differences remained on which countries should take most of the responsibility to curb greenhouse gas (GHG) emissions. As a result, many localities like New York are stepping in to help achieve the goal established in the Paris Climate Agreement of net-zero emissions by 2050. And with 80% of the buildings that will stand in 2050 already exist today, retrofitting existing buildings to operate using electricity will be more of a priority in these regions.11
In the US, natural gas is now responsible for more greenhouse gas emissions than coal. Globally, according to Environmental Research Letters, natural gas emissions are growing faster than any other fuel source. Beyond direct emissions of natural gas from use in cooking, heating, and laundry, the production and distribution of natural gas is also often associated with methane leakage, a GHG with 20-80x the climate-warming potential of carbon dioxide.12
So, what’s next for natural gas in the US? While many cities are looking to pass similar legislation to New York, others are seeking to pass state-wide bans on any limitations to natural gas, citing higher electricity prices and a consumer’s right to “energy choice.”13 Alabama, Arizona, Kansas, Kentucky, Louisiana, Oklahoma, Tennessee, and Texas passed legislation preempting any natural gas ban. Alabama, Kentucky, Oklahoma, and Texas also adopted policies to raise the price of energy deriving from renewable sources.14
Despite there currently being no federal legislation for building electrification, the natural gas ban in New York adds to a trend of more municipalities taking action to curb emissions. Although it may not be required in your area yet, working proactively towards more energy-efficient and sustainable buildings may pay dividends as more legislation like New York’s is passed around the country.
Cushman & Wakefield’s Energy and Sustainability Services team is prepared to help owners and property teams identify opportunities to reduce energy use and cost, as well as see lower GHG emissions. Our deep bench of building operations, energy, and engineering professionals provide our ability to translate building and energy data to actionable conservation measures. Leveraging our broad spectrum of expertise, we recommend best operational practices gathered from our portfolio to streamline operations and improve efficiencies properties, as well as provide insights into capital planning strategies and energy markets to reduce emissions.
