Legal Bulletins

Governor Wes Moore’s recent executive order directs state agencies to take actions to meet Maryland’s extremely aggressive greenhouse gas reduction goals.  These actions are likely to impact every sector of the state’s economy and, indeed, the daily life of residents.

As regular readers of our bulletins know, Maryland adopted legislation to implement the most ambitious greenhouse gas reduction goals in the country.  Those goals included a 60% reduction in greenhouse gases by 2031 and “net zero” carbon emissions by 2045.  Maryland, with the assistance of the University of Maryland, published a “Pathway” of measures to implement those goals. The Executive Order calls for the implementation of many of the Pathway recommendations. 

The Executive Order directs all state agencies to take action to implement the Pathway recommendations but focuses on “immediate actions” to be taken by the Maryland Department of Environment (MDE), the Maryland Department of Transportation (MDOT) and the Maryland Energy Administration (MEA).

1. MDE is required to propose a “zero-emission heating equipment standard.”  That standard would phase out the purchase and use of fossil fueled equipment for heating and water heating.  We expect the phased-in prohibition would apply to natural gas, propane and heating oil equipment.  The Order does not specify the phase-in period or whether the prohibition would simply forbid replacement or, in the alternative, force equipment to be replaced before the end of useful life of existing equipment.  Note that this is in addition to the new regulations phasing out fossil-fuel equipment in larger buildings.  The new rules will apply to smaller buildings, potentially all the way down to single family homes.

2. MDE is also required to propose a “clean heat standard” which will impose fees and incentives to encourage switching from fossil fuels to renewable energy for heating and water heating similar to the fees imposed on the use of fossil fuels for electricity generation under the state’s Renewable Portfolio Standard.  The Order does not set forth additional details, but we assume the standards will collect fees on fossil fuel use and redistribute the revenues to underserved communities and to renewable energy projects.

3. Finally, MDE is required to propose a plan to the Regional Greenhouse Gas Initiative (RGGI) to use disincentives and incentives to transition power plants serving the region from fossil fuels to zero-carbon sources.  That initiative, however, would require the approval of the 11 New England and mid-Atlantic states in the coalition.  

4. The requirements imposed on MDOT have the potential to be equally disruptive but are not as detailed.  First, MDOT is required to take a series of steps to speed up the transition to zero-emission vehicles (primarily electric batteries) through a series of national and federal plans.  As pointed out in our recent bulletins, Maryland law already requires the phase out of sales of new fossil fuel powered light duty vehicles with a ban starting in 2035. The new actions to be taken by MDOT are intended to speed up and support that transition by increasing the availability of electric vehicle charging equipment.

5. MDOT is also required to evaluate all transportation projects for impacts on greenhouse gas emissions and to impellent investments, where feasible, in projects that “reduce vehicle miles traveled and enhance transportation choices in Maryland.”  This will likely divert funds from typical road and highway projects to public transportation.  This is specifically addressed in a separate requirement that MDOT establish specific “vehicle miles traveled reduction targets for the transportation sector.”

6. MEA’s mandate in the executive order is the least specific but, potentially, most far reaching.  The agency is required to “establish a framework for a clean energy standard to achieve 100% clean electricity in Maryland by 2035…” Currently, Maryland benefits from zero-emission generation by the Calvert Cliffs nuclear plant but 36% of power generated in Maryland is from natural gas with natural gas production tripling since 2015.  Coal produces a much smaller percentage, but the regional power operator (PJM) has publicly stated that the closure of the last coal power plant would risk brown outs and black outs unless a transmission line to import power from out of state was completed first. 
   
   Replacing all fossil fuel energy generation by 2035 is a very tall order.  Replacing all energy consumption with non-fossil fueled generation is even more difficult since about 40% of Maryland electric consumption is imported from other states.[1]  Accordingly, the Order contemplates recommendations from MEA for expanded authority through legislation.

7. The Order also contains a number of intergovernmental directives to focus agencies on a climate agenda.  This includes the creation of a Sub-Cabinet on Climate chaired by the Secretary of MDE and including at least 13 separate officials that would need to submit annual reports on progress.  Every agency, including those in the Sub-Cabinet, will be required to submit a Climate Implementation Plan (“CIP”) listing actions required to comply with Maryland’s Climate Plan, including “top priorities for the upcoming year”, detail any anticipated gap in funding, describe the potential benefits from implementation and how environmental justice will be advanced by addressing “the disproportionate impacts of climate change for underserved and overburdened communities.”

In summary, the executive order redirects the ship of state towards the implementation of the Pathway report.  The recommendations of that report will clearly impact every sector of Maryland’s economy with benefits and detriments along the way.  If you would like more information concerning this executive order or Maryland’s climate initiatives, feel free to reach out to Michael Powell at mpowell@gfrlaw.com, Colleen Collins at ccollins@gfrlaw.com or any of the other members of our Energy and Environment Team.