Colorado’s largest buildings will have to follow a carbon consumption diet plan to cut state greenhouse gas emissions, with the Air Quality Control Commission passing the controversial regulations over days of intense opposition testimony from property managers.
State air and clean energy officials said they tried to accommodate objections that efficiency modifications had premature deadlines, would cost too much, and may not achieve the targeted emissions cuts. But in the end, the commission late Thursday approved the basic plan requiring 8,000 Colorado buildings to slash carbon emissions 7% by 2026, and 20% by 2030.
Regulation 28 applies to apartments, office and industrial buildings over 50,000 square feet, and fulfills 2021 legislation that called for Colorado’s building sector to share in the carbon cuts demanded from other major polluters such as transportation, utilities and oil and gas drilling. Colorado regulators say large buildings are one of the five highest categories of commerce contributing to state greenhouse gas emissions, which must be trimmed overall by 50% by 2030, from a 2005 benchmark.
“Reducing pollution from large buildings is essential to meet our greenhouse gas pollution reduction targets and ensure that the state’s existing buildings are ready for Colorado’s clean energy future,” Colorado Energy Office Executive Director Will Toor said after the measure passed. “Today’s investments to improve building energy efficiency and reduce building energy use will save Coloradans money on energy costs and improve Colorado’s air quality for decades to come.”
Owners and managers of large buildings have been conducting energy use audits and greenhouse gas emission inventories and filing them with the state. They must now plan upgrades that will lower emissions from those initial benchmarks.
Landlords can cut the emissions they are responsible for through insulated windows, thickening walls, replacing furnaces and other appliances with efficient models running on clean electricity, and other measures. Under the state law and the new rules, the gains must be separate from requirements that Colorado’s utilities deliver cleaner power to their doorstep, and not double-count those emissions cuts.
Property managers continued their months of objections at days of hearings over the regulation. Building owners around the Purgatory ski resort in southwestern Colorado said they are isolated, with a single propane pipeline supplier whose own investments need to be paid back over time, so they can’t easily switch power sources. They also said individual condo owners in large residential buildings could be hit with expensive special assessments when efficiency renovations prove difficult.
Timing alone could make the efficiency rules impossible to meet, the Colorado Real Estate Alliance said, in rebuttals filed with the commission for the hearing.
“A 2026 target of any level will be difficult to attain,” the alliance said. “The final rule likely will not become effective much before the end of calendar year 2023. That will leave building owners with less than two years to secure and carry out audits to identify potential compliance pathways, raise capital, secure contractors, and acquire equipment in an economy still suffering from supply chain disruptions.”
A LoDo Denver building manager told The Colorado Sun before the hearing that meeting the targets would require renovations such as tripling insulation and thickening walls, and could cost $6 million for one five-story structure.
The rule’s authors and advocates say heating, cooling and lighting big buildings is the next promising target for greenhouse gas cuts, after Colorado has spent years going after coal-fired power utilities, oil and gas production, fossil fuel cars and trucks, and other industries. Large buildings are responsible for up to 20% of greenhouse gas emissions, the state says, and that’s separate from the emissions created by the utilities serving the buildings.
The Air Pollution Control Division, which provides staff research to the commission, wrote economic impact reports for Regulation 28 saying the rules will create $3.61 in benefits for every dollar spent on capital costs to cut greenhouse gas emissions.
The economic assessment predicts $6.4 billion in overall benefits to the buildings program through 2050, including about $5.2 billion in energy savings and $1.2 billion in “avoided social cost” such as disease from air pollution. The state’s projection puts total costs of making the changes at $1.8 billion over that time.
Colorado officials argue that the rules leave building owners flexibility in what efficiency measures they use to reach the new targets. They also pledged to link property managers with information about grants, tax credits and low-interest loans available from federal, state, local and utility sources that can make renovations cheaper.