Tag: SPAC – Sustainability Policy Advisory Committee

EPA Releases “NextGen” Criteria for Low-Carbon Buildings

Posted on by Abigail Grenadier
EPA's NextGen Building Label

The Environmental Protection Agency (EPA) released long-awaited final criteria on Tuesday for ENERGY STAR’s voluntary “NextGen” certification to recognize buildings with reduced carbon footprints.

Three Criteria

  • NextGen builds upon ENERGY STAR’s popular “label” for highly efficient buildings. The new label has three criteria that must be independently verified to:

    • Demonstrate Superior Energy Performance
      The building must achieve an ENERGY STAR score of 75 or higher and meet all criteria associated with ENERGY STAR certification.

    • Use Renewable Energy
      At least 30 percent of a building’s total energy used onsite must derive from renewable sources. Market-based measures like power purchase agreements (PPAs) and renewable energy certificates (RECs) can qualify as long as they meet certain quality control criteria (e.g., Green-e certified).

    • Meet a Direct Emissions Target
      The building must meet a GHG intensity target for its property type, which adjusts to account for days of extra heating required in colder climates.

CRE Recognition

Tony Malkin (Chairman, President and Chief Executive Officer, Empire State Realty Trust, Inc.), chair of The Roundtable’s Sustainability Policy Advisory (SPAC) Committee.
  • “NextGen highlights RER’s constructive engagement with decision makers who translate policy to action,” said Tony Malkin, above, (Chairman, President and Chief Executive Officer, Empire State Realty Trust, Inc.), chair of The Roundtable’s Sustainability Policy Advisory (SPAC) Committee.
  • He added, “The NextGen voluntary standard provides specific metrics-based criteria to recognize the very best performers who increase efficiency, reduce emissions, and help expand the nation’s supply of renewable energy. This new framework allows our members to urge cities and states to look to these researched and logical federal standards rather than create their own unduly complicated and punitive mandates.”
  • “Our work with EPA is not done,” Malkin continued. “Our next project with our EPA partners is to recognize inefficient buildings which will never reach ENERGY STAR levels and still take steps to reduce materially energy use in common areas and tenant spaces.”      

Planning Considerations

  • Companies can apply online to EPA for the NextGen label starting in Sept. 2024.
  • EPA’s response to public comments noted the agency will explore “separate recognition” for inefficient buildings that significantly improve energy performance.
  • In February, RER and Nareit urged that EPA’s NextGen label should be considered a critical intermediate step for an asset to show it is “on a path” to meet the Energy Department’s yet-to-be-released, voluntary Zero Emissions Building (ZEB) definition.
  • Building owners may report to investors about assets certified with the NextGen label. Information on green-labeled buildings could be within the scope of disclosure requirements released earlier this month by the U.S. Securities and Exchange Commission (SEC) and passed last year in California. (See RER’s facts sheets on the SEC and California requirements).
  • Court challenges are currently underway against both the SEC and California corporate climate reporting rules. The SEC’s rule has been stayed at least temporarily by a federal appeals court. (POLITICOPro, March 20 and Roundtable Weekly, March 15).

EPA staff overseeing the NextGen program will participate on SPAC’s next Zoom meeting on April 11 to field questions on the new building label.

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Roundtable Policy Advisory Committees Drill Into Sustainability and Security Issues at 2024 SOI Meeting

Posted on by Abigail Grenadier
The Roundtable’s Sustainability Policy Advisory Committee (SPAC) meeting at the 2024 State of the Industry meeting

National policies and agency actions related to climate, environmental, and energy issues were among the many topics on The Roundtable’s Sustainability Policy Advisory Committee (SPAC) agenda at the SOI meeting. Additionally, The Roundtable’s Homeland Security Task Force (HSTF) and Risk Management Working Group (RMWG) met to discuss evolving security threats impacting CRE.

Special Roundtable SPAC workshop on EPA’s ENERGY STAR Portfolio Manager benchmarking tool.
  • SPAC members also attended a special session with EPA staff where Roundtable members provided detailed industry feedback about the first major enhancements in a decade that are under consideration for EPA’s ENERGY STAR Portfolio Manager benchmarking tool.
The Roundtable’s Homeland Security Task Force (HSTF) and Risk Management Working Group (RMWG)
  • The Roundtable’s HSTF and RMWG joint meeting on Jan. 24 addressed China’s espionage efforts impacting American corporations; the emerging use of Artificial Intelligence as a new risk vector; and the current dynamic in pricing and coverage in commercial insurance markets. (HSTF & RMWG joint agenda | Roundtable 2024 Homeland Security Priorities)

Next on The Roundtable’s 2024 meeting calendar is the Spring Meeting on April 15-16. This upcoming meeting is restricted to Roundtable-level members only. 

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Biden Administration Requests Comments on Draft Definition for “Zero Emissions Buildings”

Posted on by Abigail Grenadier

The Biden administration on Wednesday issued a draft definition for the term “Zero Emissions Buildings.” The voluntary guideline would apply to non-federal, existing buildings and new construction. The U.S. Department of Energy (DOE) requested comments by Feb. 5 from industry and other stakeholders about Part 1 of the draft “ZEB” language, which is focused on “zero operating emissions.” (DOE announcement | National Definition Draft Criteria | Comments Form)

Draft Criteria

  • An eventual, final ZEB definition would be the first federal government guideline providing voluntary criteria for buildings that aspire to zero emissions status. DOE’s proposed draft defines a zero emissions building through three (3) criteria:
    1. Highly energy efficient
    2. Free of on-site emissions from energy use, and
    3. Powered solely from clean energy
  • DOE will hold two public listening sessions on the draft definition. Registration is capped at the first 100 attendees:
    1. Thursday, January 11, 2024 @ 10 a.m. ET – Register
    2. Tuesday, January 30, 2024 @ 10:30 a.m. ET – Register

National ZEB Definition

  • RER plans to submit comments about the draft proposal. A federal definition for ZEB could bring much-needed consistency to help CRE owners and investors establish long-term emissions goals for buildings. (Roundtable Weekly, Sept. 29, 2023)
  • The Roundtable and a coalition of real estate organizations sent a Sept. 14 letter to US-EPA supporting development of standard methods and metrics for buildings and tenants to quantify their emissions.
  • Federal standards, definitions, and tools “are the North Star though which local governments can inform their law-making, and this helps bring some sense and order to the otherwise conflicting patchwork of climate laws and frameworks developed by states, cities, and NGOs,” said The Roundtable’s Sustainability Policy Advisory Committee (SPAC) Chair Tony Malkin (Chairman, President, and CEO, Empire State Realty Trust). (Roundtable Weekly, Sept. 15)
  • Roundtable Senior VP and Counsel Duane Desiderio was quoted on Sept. 28 in the Washington Post about how CRE companies may welcome the idea of a single federal standard. “A workable, usable federal definition of zero-emission buildings can bring some desperately needed uniformity and consistency to a chaotic regulatory landscape,” Desiderio said. (Roundtable Weekly, Sept. 15)

Executive branch officials from the White House, federal agencies, and leading non-governmental organizations will discuss the national ZEB definition on Jan. 24 during sessions on sustainability issues at The Roundtable’s all-member 2024 State of the Industry Meeting.

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Roundtable Comments on EPA’s Proposed Voluntary Label for Low-Carbon Buildings

Posted on by Trey Jackson

EPA NextGen logo

The Real Estate Roundtable submitted comments to the U.S. Environmental Protection Agency (EPA) yesterday on the agency’s proposed voluntary label for low-carbon buildings. (Roundtable letter, March 2)

Voluntary Building Label

  • EPA’s NextGen building label would expand upon the agency’s successful ENERGY STAR program for assets that attain high levels of energy efficiency.
  • The NextGen label would allow companies to highlight buildings that go beyond top efficiency performance—and further rely on renewable energy use and reduce their greenhouse gas (GHG) emissions. (EPA’s proposal and Roundtable Weekly, Jan. 27)
  • NextGen recognition has great potential for widespread market acceptance, The Roundtable stated in its comments.
  • EPA’s proposed program could create a uniform, voluntary federal guideline to simplify the confusing patchwork of city and state climate-related building mandates that exists across the country. (EPA Policy Brief, Jan. 19; Roundtable Weekly, Jan. 20)
  • EPA staff discussed its NextGen proposal with The Roundtable’s Sustainability Policy Advisory Committee (SPAC) at the “State of the Industry” meeting in January. (SPAC slide presentation)

Roundtable Recommendations

SPAC Chair Tony Malkin and Vice Chair Ben Myers

  • The Roundtable’s SPAC, chaired by Tony Malkin, above left, (Empire State Realty Trust Chairman President and CEO) and vice-chaired by Ben Myers, right, (BXP Senior Vice President, Sustainability), convened a working group to develop the comments submitted to EPA.
  • The Roundtable stated that NextGen recognition criteria “must be grounded in financial performance that offer building owners reasonable returns on their investments.”
  • The Roundtable’s comments suggested refinements to improve EPA’s proposed components, including:
      

    • Efficiency:
      Significant and demonstrated reductions in a building’s energy use should be eligible for the NextGen label (as an alternate, additional criterion to EPA’s proposal that only ENERGY STAR certified buildings could qualify).
    • Renewable Energy:
      The NextGen proposal would require that 30% of a building’s energy use must derive from renewables. The Roundtable recommends that the level should start at 20% and adjust over time to reflect the changing status of the electric grid as it decarbonizes through increased reliance on solar, wind, and other clean power sources.
    • GHG Reductions: 
      The Roundtable supports EPA’s proposal for a GHG “intensity target” that reflects a building’s unique weather conditions by a factor known as heating degree days (HDD). The Roundtable worked closely with EPA in the pre-pandemic era to consider HDD as a key variable in the underlying ENERGY STAR building score process. (Roundtable Weekly, July 19, 2019)
    • Renewable Energy Certificates (RECs):
      The Roundtable explained that voluntary NextGen recognition can provide much-needed guidance on corporate accounting for REC purchases and enhance credible claims on the environmental benefits from offsite clean power procurement.  

The Roundtable further advised EPA that it should conduct a pilot of the low-carbon label with private and public building owners before broad release to U.S. real estate markets. EPA intends to make the NextGen label available in 2024.

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