States are increasingly confronting the reality that burning fossil fuels for heat creates cost burdens for their residents, particularly for low-income households and struggling small businesses, while harming health and the environment. Importing those fuels imposes a drain on the broader economy. 

Maryland is among the states that are acting on these linked challenges. Its Climate Solutions Now Act of 2022 sets ambitious goals to reduce climate pollution, while the state has also committed to improving energy equity. A clean heat standard can be a powerful tool toward meeting both those goals. 

A clean heat standard is a performance standard that would apply to providers of fossil-fuel heating energy in Maryland, notably gas utilities and importers of heating oil and propane. The standard would require these obligated parties to serve Maryland’s residential and commercial customers with gradually increasing percentages of clean heat services, while giving homeowners and businesses the ability to choose when and how they will upgrade to more efficient buildings and lower-emitting heat. Importantly, energy suppliers would have a broad range of options for meeting their obligation. Other parties, including HVAC contractors, housing authorities and weatherization providers, could also earn clean heat credits for delivering low-emissions heating services. 

The standard’s main advantage and key attribute is that it focuses on the delivery of concrete, clean solutions to drive down consumption of fossil fuels on a schedule that aligns with the state’s greenhouse gas reduction and social equity goals. Within that framework, there are many ways to design and implement a clean heat standard. This paper takes up the major architectural elements of any clean heat standard, along with some of the options open to decision-makers. It also surveys the long history of experience with other performance standards for energy and highlights notable features of recently enacted clean heat legislation in Colorado and Vermont.

Flexibility within environmental and social justice guardrails is another hallmark of a clean heat standard. This paper sets out options for the important guardrails that Maryland may seek to apply to the heating transition. It also addresses the synergies between a clean heat standard and a suite of complementary policies, including equipment standards, efficiency programs and building codes, which can all work in concert to deliver cleaner, more affordable heat at lower cost.

As a companion to this paper, Energy Futures Group studied recent trends in greenhouse gas emissions from burning fossil fuels in Maryland’s residential and commercial buildings. EFG also identified potential combinations of clean heat measures that the state would need in order to meet its climate goals. The EFG study, Maryland Building Decarbonization Pathways, is an attachment to the RAP paper.