On May 2, 2023, New York passed its 2024 fiscal year budget, including a prohibition on fossil fuel equipment and building systems in new construction. The policy will go into effect in 2026 for new buildings not more than seven stories tall, except for new commercial or industrial buildings greater than one hundred thousand square feet, and in 2029 for all new buildings.

The ban will not apply to buildings in existence prior to the effective dates. Even after the effective dates, existing buildings will remain unimpacted by the ban in the course of repairs, alterations, additions, relocations, and changes to the occupancy or use of such buildings. Further, existing buildings may install and continue to use and maintain fossil fuel equipment and building systems.  

The budget includes exemptions for buildings ranging from hospitals to car washes, keeping some buildings on gas beyond the 2029 deadline. Specifically, fossil fuel equipment may be installed and natural gas may be used:

• for generation of emergency back-up power and standby power systems;
• in manufactured (e., mobile) homes; and
• in a building or part of a building that is used as a manufacturing facility, commercial food establishment, laboratory, car wash, laundromat, hospital or other medical facility, and in other critical infrastructure such as emergency management facilities, wastewater treatment facilities, water treatment and pumping facilities, agricultural buildings, fuel cell systems, and crematoriums.

To curb the use of natural gas in buildings with exemptions, the budget includes additional guardrails. Some buildings will be required to, “to the fullest extent feasible,” limit the use of fossil fuel combusting systems. Further, qualifying exempted buildings will be required to be electrification ready in the areas where the building was permitted to install fossil fuel systems. The budget also expressly states that financial restraints are an insufficient basis on which to determine the feasibility of such requirements.

The budget states that standards for building construction shall be designed to achieve the state’s clean energy and climate agenda as set forth in New York’s Climate Leadership and Community Protection Act (“Climate Act”), signed into law in July of 2019. The Climate Act is part of New York’s ambitious climate strategy to reduce greenhouse gas emissions 40% by 2030 and 85% by 2050 from 1990 levels.

New York becomes the first state to enact this type of emissions prohibition, joining cities and municipalities across the nation with similar prohibitions including San Francisco, Los Angeles, Denver, and Montgomery County, Maryland. By contrast, legal challenges to these policies and the significant number of states passing laws prohibiting cities from banning natural gas means that the nationwide trajectory of natural gas bans and emissions regulations remains undetermined. We will continue to monitor these developments on the Corporate Environmental Lawyer.

[View source.]