A new Maryland law requires the state to slash greenhouse gas emissions 60% by 2031 from 2006 levels and to hit an economywide net-zero target in 2045 after the state's Republican governor declined to veto the bill.

The state's Climate Solutions Now Act of 2022 puts Maryland on par with California in having a 2045 statewide net-zero goal, which no other states aspire to at this point. Maryland also becomes the only state to have the ambitious target enshrined in law when the act takes effect June 1.

League of Conservation Voters spokesman Nick Abraham said his group's analysis showed that Maryland now has the country's strongest carbon-reduction goal. California's 2030 target is a 40% reduction from 1990 levels and is based on an executive order, not legislation.

Gov. Larry Hogan on April 8 also declined to veto a bill requiring the State Retirement and Pension System to consider "potential systemic risks" associated with climate change when managing assets and to identify new investment opportunities in fossil-fuel-free energy technologies. The system manages benefits for 400,000 active and former state employees.

Democrats hold supermajorities in both houses of the state legislature and likely would have overridden any veto on the bills. But unlike his GOP peers in other states, Maryland's governor has been outspoken and engaged on climate issues.

Hogan has been an advocate for the Regional Greenhouse Gas Initiative's cap-and-trade market and a proponent of offshore wind energy. In addition, he remains the only Republican governor to join the U.S. Climate Alliance, a group of states committed to "real, impactful, on-the-ground action" to tackle climate change.

Still, the two-term governor did not hide his displeasure with the 2022 climate and pension system legislation.

"These two bills are an example of poor legislative practice and misguided resources resulting from partisan policies," Hogan wrote in an April 8 letter to state House and Senate leaders. "However, I will allow them to pass into law in hopes they will generate future deliberation and discussion on this critically important issue."

The governor's staff acknowledged that Hogan faced little or no pressure from industry or other organizations to fight the bills, which could explain his decision not to veto them, said Kim Coble, executive director of the Maryland League of Conservation Voters. Her group has been working for several years to strengthen the state's climate goals and was relieved to finally get a bill across the finish line.

"It's a very, very strong law that is going to move Maryland to be a leader across the country," Coble said in an interview. "There's so much in this bill that really was phenomenal, frankly."

Maryland settled for less ambitious measures than earlier versions of the bill after lawmakers voted largely along party lines to move the 2022 legislation forward, new analysis by Regulatory Research Associates concluded. RRA is a group within S&P Global Commodity Insights.

The law is also thin on program and funding details. Coble said the legislation will serve as a foundation for additional policies and legislation that will be needed over the next few years to add muscle and resources to the state's climate efforts.

Building electrification mandates postponed

After a similar bill failed in 2021, Maryland legislators this year pared back a provision requiring all new buildings in the state to be equipped with electric heating and appliances starting in 2023. Instead, the law directs the state Building Code Administration to develop recommendations on how to electrify buildings and instructs state regulators to assess how such changes will affect the grid.

"Unfortunately, local utilities lobbied intensely against it and gave a lot of misinformation, but this issue isn't over yet," state Sen. Paul Pinsky, the sponsor of the climate bill, said in an interview. "I think the study will show this can be done relatively cheaply by running the energy along existing electric lines in place of new pipes."

For now, only new commercial or multifamily apartment buildings larger than 35,000 square feet will be required to develop energy performance standards.

The climate law also requires all state-owned passenger cars to be electric by 2031, and that 50% of all other light-duty vehicles purchased by the state between 2031 and 2032 be zero-emission. Transportation accounts for about 36% of Maryland's carbon emissions while the electricity sector produces 31%, according to the state's most recent greenhouse gas inventory published in 2019.

Maryland will also be the first state to implement a new type of program to electrify school buses in collaboration with investor-owned utilities, Coble said. The power companies will pay for the buses in return for being able to use them during off-hours as energy storage.

The law will also establish a Climate Catalytic Capital Fund with initial three-year funding of $15 million for a green bond program that will speed up deployment of clean energy and energy storage capacity, home weatherization and other climate-related initiatives. Maryland's renewable portfolio standard, which requires utilities to sell half of their power from fossil-free sources by 2030, is not affected by the new law.

The state passed a law earlier this year extending tax credits to people who purchase a zero-emissions car for under $63,000.

Governors from both parties are increasingly focused on renewable energy and environmental topics, bringing hope to climate advocates frustrated that President Joe Biden's signature legislative efforts have stalled in Congress.

But the other 22 states that have set clean energy and carbon emission goals so far are all led by Democratic governors, according to a tally maintained by the Clean Energy States Alliance, a bipartisan coalition of state energy organizations. Most of those states have limited their targets to cover just the electricity sector or are aiming for net-zero by 2050.

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