New York is on pace to become the nation's first state to pass statewide restrictions on natural gas use in new buildings into law.

State lawmakers on May 1 released a budget bill that directs state code officials to prohibit fossil fuel equipment and building systems in new construction with seven floors or fewer by 2026. The requirement would expand to all new construction by 2029.

Gov. Kathy Hochul and her fellow Democrats in the state legislature said the policy was necessary to achieve greenhouse gas emissions reductions mandated by the 2019 Climate Leadership and Community Protection Act. The law mandates an economywide 85% reduction in emissions from 1990 levels by 2050.

The building sector was the state's largest emissions source in 2019, accounting for 32% of New York's GHG pollution, chiefly from combusting fossil fuels in residential and commercial buildings. New York is one of the nation's top gas consumers for use in residential and commercial buildings.

The measure passed as part of the state's annual budget process. During that process, the governor and legislators hammer out compromises and advance policy priorities through non-appropriations bills that pass along with the spending plan. The budget is overdue and legislators are expected to vote on the bill the week of May 1.

The budget bill resolved differences between progressive state lawmakers and environmentalists on one side and Hochul, a moderate Democrat, and the state's Climate Action Council on the other.

In January, state lawmakers reintroduced legislation requiring the code council to prohibit fossil fuel combustion in lower-rise new buildings by the end of 2023 and all construction by July 2027. The Climate Action Council earlier recommended — and Hochul backed — code-making deadlines at the end of 2025 for smaller buildings and 2028 for larger ones to dovetail with the next planned code updates.

The New York State Fire Prevention and Building Code Council will make the changes in upcoming updates to the Energy Conservation Construction Code of New York State.

Policymakers carve out exemptions

The compromise legislation will not apply to repairs, alterations and additions, nor does it apply to existing buildings. To address emissions from existing buildings, the Climate Action Council separately recommended a requirement to replace end-of-life equipment with heat pumps or other non-fossil fuel systems beginning in 2030. The legislature has not taken up that recommendation yet.

Like many gas bans, the bill included a range of exemptions. It will allow fossil fuel combustion for backup power and will not apply to manufacturing facilities, restaurants, laboratories, car washes, laundromats, hospitals and certain critical infrastructure. It will also permit fossil fuel equipment in mobile homes.

Those exemptions are not locked in for good. The bill authorizes the code council to periodically review exemptions to determine whether they still help achieve the state's clean energy and climate goals.

There are also limits on the exemptions. Fossil fuel equipment will only be allowed in the part of the building that houses an enterprise qualified for the exemption. In building spaces that secure an exemption, builders will have to include enough electric capacity to accommodate electric appliances and systems, except for manufacturing or industrial processes. They must also minimize emissions from that equipment, provided mitigation efforts do not impact health, safety, security or fire protection.

Lastly, the bill includes an exemption for construction projects where new or expanded electric service would be required and the grid cannot reasonably provide that service. The legislation deputizes the New York State Public Service Commission to determine whether the exception is reasonable.

New York advances statewide restrictions

While New York is set to become the first state to restrict gas use in new construction through state legislation, it is following an increasingly popular strategy of working through building codes.

Following Seattle's lead, Washington state adopted electric space and water heating requirements in new commercial and residential buildings in 2022 through a building code update after 2021 legislation to that effect failed to advance.

New York's policy will also apply to cooking appliances, clothes dryers and other equipment, but perhaps more importantly, it will have the force of law at a time when gas ban opponents are challenging electrification requirements.

In Washington, a diverse group of stakeholders sued over the state's electrification requirements, saying the 15-member Washington State Building Code Council exceeded its statutory authority when it adopted the proposals. Several bills backed chiefly by Republicans also challenged the council's authority on the matter.

In April, the US Court of Appeals for the 9th Circuit struck down a pioneering gas ban in Berkeley, Calif., saying federal efficiency standards preempted the policy. The decision put some similar local ordinances at legal risk within the 9th Circuit, where the policy has flourished. California's statewide energy efficiency standards heavily favor but do not strictly require electric space and water heating.

Other jurisdictions have also sought to enshrine gas bans in state law. In the current session, lawmakers in Connecticut and Rhode Island have floated legislation restricting fossil fuel use in new buildings. Lawmakers have taken other approaches to limiting gas use in new construction in Massachusetts and Vermont, where the legislature on April 28 sent a clean heat standard bill to the governor.

In 2022, Washington, DC, passed a law similar to New York's budget bill, setting a Dec. 31, 2026, deadline for code officials to require new commercial construction and renovations to achieve a net-zero energy standard. The law would provide a backstop if the board does not adopt electrification requirements proposed in the current update cycle.

New York policymakers have been laying the foundation for the statewide gas restrictions for more than two years. The Climate Action Council, which developed recommendations to achieve the 2019 Climate Leadership and Community Protection Act's goals, included the code changes in its final climate policy blueprint.

The statewide gas restrictions did not make it into last year's budget bill, but lawmakers revised state policy in July 2022 to promote clean energy and New York's climate agenda through its Energy Conservation Construction Code.

New York City adopted a gas ban in 2021.

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