As the prospect of cap and trade legislation in the United States has slowly faded, energy efficiency standards for commercial buildings and industrial facilities have emerged as a viable and palatable alternative that could achieve significant greenhouse gas (GHG) emission reductions. One example in this growing trend is President Obama’s Better Building Initiative, which was announced in February 2011. This initiative will provide tax breaks, grants, and loans to private companies, with the goal of making commercial buildings 20 percent more energy efficient by 2020. Another example is the new global energy efficiency and energy management standard, ISO 50001, which was recently endorsed by the U.S. Department of Energy (DOE).

While these energy efficiency policies have predominately taken the form of voluntary and incentive-based programs, mandatory requirements have recently emerged; the most prominent example is California’s new energy efficiency assessment regulation. Given the growing political impetus towards adopting energy efficiency standards at the international, federal, and state levels, the next trend is likely to be the shift from voluntary to mandatory energy management standards in the commercial and industrial sectors.

Voluntary: ISO 50001 Energy Management Standard

On June 15, 2011, the International Organization for Standardization (ISO) announced the publication of the ISO 50001 Energy Management Standard. The ISO 50001 standard is a voluntary program that is intended to provide organizations with an international framework for integrating energy performance into their management practices. The ISO 50001 standard is intended to increase energy efficiency, reduce energy costs, reduce GHG emissions, and improve overall environmental performance.

Like the ISO 14001 Environmental Management Standard, ISO 50001 follows the “Plan-Do-Check-Act” framework. In other words, the ISO 50001 standard provides organizations with a framework for developing a policy for the more efficient use of energy, setting targets and objectives to meet this policy, using data to understand energy use and consumption, measuring the results, reviewing the effectiveness of the policy, and continually improving energy management.

The DOE’s Industrial Technologies and Building Technologies Programs are supporting implementation of the ISO 50001 standard for industrial and commercial facilities through the Superior Energy Performance Certification Program. Beginning in 2012, this voluntary energy management program will certify facilities that conform to the ISO 50001 standard and meet additional energy performance improvement criteria. Additional information about DOE’s support of the ISO 50001 standard is available online.

Mandatory: New Regulations

On July 1, 2011, the California Air Resources Board (ARB) adopted regulations establishing energy efficiency assessment requirements for California’s largest industrial facilities. The Energy Efficiency and Co-Benefits Assessment Regulation is part of a comprehensive set of policies and regulations that the ARB is implementing to meet the goals established by the Global Warming Solutions Act of 2006 (AB 32). AB 32 requires the state to reduce GHG emissions to 1990 levels by 2020. AB 32 also required the ARB to develop an overall plan to reduce GHG emissions, which was finalized in the ARB’s Climate Change Scoping Plan in December 2008. This energy efficiency assessment regulation is one GHG emission reduction measure set forth in the ARB’s Climate Change Scoping Plan.

The Energy Efficiency and Co-Benefits Assessment Regulation requires large industrial facilities in California to gather information on energy consumption, GHG emissions, and other pollutant emissions. It also requires facilities to identify potential opportunities for improving energy efficiency and reducing GHG and other pollutant emissions. The energy efficiency assessment regulation applies to stationary sources in California that emit 0.5 million metric tons of carbon dioxide equivalent (MMTCO2e) or more annually, as well as to petroleum refineries and cement plants that emit 0.25 MMTCO2e or more annually. Combined cycle electricity generating facilities built after 1995, petroleum refineries that do not produce transportation fuels, mobile combustion sources, and portable equipment are exempt from the regulation’s requirements.

The regulation requires affected industrial facilities to conduct a one-time energy assessment that includes a two-part analysis: (1) an energy consumption and emissions analysis, and (2) an energy efficiency improvement analysis. These analyses must then be compiled into a certified Assessment Report and submitted to the ARB by November 15, 2011. Once the information has been collected, the ARB intends to use the data to inform industry, government agencies, and the public about the most effective methods for reducing GHG and other pollutant emissions from large industrial facilities. The ARB will also develop a report with preliminary findings and recommendations, including potential voluntary, incentive-based, and regulatory actions that could be taken to maximize GHG and other pollutant emission reductions in the state.

About the Author

Aminah Famili is an attorney in the Annapolis, Maryland, U.S.A. office of Rich & Henderson, P.C. She was formerly an attorney and environmental, health, and safety regulatory consultant in the Washington, D.C., U.S.A. office of Enhesa, a global consulting firm specializing in monitoring and analysis of environmental, health, and safety regulations.

Photograph: Starz by Rodolofo Clix, Brazil.

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