Building owners in Boston must soon comply with government-imposed emissions limits or be subject to financial penalties. This article will break down what you need to know about these limits and your options for complying with them.

According to the Mayor’s office, more than 70% of Boston’s carbon emissions originate from buildings. To mitigate this, the Building Emissions Reduction and Disclosure Ordinance (BERDO) was adopted in 2021. Its goal is to make all buildings over 20,000 square feet and residential buildings with 15 units or more reach net-zero emissions by 2050. 

BERDO mimics New York City’s Local Law 97 in that there is a glide down period over the next 25 years. Emissions standards gradually get tighter and tighter in a phased approach to decarbonizing Boston.

BERDO requirements for building owners

Boston building owners are now accountable for more than the day-to-day operations of their facilities. There are three obligations that must be met under BERDO, and owners are responsible for the cost of compliance.

1. Reporting. Building owners must submit a report on their annual energy (electricity, natural gas, district steam, delivered fuels) and water use no later than May 15th each year. Here is a how-to guide for BERDO reporting.
2. Third-Party Verification. As of 2022, a building must have its energy and emissions data verified by a third party in its first year of reporting. There are subsequent “verification years” where third party validation is required for all buildings. Those start in 2026 and repeat in five-year increments. See this how-to guide for third-party verification.
3. Reducing Emissions. Emissions standards go into effect in 2025 for residential buildings with 35 units or more, and non-residential buildings greater than or equal to 35,000 square feet. Owners must reduce their building emissions from electricity and fossil fuel consumption. A building’s carbon emissions must fall below thresholds that get stricter every five years until reaching net-zero emissions by 2050. These limitations will apply to smaller facilities to include residential buildings with 15 or more units and non-residential buildings that are 20,000 square feet or more, starting in 2030.

What is my building emissions standard under BERDO?

Different building types have different energy requirements based on their use. For example, hospitals and healthcare facilities have an energy intensity nearly three times that of the average commercial building. BERDO’s emissions compliance standards account for these differences (see table below). A building’s greenhouse gas limitations are measured in kilograms of carbon dioxide equivalent per square foot (kgCO₂e / sq. ft.).

Ways to comply with BERDO emissions limitations

The City of Boston has laid out several compliance mechanisms which building owners can use to meet their emissions requirements. Each of these measures has a cost-benefit analysis that must be weighed against individual circumstances.

Compliance Method 1: Emissions Reduction

The first and likely most common mechanism will be direct emissions reductions. This can be achieved through building retrofits, making energy-efficient improvements to elements such as lighting and appliances, or shoring up the building envelope to upgrade insulation and tighten window seals. More impactful reductions, albeit more capital intensive, can be made by modernizing a building’s heating, air conditioning, and ventilation systems. HVAC accounts for more than 50% of a building’s emissions.

Compliance Method 2: Renewable Energy 

A second way for buildings to get compliant is through renewable energy purchases. Building owners who invest in solar- or wind-generated electricity can offset their emissions. There are also options for building owners to enroll in green energy programs such as the Community Choice Electricity (CCE) or Power Purchase Agreements (PPA) through the city. Though renewable energy can help to reduce emissions, this mechanism won’t be able to act as a stand-alone to achieve compliance.

Compliance Method 3: Alternative Compliance Payment (ACP)

The third and least viable option for BERDO compliance is Alternative Compliance Payments (ACPs). Building owners can pay $234 per metric ton CO₂e that exceeds their emissions limit. The City of Boston will collect these payments into their Equitable Emissions Investment Fund, which supports direct emissions reductions projects. For an iconic building like the John Hancock Tower, the ACP starts at nearly half a million dollars in 2025 and jumps to $1.3 million dollars under tighter emissions limits in 2030. Those numbers are according to Boston’s own BERDO emissions calculator.

BERDO fines for non-compliance

For buildings greater than 35,000 square feet that do not meet emission standards, the fine is $1,000 per day. Smaller buildings that are subject to BERDO compliance starting in 2030 will face a $300 per day penalty for non-compliance. 

Boston is a historic city and many of its buildings are centuries old. Becoming compliant with emissions standards may not be immediately or fiscally possible for some building owners. This is a financial calculation that owners must do to determine if paying a penalty or getting compliant via ACP is in their own best interest. That is, at least, until sufficient improvements can be made.

Reducing building emissions with Beacon AI

A more affordable, cash flow positive solution for building owners leverages artificial intelligence to reduce emissions and energy costs. Beacon AI targets the leading cause of building emissions—the HVAC system—and autonomously optimizes control settings to minimize energy consumption at all times. This lightweight software integrates with your existing building automation (BAS) or management system (BMS), is easy to deploy, does not require a large capital investment, and starts delivering payback in weeks.

With emissions standards going into effect in 2025, the time is now to get your building BERDO compliant. Schedule a 30-minute demo of Beacon to get an energy savings and emissions reduction estimate.

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