Colorado Secures $20M to Accelerate Carbon Cuts in Commercial Buildings
Colorado recently received a major boost to its efforts to cut greenhouse gas emissions from large commercial buildings. The U.S. Department of Energy (DOE) has awarded the state a $20 million grant to support its building performance standards, which limit carbon pollution from buildings larger than 50,000 square feet. These standards, adopted in 2022, are a key part of Colorado’s strategy to meet its climate goals.
The funding will specifically target buildings in marginalized communities, where property owners may struggle to afford carbon-cutting technologies such as heat pumps and insulation. Dominique Gómez, deputy director of the Colorado Energy Office, expressed enthusiasm for the grant, highlighting its importance for ensuring the success of the state’s decarbonization policies.
This grant is part of a larger $1 billion initiative under the Inflation Reduction Act, designed to reduce building emissions nationwide. The vast majority of this funding is focused on supporting cities and states in implementing building performance standards. These policies are rapidly gaining traction across the U.S., with pioneering examples such as New York City’s Local Law 97 and Seattle’s Building Emissions Performance Standards.
Building owners have several options to meet the standards, including upgrading to LED lighting, improving insulation, or electrifying heating systems. Those who fail to comply face steep fines, designed to be more expensive than the cost of retrofitting, according to Paulina Torres, research manager at global real estate firm JLL.
Performance standards are seen as essential for driving emissions reductions in existing buildings, which contribute significantly to climate pollution. When accounting for electricity consumption, buildings are the largest source of carbon emissions in the U.S., even surpassing transportation and agriculture.
The Biden administration has made building performance standards a cornerstone of its climate strategy. In 2022, it formed the National Building Performance Standards Coalition to encourage their adoption, and the White House introduced a federal building standard aimed at cutting emissions in 30 percent of government buildings by 2030.
Colorado, along with states like Oregon and Washington, has already implemented building performance standards, and 34 more jurisdictions are expected to do so by 2026. If all 47 members of the national coalition adopt these policies, it is estimated they could drive $132 billion in investments and eliminate 676 million metric tons of CO2 by 2040, the equivalent of the annual emissions of 88 million homes【source: Institute for Market Transformation】.
To further support building decarbonization, Colorado also received $30 million from the Environmental Protection Agency’s Climate Pollution Reduction Grant. This funding will be awarded through competitive grants to help building owners meet or exceed the state’s emissions reductions requirements.
Gómez expects the state to begin deploying both the DOE and EPA funds early next year, ensuring that building owners, particularly those in disadvantaged communities, receive the support they need to meet decarbonization goals.
“The change that needs to happen in the building sector is large, so we want to make it as easy as possible,” Gómez said. “We know that disproportionately impacted communities need additional support.”
