Federal Building Energy Efficiency Rules and Requirements

The Clean Energy for New Federal Buildings and Major Renovations of Federal Buildings final rule (Clean Energy Rule) is a federal regulation required by section 433(a) of the Energy Independence and Security Act (EISA) of 2007, which directed federal agencies to reduce or eliminate their on-site (stationary Scope 1) fossil fuel-based energy consumption for certain federal new construction and major renovation projects.

The Clean Energy Rule applies to new construction or major renovation projects over a certain cost threshold (see Question 5 for additional information). The rule is implemented as a part of the existing Federal energy efficiency standards for Federal commercial and multi-family high-rise residential buildings in 10 C.F.R. part 433 and for Federal low-rise residential buildings in 10 C.F.R. part 435, with specific requirements located in subpart B of those regulations.

The Clean Energy Rule applies to new Federal buildings and major renovations to Federal buildings for which the construction cost exceeds a specified cost threshold (see Question 5 for additional information). The term "Federal building" means "any building to be constructed by, or for the use of, any Federal agency, including buildings built for the purpose of being leased by a Federal agency, and privatized military housing."

"Federal building" for purposes of the Clean Energy Rule is defined by 42 U.S.C. § 6832(6) (the definitions section for 42 U.S.C. Chapter 81, Subchapter II) as "any building to be constructed by, or for the use of, any Federal agency. Such term shall include buildings built for the purpose of being leased by a Federal agency, and privatized military housing."

Whether the standards from the rule apply to a Federal building depends on whether the cost of the new construction or major renovation crosses a threshold defined by one of of two categories. The rule applies new construction or major renovations to: 

1. "Public buildings" (as defined by 40 USC § 3301(a)(5)) for which the Administrator of General Services is required to transmit a prospectus to Congress under 40 U.S.C. § 3307; or 
    
2. Non-public buildings when the cost is $2,500,000 (2007$) or greater,  adjusted for inflation ($3,910,604.56).

Yes, based on the definition of "Federal building" from 42 U.S.C. § 6832(6), the Clean Energy Rule provides that a private building leased to the Federal government would be covered if the building was built for the purpose of being leased by a Federal agency. Including these leased properties in the definition of "Federal building" is consistent with DOE practice (see e.g., 10 C.F.R. §§ 433.2, 433.200(a)(i), 433.200(b), 433.200(c)).

The cost threshold triggering the Clean Energy Rule is defined by two qualifying categories: 

• The first qualifying category of buildings comprises public buildings, as defined in 40 U.S.C. §3301, for which transmittal of a prospectus to Congress is required under 40 U.S.C. § 3307. Under 40 U.S.C. § 3307(a)(1), for Fiscal Year (FY) 2024, a transmittal of a prospectus to Congress was required if a total expenditure in excess of $3,926,000 was required to construct, alter, or acquire the public building. GSA also provides a separate dollar threshold for alterations in leased public buildings for which a prospectus is required; in FY 2024, this threshold was $1,963,000.
   
• The second qualifying category of Federal buildings comprises Federal buildings that are not public buildings and for which the construction cost or major renovation cost is at least $2,500,000 (in 2007 dollars, adjusted for inflation). For FY 2025, $2.5 million in FY 2007 dollars, when adjusted for inflation, is $3,910,604.56.

The Clean Energy Rule's dollar threshold is evaluated by an ESPC's Implementation price, which equals Cost of Goods and Services (Base Construction) plus Project Implementation Delivery Charge (minus any Applied Incentives). This corresponds to Column (d) of Schedule 2a (Implementation Price by Energy Conservation Measure) of the eProject Builder workbook. Because the Clean Energy Rule applies to individual buildings and ESPC projects may include more than one building, agencies must only include the allocated project development price associated with an individual building when determining whether the new construction or major renovation exceeds the Clean Energy Rule's cost threshold.

Yes, the Clean Energy Rule applies to overseas Federal buildings when triggered by cost and not in conflict with other local regulations or project conditions. Because the statutory definition of covered "Federal buildings" includes public and non-public Federal buildings, overseas buildings are covered by the Clean Energy Rule as non-public Federal buildings. However, the Clean Energy Rule would only apply to projects that involve systems and components that directly utilize on-site fossil fuels in overseas Federal buildings that have at least $2,500,000 (adjusted for inflation) in construction or major renovation costs, and where the applicable agency determines that the agency’s local legal obligations do not directly conflict with the application of the Clean Energy Rule.

For the purposes of the Clean Energy Rule, "major renovations" applies both to whole building retrofits as well as multiple minor renovations that occur in phases on the same Federal building if the overall renovation meets the cost thresholds as explained above. The rule also requires Federal agencies to consider major renovations that are less than whole building renovations (i.e., component and system level renovations) that provide significant opportunities for substantial improvements in energy efficiency and reduce stationary Scope 1 fossil fuel usage.

System level renovation applies to a group of equipment pieces that function together to satisfy a building load. This could be the replacement of a hot water heating system which requires the replacement of the main plant along with the supporting equipment such as pumps and storage tanks along with terminal equipment such as heating coils.

42 U.S.C. § 6834(a)(3)(D)(i)(II) provides that Federal agencies other than GSA may petition DOE for an adjustment to the fossil fuel-generated energy consumption requirement with respect to a specific building if meeting the requirement is technically impracticable when considering the agency's functional needs for the building. Technical impracticability may include technology availability and cost considerations but may not be based solely on cost considerations.

"Technical impracticability" exists when achieving the fossil fuel-generated energy consumption targets would: 

1. Not be feasible from an engineering design or execution standpoint due to existing physical or site constraints that prohibit modification or addition of elements or spaces
    
2. Significantly obstruct building operations and the functional needs of a building, specifically for industrial process loads, critical national security functions, mission critical information systems as defined in NIST SP 800-60 Vol. 2 Rev. 1, and research operations; or 
    
3. Significantly degrade energy resiliency and energy security of building operations as defined in 10 U.S.C. § 101(f)(6) and (7) respectively.

A petitioning agency must describe the building and associated components and equipment; explain why compliance with the requirements is technically impracticable considering the functional needs of the building; demonstrate that all cost-effective energy efficiency and on-site renewable energy measures were included in the building design; provide the largest feasible reduction in fossil fuel-generated energy consumption that can be achieved; and discuss measures that were evaluated but rejected.

1. Exemptions and exceptions to the Clean Energy Rule cover building loads that do not have to be counted when determining compliance with the rule and no petition is required when a building’s design includes them. Exemptions and exceptions include fuel utilized for manufacturing and industrial process loads, fuel use for alternatively fueled vehicles, energy generation associated with the supply of emergency backup electricity; or on site energy generation associated with biomass or biofuels.
    
2. Under the Clean Energy Rule, “Technical impracticability” is the basis for which an agency may petition DOE for a downward adjustment of the fossil fuel-generated energy consumption targets. Technical impracticability exists when:
   1. Compliance is not feasible from an engineering design or execution standpoint due to existing physical or site constraints that prohibit modification or addition of elements or spaces
       
   2. Compliance would significantly obstruct building operations and the functional needs of a building, specifically for industrial process loads, critical national security functions, mission critical information systems as defined in NIST SP 800-60 Vol. 2 Rev. 1, and research operations; or 
       
   3. Compliance would significantly degrade energy resiliency and energy security of building operations as defined in 10 U.S.C. § 101(e)(6) and (7) respectively.

Yes. The first scenario describing technical impracticability would include climate as a potential reason for compliance to not be technically practicable from an engineering design or execution standpoint. This technical impracticability would exist when current non-fossil fuel-based solutions may not be able to deliver the amount of heat required in a building project over a certain amount of time. For example, a service hanger in a very cold climate may not be able to deliver enough heat to maintain appropriate work conditions given the large amount of air exchange when doors are opened and closed.

Agencies may bundle petitions for similar new buildings or whole renovations to buildings. The bundled petitions must clearly state any differences between the buildings and explain why the differences do not warrant the submission of separate evaluations. For component-level major renovations, DOE will allow bundling petitions that are renovations for the same component and building type.

• Agencies may file one petition for a project with multiple buildings if the buildings
  1. Are of the same building type and of similar size and location
  2. Are being designed and constructed to the same set of targets for fossil fuel-generated energy consumption reduction, and 
  3. Would require similar measures to reduce fossil fuel-generated energy consumption and similar adjustment to the numeric reduction requirement.
      
• The bundled petition must include the information in above that pertains to all buildings included in the petition and an additional description of the differences between each building. The agency is only required to show work for adjustment once.

Petitions that do not demonstrate technical impracticability will be denied. However, FEMP will notify an agency as early as possible if a petition is determined to not successfully demonstrate technical impracticability and will work with the agency directly for an appropriate resolution. The agency may revise their design and/or petition documentation to resubmit. It should be noted that there is no stated consequence listed in the legislated authority of the Clean Energy Rule for when a petition is unsuccessful – but that overall rule compliance will be tracked and reported and that completed petitions will be disclosed to the public (subject to classification allowances).

Scope 1 manufacturing and industrial process loads are exempt from the Clean Energy Rule's energy performance standards. For buildings with such process loads, the loads will need to be accounted for in the analysis of the building's fossil fuel consumption and green house gas emissions, but such loads will not be subject to the percentage reductions in fossil fuel-generated energy consumption.

Backup generators usage to provide emergency generation of electricity are not subject to the Clean Energy Rule. However, backup generator usage associated with non-emergency generation, such as those for peak shaving or load shifting, is subject to this rule. If Federal agencies use their backup generators for both purposes, they will be required to calculate the fraction of their backup generator emissions that is associated with emergency use and the fraction associated with non-emergency use.

"Design for construction" and "design for renovation" mean the stage when the energy efficiency and sustainability details (such as insulation levels, HVAC systems, water-using systems, etc.) are either explicitly determined or implicitly included in a project cost specification.

Given the above definitions for "design for construction" and "design for renovation," design in the context of a performance contract occurs at task order award, where the performance and energy efficiency details of the proposed renovation or energy conservation measure or water conservation measure (ECM/WCM) are explicitly established (to determine the guaranteed cost savings), and firm-fixed price costs are provided. For projects currently in development of a performance contract, if the task order will be awarded after the beginning of the compliance period (May 1, 2025), then the energy performance standards adopted by the Clean Energy Rule would apply. Agencies are encouraged to consider the requirements of the Clean Energy Rule for projects currently in development.   

No, compliance with the Clean Energy Rule is mandatory for all buildings for which design for construction or renovation began after May 1, 2025. Prior to that point the rule is still in effect but there is a voluntary compliance grace period that agencies may utilize. Note that design for construction is defined in 10CFR433/435 as "the stage when the energy efficiency and sustainability details (such as insulation levels, HVAC systems, water-using systems, etc.) are either explicitly determined or implicitly included in a project cost specification."

The Clean Energy Rule does not apply to on-site energy generation or Scope 1 emissions associated with gaseous fuels not derived from fossil fuels, such as biomass fuels, because such fuels are not fossil fuels.

Although the Clean Energy Rule only applies to systems and components that directly utilize on-site fossil fuels, agencies should ensure that projects that could have secondary impacts on fossil fuel-using equipment (e.g., lighting, appliance, window replacement projects) are considered. DOE encourages agencies to consider whole-building optimization for any type of major renovation project to ensure no adverse impacts to on-site fossil fuel use.

The procedures for calculating the maximum allowable Scope 1 fossil fuel consumption is detailed in the Code of Federal Regulations part 10 C.F.R. § 433.200(c) and 10 C.F.R. § 435.200(c). In summary:

• For qualifying buildings for which design for construction or renovation, as applicable, began during FY 2024 through 2029, the Scope 1 fossil fuel-generated energy consumption of the proposed building, must not exceed the value identified in Tables A-1a to A-2a (if targets based on emissions are used) or Tables A-1b to A-2b (if targets based on kBtu of fossil fuel usage are used) of appendix A of this rule for the associated building type, climate zone, and fiscal year in which design for construction began. Federal agencies may apply a shift adjustment multiplier to the values in Tables A-1a to A-2a or Tables A-1b to A-2b of the rule based on the following baseline hours of operation assumed in Tables A-1a to A-2a or Tables A-1b to A-2b.
   
• For projects that started design for construction or renovation during or after FY 2030, the maximum allowable Scope 1 fossil fuel-generated energy consumption is zero.

Additional resources are available throughout this website to facilitate compliance with the Clean Energy Rule. Additional background information and documents related to the rulemaking proceeding are available at Regulations.gov.

The authority for this rule is tied to EISA 2007 rather than EO 14057. However, this rule aligns with CEQ's Federal Building Performance Standard and E.O. 14057 requirements. All drive towards eliminating Scope 1 greenhouse gas emissions from Federal buildings. Although there are some conflicts in the requirements, only a small subset of Federal buildings are impacted. Projects that eliminate on-site fossil fuel use should support compliance across requirements.