BERDO 2.0

BERDO 2.0 Building Energy Reporting & Disclosure Ordinance

In 2021, Boston passed BERDO 2.0, amending the existing Benchmarking and Energy Reporting Disclosure Ordinance (BERDO) to give the City authority to set carbon targets for large existing buildings. The annual greenhouse gas (GHG) emission limits will come into effect in 2025 for buildings 35,000 square feet (SF) and larger. GHG limits will also be applied to buildings 20,000-34,999 SF starting in 2030. These limits will decrease every five years thereafter, with all buildings achieving net zero emissions by 2050.

Separately, the annual benchmarking and submission of energy and water use data is still also required as it was in the previous BERDO but expanded to include buildings 20,000 SF and above starting in 2022.

THE GOAL OF THIS LEGISLATION IS TO REDUCE THE AGGREGATED TOTAL CARBON EMISSIONS FROM THE CITY’S LARGE AND MEDIUM–SIZED BUILDINGS (OVER 25,000 SF) BY 40% BY 2030 AND 80% BY 2050, COMPARED TO 2005 LEVELS

ANNUAL ENERGY AND WATER BENCHMARKING Annual energy and water benchmarking and submission using ENERGY STAR Portfolio Manager is still required with BERDO 2.0, but now applies to smaller buildings: • Non-residential buildings that are 20,000 SF or larger • Residential buildings that are 20,000 SF or larger, or have 15 or more units • Any parcel with multiple buildings that sum to at least 20,000 SF or 15 units Additionally, third party verification by a qualified energy professional is required for data submission every five years starting in 2022. A qualified energy professional includes but is not limited to a Professional Engineer (PE), licensed or registered architect, Certified Energy Auditor (CEA), and/or Certified Energy Manager (CEM).

NEW GHG EMISSION STANDARDS Allowable Emissions Starting in CY 2025 (and reported in 2026), buildings 35,000+ SF must now meet annual GHG emissions standards based on occupancy type(s). These limits are applied to buildings 20,000-34,999 SF starting in 2030. Emissions standards are reported in kilograms of carbon dioxide equivalent per square foot per year (kgCO2e/SF/yr).

Occupancy types are defined in alignment with ENERGY STAR Portfolio Manager.

EMISSIONS STANDARD (KGCO2E/SF/YR)​ Building Use​

2025–29​

2030–34​

Assembly

7.8

4.6

College/University

10.2

Education

2035–39​

2040–44​

2045–49​

2050

3.3

2.1

1.1

0

5.3

3.8

2.5

1.2

0

3.9

2.4

1.8

1.2

0.6

0

Food Sales & Service

17.4

10.9

8.0

5.4

2.7

0

Healthcare

15.4

10.0

7.4

4.9

2.4

0

Lodging

5.8

3.7

2.7

1.8

0.9

0

Industrial

23.9

15.3

10.9

6.7

3.2

0

Multi-family housing

4.1

2.4

1.8

1.1

0.6

0

Office

5.3

3.2

2.4

1.6

0.8

0

Retail

7.1

3.4

2.4

1.5

0.7

0

Services

7.5

4.5

3.3

2.2

1.1

0

Storage

5.4

2.8

1.8

1.0

0.4

0

Technology/Science​

19.2

11.1

7.8

5.1

2.5​

0

Note: Buildings with more than one primary use may comply with a blended CO2e emissions standard if each use:​ • Occupies at least ten percent (10%) of a building’s square footage, or • Accounts for more than ten percent (10%) of a building’s total annual energy use or CO2e Emissions

Measured Emissions Total energy consumed at the building is used to calculate annual GHG emissions and compared to the building emission limit. GHG emission factors per Million British thermal units (MMBTU) were provided for varying energy types/sources by the City of Boston​

EMISSIONS FACTORS Energy Type​

kgCO2e/MMBtu​

Natural Gas​

53.11​

Fuel Oil (no. 1)​

73.50​

Fuel Oil (no. 2)​

74.21​

Fuel Oil (no. 4)​

75.29​

Diesel Oil​

74.21​

District Steam​

66.40​

District Hot Water​

66.40​

District Chilled Water – Electric Driven Chiller​

52.70​

District Chilled Water – Absorption Chiller using Natural Gas​

73.89​

District Chilled Water – Engine-Driven Chiller Natural Gas​

49.31​

Grid electricity​

87.50​

Note: The emissions factors will be re-evaluated and revised over time by the City. Some utilities, such as “Grid Electricity”, may reduce emissions over time as more renewable energy comes online in the grid system.

CUSHMA N & WA KEF IEL D // 3

Steps Towards Compliance Cushman & Wakefield is collaborating with property teams and owners to stay at the forefront of this legislation.

Cushman & Wakefield is here to provide assistance by reviewing individual assets and portfolios to establish current emissions and performance, as well as by developing a focused roadmap for compliance with this legislation moving forward.

1

Reduce Energy Use & GHG Emissions

It is key to: • Calculate the current carbon emissions to see where a building stands today • Understand the gap between current greenhouse gas emissions and future limits, considering potential changes in the Boston-area electricity grid • Complete decarbonization studies to provide carbon roadmaps, including review of: - Low/no cost operational strategies for equipment and operations - Potential capital planning strategies and options for future years which reduce GHG emissions - Potential to generate non-emitting energy on-site

2

Switch the Renewable Off-site Procurement

Leverage strategies such as: • Opt into Boston municipal electricity aggregation program • Purchase unbundled RECs (Tracked by

3

Make Alternative Compliance Payments

Beyond reducing energy use and switching to renewable energy, buildings may mitigate CO2e emissions by making Alternative Compliance Payments. Pricing is based on the average cost per metric ton of CO2e to

the New England Power Pool Generation

decarbonize buildings. The initial cost of an

Information System)

Alternative Compliance Payment is $234 per

• Enter into Power Purchase Agreements (PPAs) for energy generated by

metric ton of CO2e, with the pricing reviewed and updated every five years.

non-emitting fuel sources

CUSHMA N & WA KEF IEL D // 5

BUILDINGS ARE FINED FOR NON-COMPLIANCE PER BELOW: Failure to file Annual Benchmarking Data:

Failure to comply with Emission Standards:

35,000+ SF (or Multi-family with 25+ units):

35,000+ SF (or Multi-family with 25+ units):

$300 per day

$1,000 per day

20,000-35,0000 SF (or Multi-family with 15+ units):

20,000-35,0000 SF (or Multi-family with 15+ units):

$150 per day

$300 per day

EQUITABLE EMISSIONS INVESTMENT FUND Alternative Compliance Payments and Penalties will be deposited into the E ​ quitable Emissions Investment Fund.

Fund dollars will be allocated to environmental justice projects, such as: • Low-income affordable housing and housing where tenants are at risk of displacement a ​ nd in need of rent stabilization​ • Local air quality improvement • Indoor environmental quality and health for building tenants • Economic inclusion, training, and technical assistance for Minority, Women, and Disadvantaged Business Enterprises (MWDBE) and cooperative contractors • Workforce development training programs for residents who have been disproportionately impacted by the effects of climate change • Projects with community ownership of housing and renewable energy infrastructure reduced energy burdens • Any further environmental initiatives​

KEY CONTACTS

Bruce Clifford

Ryan Quick

Senior Managing Director Asset Services – Boston

Managing Director Asset Services – Boston

+1 617 279 4524 bruce.clifford@cushwake.com

+1 617 204 5964 ryan.quick@cushwake.com

Max Bremner

Rachel Schiftan

Energy Project Manager Energy & Sustainability Services

Managing Director Energy & Sustainability Services

+1 410 347 1147 max.bremner@cushwake.com

+1 202 266 1312 rachel.schiftan@cushwake.com

CUSHMA N & WA KEF IEL D // 7

©2022 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable.

The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.