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New York’s 2023 state budget includes a ban on fossil fuel equipment and building systems in new construction. The ban creates major concerns about energy affordability and reliability.

How will the ban work?

The ban will be enforced through permitting. After the effective date, buildings constructed with fossil fuel-powered appliances or building systems will be in violation of building codes, preventing builders from getting necessary permits.

When does it take effect?

It depends on the size of the building.

For smaller buildings (seven stories or less), the ban takes effect January 2026. This does not include commercial or industrial buildings over 100,000 sq.ft.

For larger buildings (over seven stories, or commercial/industrial over 100,000 sq.ft.), the ban takes effect January 2029.

Are there any exemptions?

The ban will not apply to: emergency backup power systems, manufactured homes, manufacturing facilities, commercial food establishments, laboratories, car washes, laundromats, hospitals & medical facilities, critical infrastructure, agricultural buildings, fuel cell systems, or crematoriums.

Interestingly, the state also exempts buildings “that require an application for new or expanded electric service … when electric service cannot be reasonably provided by the grid.”

Still, exempted buildings are not completely off the hook. The regulations will require that exempt buildings limit use of fossil fuel equipment to the fullest extent possible.

Does this impact my existing buildings?

No. At this time, the ban only applies to new construction.

This is a significant victory. Governor Hochul initially proposed a phase-out of natural gas in existing buildings, which would prevent property owners from buying new gas-powered appliances, furnaces, or other building systems. However, the BNP successfully advocated against this harmful provision. The BNP thanks the members of our legislative delegation who were instrumental in moderating the bill language.

Is further regulation on existing buildings coming?

It is possible. After resounding public opposition to the existing buildings proposal, lawmakers realized the immense costs of retrofitting existing buildings with new, electric equipment. Without a clear mechanism to help residents bear those costs, lawmakers were uncomfortable imposing the ban on existing buildings. However, lawmakers remain very interested in reducing emissions from existing buildings. We expect that over the next year or two, lawmakers will attempt to design a financial aid program to help residents absorb the costs of electrifying their homes, then attempt to extend the gas ban to existing buildings. The BNP will continue to monitor this issue and advocate for affordable, reliable energy.

How can employers prepare?

Once it takes effect, this law will increase both construction and operating costs for any employer moving into a new building. Employers should budget and make commercial/industrial space decisions accordingly.

Those in the construction industry should research which non-fossil-fuel-based equipment and building systems are most cost-effective.

Developers and property owners should consider how to adjust financial models for new construction projects after this date, and also assess how the law impacts their valuation of existing buildings.

How did my representatives vote?

The WNY Delegation voted along party lines, with all Democrats voting for the gas ban, and all Republicans voting against it.*

The BNP strongly opposed this legislation and urged all legislators to vote against it.

*Based on votes on A.3006C/S.4006C on 5/2/23.