Fact Sheet

Building Decarbonization

August 1, 2025

Overview

Decarbonized buildings incorporate energy efficiency upgrades, electrification, and design elements which can drastically lower U.S. energy demand while providing benefits such as cost savings, carbon pollution reduction, and improved indoor air quality. Commercial and residential buildings account for ~13% of U.S. emissions, largely due to burning gas, diesel, or heating oil. States that are proactive about building codes and standards can reduce emissions while creating jobs in retrofitting and weatherization.

Key Points

Key Point 1

In 2021, buildings in the U.S. accounted for 28% of total U.S. energy consumption. (U.S. Energy Information Administration)

Key Point 2

LEED-certified buildings are cost effective, saving $1.2 billion in energy costs, $149.5 million in water costs, $715.3 million in maintenance costs, and $54.2 million in waste costs. (U.S. Green Building Council)

Key Point 3

Decarbonized buildings cost only marginally more to build, and result in significantly higher sales and rental rates, as well as tremendous savings on energy costs over time. (U.S. Green Building Council)

Key Point 4

Homes with fossil fuel-powered appliances have poorer indoor air quality causing increased likelihood of diseases like asthma. Homes with gas stoves can have nitrogen dioxide concentrations that are 50–400% higher than homes with electric stoves, and children in a home with a gas stove have a 24–42% increased risk of having asthma. (Rocky Mountain Institute)

Legislation

“**” indicates bipartisan support

Colorado H.B. 1269 (enacted 2025): Establishes a Building Decarbonization Enterprise and Building Decarbonization Fee, to reduce building emissions and provide financial assistance to building owners for implementing decarbonization measures.
**Colorado S.B. 182 (enacted 2025): Establishes new standards and tax incentives to encourage the use of building materials and construction practices that significantly reduce embodied carbon emission.
**New Hampshire S.B.4 (enacted 2025): Establishes a commercial property assessed clean energy and resiliency (C-PACER) program designed to facilitate financing for improvements in energy efficiency, clean energy, water conservation, and property resiliency for commercial properties.
New York A.3006 (enacted 2023): Included a statewide ban on fossil fuels in new buildings (originally introduced as the standalone policy, the “All-Electric Buildings Act”). Learn more here.
Vermont S.5 (enacted 2023): creates a performance standard for the heating fuel sector that will reduce climate pollution over time and increase the equitable deployment of cleaner heat options. Learn more here.
Washington H.B. 1543 (enacted 2025): Amends Washington’s Building Performance Standard including the establishment of energy use intensity targets and alternative metrics for compliance, conditional compliance methods, and an early adoption incentive program for building owners.

Resources

NCEL Resources

Policy Options