Regulatory Roundup: Building Energy and Carbon Policies in 2026
A building performance standard, or BPS, is a law that requires existing buildings to hit a measured energy or emissions target by a fixed date, with financial penalties for missing it. More than a dozen US jurisdictions now have one, and 2026 is the year several move from reporting to enforcement.
That shift is the story of this year. For most of the last decade these policies asked owners to disclose data. The programs reaching maturity in 2026 ask them to hit a number, and they attach a dollar figure to falling short. At the same time, the corporate climate reporting picture moved in the opposite direction, with the European Union sharply narrowing the CSRD and California pausing enforcement of one of its two disclosure laws.
Noda is an agentic AI platform for commercial building operations that works as a virtual building engineer, continuously tuning HVAC and energy systems to grow net operating income and protect asset value. What follows is where each major policy stands as of August 2026, what is actually enforceable, and what owners should be doing about it.
What is the difference between a performance standard and a disclosure rule?
A performance standard sets a target your building must meet. A disclosure rule sets information you must publish. Confusing the two is the most common planning error, because only one of them can be satisfied by better reporting.
| Policy type | What it requires | What failure costs | Examples |
|---|---|---|---|
| Building performance standard | Meet a measured energy or emissions target by a date | Per-ton or per-square-foot penalties, often annual | LL97, DC BEPS, BERDO, Energize Denver |
| Benchmarking and disclosure | Report annual energy and water use, often verified | Per-day or per-square-foot filing fines | Seattle, Maryland (through 2029), most state programs |
| Corporate climate reporting | Publish emissions and climate risk at the entity level | Regulatory penalties, assurance costs, investor scrutiny | CSRD, California SB 253 and SB 261 |
An owner can be fully compliant with a disclosure rule and still face a six-figure penalty under a performance standard in the same year. The two run on separate tracks with separate deadlines.
Which US building performance standards have live deadlines in 2026?
Seven jurisdictions have obligations landing in 2026 or 2027. The table below is the planning view, and the detail follows underneath.
| Jurisdiction | Covered buildings | Next milestone | Penalty exposure |
|---|---|---|---|
| NYC (LL97) | Over 25,000 sq ft | CY2025 report filed 2026 | $268 per ton over cap, annually |
| Washington DC (BEPS) | 50,000 sq ft and up | Cycle 1 ends Dec 31, 2026 | Up to $10 per sq ft, capped at $7.5M |
| Boston (BERDO) | 20,000 sq ft or 15+ units | Report due Aug 15, 2026 | $234 per ton, plus daily fines |
| Washington State (CBPS) | Tier 1 over 220,000 sq ft | June 1, 2026 | Administrative penalties |
| Denver (Energize Denver) | 25,000 sq ft and up | Verification June 1, 2026 | Interim targets 2028, final 2032 |
| Maryland (BEPS) | 35,000 sq ft and up | Verification in 2026 | $230 per ton from 2030 |
| Seattle (BEPS) | 20,000 sq ft and up | First report Oct 1, 2027 | Targets begin 2031 |
New York City: Local Law 97
LL97 caps carbon emissions for buildings over 25,000 square feet, with limits that tighten in 2030 and again in 2050. Roughly 50,000 buildings are covered.
The penalty for exceeding a cap is $268 per metric ton of excess emissions, assessed annually. Two separate penalties often catch owners off guard: failing to file costs $0.50 per gross square foot per month, and a knowingly false submission carries civil penalties up to $500,000. Calendar year 2025 reports were due May 1, 2026, with a grace period through June 30 and a paid extension available into late August.
The NYC Accelerator remains the best route to incentives and financing for covered owners.
Washington, DC: BEPS
DC is the jurisdiction with the hardest deadline this year. Cycle 1 ends December 31, 2026, and compliance is judged on calendar year 2026 data, with end-of-cycle reporting due to DOEE by May 1, 2027.
Coverage in Cycle 1 is privately owned buildings of 50,000 square feet and larger, plus District-owned buildings of 10,000 square feet and larger. The threshold steps down to 25,000 square feet in Cycle 2 and 10,000 square feet in Cycle 3. Buildings on the performance pathway must show a greater than 20 percent reduction in site EUI against the 2018 to 2019 average.
Penalties run up to $10 per square foot of gross floor area, capped at $7.5 million per property, and scale proportionally with progress toward the target. Proposed delays were removed from the FY26 Budget Support Act in July 2025, so the original timeline holds. Owners with DC assets should read our detailed guide to what can still change before December 31.
Boston: BERDO
BERDO now does both jobs. Buildings of 20,000 square feet or 15 or more units report annually, and since 2025 non-residential buildings of 35,000 square feet and residential buildings of 35 or more units must also stay within declining emissions caps.
The BERDO Review Board extended the 2026 reporting deadline from May 15 to August 15, 2026, covering calendar year 2025 energy use. Exceeding an emissions standard triggers an alternative compliance payment set at $234 per metric ton of CO2e above the limit, a rate the Review Board revisits every five years. Daily fines run separately, at $1,000 per day for large buildings out of compliance with the emissions standard and $300 per day for smaller covered buildings, with lower figures for reporting violations.
Owners facing technical or financial hardship can apply for a Short-Term Hardship Compliance Plan by September 1, 2026, and Individual Compliance Schedules remain available on application.
Washington State: Clean Buildings Performance Standard
The state standard phases in by size. Tier 1 buildings over 220,000 square feet had a June 1, 2026 deadline, buildings between 90,001 and 220,000 square feet are due June 1, 2027, and buildings between 50,001 and 90,000 square feet are due June 1, 2028. Tier 2 buildings report benchmarking, an energy management plan, and an operations and maintenance program by July 1, 2027. The Department of Commerce administers the program.
Denver: Energize Denver
Energize Denver covers buildings of 25,000 square feet and larger. Following litigation and rule revisions, interim targets now land in 2028 and final targets in 2032, with compliance holds and extensions available on application. Third-party verification was required by June 1, 2026.
Maryland: BEPS
Maryland's program covers buildings over 35,000 square feet and splits into two phases. Benchmarking began in 2025, with the first reports due September 30, 2025 and third-party verification of that data due in 2026. Direct greenhouse gas emissions standards begin in 2030, at which point excess emissions carry a fee of $230 per metric ton, rising $4 per ton each year. Legislative amendments have continued to adjust the compliance timeline, so owners should confirm current dates with the state.
Seattle: BEPS
Seattle's standard passed in 2023 and covers nonresidential and multifamily buildings over 20,000 square feet. It is still in rulemaking. Benchmarking verification and a greenhouse gas report are due by October 1, 2027 for buildings above 90,000 square feet, with smaller buildings phasing in through 2030. The first deadline to actually meet a greenhouse gas intensity target is October 1, 2031 for the largest buildings, running to 2035 for the smallest. The city's compliance schedule lists exact dates by size band.
What happened to the CSRD after the EU Omnibus?
The Corporate Sustainability Reporting Directive still exists, but it applies to far fewer companies than it did when it was written. The Omnibus simplification package became law as Directive (EU) 2026/470, in force from 18 March 2026.
Three changes matter most:
Scope narrowed sharply: mandatory reporting now applies to EU companies with more than 1,000 employees and more than €450 million in net turnover. The previous test caught companies at 250 employees and €40 million. Estimates put the reduction in covered entities at 80 to 90 percent.
Listed SMEs are out. The separate, lighter regime for smaller listed companies has been dropped.
Wave 2 slipped two years. Companies that were due to report on FY2025 now report on FY2027, filing in 2028.
Member states must transpose the amendments by 19 March 2027, so national implementation will vary in the interim. KPMG maintains a running summary of what was agreed, and the European Commission's reporting page carries the official text.
For real estate specifically, the practical effect is that many portfolio owners who spent 2024 and 2025 building CSRD readiness programs are now out of mandatory scope. The underlying data work retains value, because Scope 1, 2, and 3 accounting and embodied carbon tracking still feed GRESB, investor diligence, and the performance standards above. The compliance deadline driving it has moved.
Where do California's climate disclosure laws stand?
Both laws are on the books, both were amended by SB 219, and neither is being enforced as originally written. CARB adopted initial implementing regulations in March 2026.
SB 253, the Climate Corporate Data Accountability Act, requires companies over $1 billion in revenue doing business in California to report Scope 1 and 2 emissions, with Scope 3 following. CARB deferred the first reporting deadline into late 2026 and is exercising enforcement discretion for the first cycle. No third-party audit is required on the first report, good-faith effort is being credited, and companies that genuinely were not tracking emissions may file a short statement to that effect.
SB 261, the Climate-Related Financial Risk Act, requires companies over $500 million in revenue to publish a biennial climate risk report. CARB has stated it will not enforce the January 1, 2026 deadline while a Ninth Circuit injunction is on appeal.
Owners with California exposure should treat both as live obligations with uncertain timing. Our note on climate disclosure and energy data compliance covers the data infrastructure question underneath both.
What is changing for UK commercial property under MEES?
The UK government issued an interim response in June 2026 that pushed the commercial MEES timeline out and dropped the interim step.
Under the previous proposal, commercial property was to reach EPC C by 2027 and EPC B by 2030. The C milestone has been removed. From 2031, commercial buildings above 1,000 square metres must reach EPC B, subject to exemptions, while commercial property below that threshold must hold an EPC E. Enforcement mechanisms and penalty levels remain open, and further government response is expected.
The commercial consequence of falling below the minimum is unchanged and severe: granting or renewing a lease on a sub-standard property is unlawful until improvements are made.
How should owners plan across jurisdictions?
Start from the deadline that is closest and the exposure that is largest, then work backward. Four practices apply regardless of jurisdiction.
Confirm what is on file, per asset. Pathway elections, baseline years, and covered-building determinations are frequently wrong in portfolio records. Verify against the regulator's portal.
Rank by dollar exposure, not by square footage. A large building slightly over its cap can carry more financial risk than a small building far over it. Penalty structures differ enough between jurisdictions that intuition is unreliable.
Separate the operational gap from the capital gap. Most portfolios can close part of the distance through schedules, resets, economizer repair, and sequencing, with no capital approval and results visible in metered data within days. Our roadmap for decarbonizing legacy properties covers how to sequence the rest.
Build the measurement trail while the work happens. Baselines assembled after the fact are harder to defend under regulatory review, and the same documentation supports the internal capital case for the next cycle.
Where does continuous optimization fit?
Noda is an agentic AI platform for commercial building operations that works as a virtual building engineer, continuously tuning HVAC and energy systems to grow net operating income and protect asset value.
For multi-jurisdiction portfolios the relevant capability is coverage. The same faults drive the gap in every one of the programs above, and finding them building by building is where compliance programs stall. Connection runs through the Noda LaunchPad, a secure edge device that provides read and write access without BMS reprogramming, and savings are automatically measured against counterfactual baselines normalized for weather and occupancy.
For background on the underlying approach, see What Is Agentic AI for Building Operations?.
Frequently asked questions
Which building performance standard has the nearest deadline? Washington, DC. BEPS Cycle 1 closes December 31, 2026, and compliance is judged on calendar year 2026 metered data, so the performance year is still open as of August 2026.
Is the CSRD still in force? Yes, but with much narrower scope. Directive (EU) 2026/470 took effect 18 March 2026 and raised the threshold to more than 1,000 employees and more than €450 million net turnover, removing an estimated 80 to 90 percent of previously covered companies. Wave 2 reporting moved to FY2027, filed in 2028.
Do I have to comply with California SB 253 in 2026? The obligation exists, and CARB adopted implementing regulations in March 2026, but the agency deferred the first Scope 1 and 2 deadline into late 2026 and is exercising enforcement discretion for the first cycle. SB 261's January 2026 deadline is unenforced pending a Ninth Circuit appeal.
What is the largest single penalty exposure in US building policy? Washington DC caps alternative compliance payments at $7.5 million per property, calculated at up to $10 per square foot. NYC LL97 has no cap, so a large building far above its limit can face a larger annual figure at $268 per ton.
Can operational changes alone close a compliance gap? Often a meaningful portion of it. Schedules, resets, economizer faults, and simultaneous heating and cooling account for a large share of the gap in buildings that have already done capital work, and corrections appear in metered data within days rather than the months a retrofit requires.
Which jurisdictions should I expect to add standards next? The direction of travel is toward more coverage at lower square-footage thresholds. DC, Seattle, and Maryland all have scheduled step-downs already written into their programs, and several states have benchmarking laws positioned to become performance standards.