• Hydrofluorocarbon (HFC) and perfluorocarbon (PFC) emissions from their use primarily in cooling and refrigeration equipment (5.2 MMTCO2e in 2020)

• Methane (CH4) emissions from leaks in natural gas infrastructure (3.1 MMTCO2e in 2020)

• CO2 emissions from fossil fuel use in industrial facilities (2.7 MMTCO2e in 2020)

• CO2 emissions from the calcination of limestone in the manufacturing of cement (1.8 MMTCO2e in 2020)

• CO2 emissions from generators used to produce liquified natural gas (1 MMTCO2e in 2020)

Within the IPPU sector, approximately 96% of emissions come from two sources: cement manufacturing and the use of HFCs for cooling and refrigeration equipment. A small amount of emissions comes from limestone use, soda ash use, non-fertilizer usage of urea, and sulfur hexafluoride (SF6) use for electric power transmission and distribution systems.

Figure 6: Maryland’s industrial processes and product use GHG emissions trends, historical and projected, from 2006 to 2050 based on current and new policies 

Within the industrial fuel use sector, emissions were evenly split between coal, oil, and natural gas in 2020. Practically all of the coal used in the industrial sector is used by two cement manufacturing plants while almost all of the oil and gas is consumed by non-cement industries. Switching industry to cleaner fuels or electricity is an important part of decarbonizing this sector. The largest of the two cement manufacturing plants in Maryland is currently working to replace coal with natural gas while the other plant is considering a replacement of coal with refuse-derived fuel. These two fuel-switching projects are included in the emissions modeling for this sector.

Within the fossil fuel industry, most of the direct emissions are from the natural gas industry, which includes the in-state emissions from the production, transmission, and distribution of natural gas. A small portion of emissions are from coal mining, which includes underground and surface mines and abandoned mines.

Hydrofluorocarbon Regulations (current)

In November 2020, MDE adopted regulations to prohibit certain hydrofluorocarbons (HFCs) and HFC blends that have a high global warming potential (GWP) and pose a higher overall risk to human health and the environment. The regulations adopted specific prohibitions for HFCs in air conditioning and refrigeration equipment, aerosol propellants, and foam end-uses. The phase-out of HFCs encourages the use of available alternatives with lower GHG emissions.

MDE’s HFC regulations apply to any person who sells, offers for sales, installs, or introduces into commerce in Maryland any substance in end-uses identified in the regulations. The requirements focus on end-use prohibitions for the following sectors/categories: Aerosol Propellants, Air Conditioning, Refrigeration, and Foams. The effective prohibition phase-in dates range from January 1, 2021, to January 1, 2024. The regulations include a sell-through provision for products and equipment manufactured before the prohibition date. The regulation also allows continued use of existing products and equipment that contain banned substances acquired before the prohibition dates.

The Maryland regulations were modeled after the EPA’s Significant New Alternatives Policy (SNAP) program (specifically SNAP 20 & 21). The EPA’s SNAP program implements section 612 of the amended Clean Air Act of 1990, which requires EPA to evaluate substitutes for ozone-depleting substances to reduce overall risk to human health and the environment. Through these evaluations, SNAP generates lists of acceptable and unacceptable substitutes for each of the major industrial use sectors. The EPA has modified the SNAP lists many times, most often by expanding the list of acceptable substitutes, but in some cases by prohibiting the use of substitutes previously listed as acceptable.

EPA has moved beyond the SNAP rules and has adopted three new rules for HFC uses and production: the Allowance Allocation and Trading Program Under the American Innovation and Manufacturing Act, the Technologies Transition rule, and the Management of Regulated Substances rule to address existing sources through reclamation.

In July 2023, EPA finalized the Phasedown of Hydrofluorocarbons: Allowance Allocation Methodology for 2024 and Later Years, which spins off of the regulation that was finalized by EPA in 2022 that created a framework to phasedown HFC production and consumption by 85% by the year 2036 through establishing the Allowance Allocation and Trading Program Under the American Innovation and Manufacturing (AIM) Act. On October 19, 2023, a Notice was published for the 2024 Allowance Allocation for Production and Consumption of Regulated Substances Under the AIM Act of 2020, and a Notice of Final Consequences. By October 1 of each calendar year, EPA must determine the quantity of allowances for the production and consumption of regulated substances that may be used for the following calendar year.

In October 2023, EPA finalized the Technologies Transition rule which restricts the use of certain higher-GWP HFCs in aerosols, foams, refrigeration and air conditioning, heat pump products, and equipment. The restrictions are to transition to alternatives listed by sector and subsector and would prohibit the manufacture and import of products containing restricted HFCs by January 1, 2025, in most cases, and would prohibit the sale, distribution, and export of products containing restricted HFCs a year later, which in most cases would be January 1, 2026. To support compliance with the prohibitions on the use of HFCs in specific sectors and subsectors, EPA requires labeling, reporting, and recordkeeping requirements for companies that import, manufacture, sell, or offer for sale products using HFCs.

The EPA’s AIM Act HFC Technologies Transition rule covers more end-use categories than Maryland’s HFC regulations and lowers the GWP allowable limit significantly from Maryland’s HFC regulations. Maryland’s regulations help to reduce HFCs with compliance deadlines between 2021 and 2024. The EPA’s new rules establish additional reductions from 2025 and beyond.

Additionally, the EPA has just proposed a rulemaking addressing existing sources, the Management of Regulated Substances, under subsection (h) of the AIM Act to maximize reclamation and reduce emissions of HFCs and their substitutes.

The EPA has received funding through the IRA to be used for a variety of different projects and programs. Of the projects, EPA plans to use funding on projects addressing HFCs and the AIM Act. The EPA received $38.5 million from the IRA to use towards the implementation and compliance of the AIM Act. $15 million of the funding will be used for grants on reclaim and innovative destruction technologies.

Maryland supports these national rules to achieve HFC reductions throughout the country. Maryland is exploring opportunities to develop a more robust workforce by offering training for  technicians. Implementation would be supported by a CA F-gas Reduction Incentive Program (FRIP).

Control of Methane Emissions from the Natural Gas Industry (current)

Methane is the primary constituent of natural gas and is the second most prevalent GHG emitted by human activity in the U.S. While methane doesn't linger as long in the atmosphere as CO2, it is initially far more impactful to the climate because of how effectively it absorbs heat. The oil and gas energy industry can be divided into four segments: (1) production; (2) gathering and processing; (3) transmission and storage; and (4) distribution. Maryland began taking steps to restrict methane emissions from the value chain by establishing a law in 2017 to ban hydraulic fracturing in the state operations that occur in the production segment. Hydraulic fracturing, a form of drilling to extract natural gas from underground depositories, poses the risk of emitting GHGs into the atmosphere. The ban on hydraulic fracturing eliminates this environmental risk.

With no gathering and processing operations in the state, Maryland then turned to the transmission and storage segment for regulatory action. On October 23, 2020, Maryland finalized regulations to reduce vented and fugitive emissions of methane from both new and existing natural gas transmission and storage facilities. In the transmission and storage segment, compressors are used to maintain the pressure of the natural gas in transmission pipelines to deliver extracted gas to its eventual end-user. Maryland’s Control of Methane Emissions from the Natural Gas Industry regulations affect new and existing natural gas compressor stations, one liquefied natural gas facility, and one underground storage facility in the transmission and storage segment. The regulations set requirements to mitigate methane emissions through fugitive emissions leak detection and repair, and control measure requirements to limit emissions from compressors and pneumatic devices. Facility-wide GHG emission data is required to be calculated and submitted to MDE annually. Additionally, owners and operators are required to notify MDE and the public during “blowdown events,” which are the release of pressurized natural gas from stations, equipment, or pipelines into the atmosphere so that maintenance, testing, or other activities can take place. 

Maryland adopted regulations as the EPA stalled and reversed direction on the stringency of controls in the oil and gas industry from 2016 to 2021. Maryland regulations to detect and mitigate methane emissions apply to both new facilities as well as existing facilities. This was a more stringent approach than EPA had required in a 2016 New Source Performance Standards (NSPS) rule for the oil and natural gas industry (40 CFR Part 60, Subpart OOOOa or 2016 NSPS OOOOa) emission reduction of volatile organic compounds (VOCs) and methane. Then in 2018 and 2019, EPA proposed relaxation and reconsideration amendments to certain provisions of the 2016 NSPS OOOOa. EPA reduced the sources affected in each sector, rescinded all the methane reduction requirements and kept only VOC requirements, minimized the leak detection requirements, and reduced reporting requirements.

Maryland supports national rules for this industry sector as many states have much more activity in oil and gas production than Maryland. Maryland, along with 14 other states, opposed EPA’s reconsiderations and joined litigation against EPA for failing to perform a legal duty to control emissions of methane from existing oil and gas operations. 

Beginning in 2021, EPA reversed its direction and announced policies to strengthen the controls required for GHG emissions in the oil and gas industry. In November 2021, EPA proposed New Source Performance Standards Updates and Emissions Guidelines to Reduce Methane and Other Harmful Pollution from the Oil and Natural Gas Industry. The proposal would expand and strengthen emissions reduction requirements that are currently on the books for new, modified, and reconstructed oil and natural gas sources and would require States to reduce methane emissions from hundreds of thousands of existing sources nationwide. The proposal encourages the use of innovative methane detection technologies and other cutting-edge solutions. EPA is proposing a comprehensive monitoring program to require companies to find and fix leaks (known as “fugitive emissions”) at new and existing well sites and compressor stations and allows for innovative advanced technologies to perform these leak surveys.

The proposed requirements expanded well site monitoring, which EPA projects will require routine monitoring at 300,000 well sites nationwide. All new and existing compressor stations would monitor and repair leaks at least once every three months. Surveys must include inspections of equipment that is most prone to large leaks and malfunctions, including hatches on storage tanks and flares.

EPA’s proposal would require all new and existing pneumatic controllers at production, processing, transmission, and storage facilities to have zero methane and VOC emissions, except sites in Alaska that do not have power. The proposal also would regulate emissions from intermittent vent pneumatic controllers for the first time. EPA’s proposal would eliminate the venting of associated gas from oil wells and require owners and operators to route the gas to a sales line where available. EPA’s proposal would strengthen requirements for storage tanks by adding tank batteries (groups of tanks that are adjacent and receive fluids from the same source) to the definition of facilities that must reduce VOC and methane emissions, as well as establish nationwide requirements to minimize methane and VOC emissions from liquids unloading for the first time.

In November of 2022, EPA proposed supplemental regulations to the 2021 action by adding requirements for abandoned and unplugged wells, improved performance to minimize malfunctions at flares, and improved tank truck loading operations. These proposals align with the current Maryland natural gas industry methane controls and add significant requirements beyond the Maryland rule for the extended gathering and processing of these fossil fuels that will achieve reductions in surrounding States.

Buy Clean (current)

The Buy Clean Maryland Act was passed by the Maryland General Assembly in 2023. This law requires producers of eligible materials to submit environmental product declarations to DGS by the end of 2024. DGS will work in consultation with MDOT to analyze the environmental product declarations and establish maximum acceptable GWP values for each category of eligible materials used in certain construction projects. 

In establishing the GWP for each category, DGS is required by the Buy Clean Maryland Act to base the maximum acceptable GWP on the industry average of GWP emissions for that material and determine the industry average of GWP emissions, which may include transportation-related emissions, by consulting nationally or internationally recognized databases of environmental product declaration. Contractors must submit facility-specific environmental product declarations for each eligible material before any installation. DGS can waive certain requirements if it determines that requiring the relevant eligible materials would be technically infeasible, result in a significant increase in project cost, result in a significant delay in project completion, or result in only one source or manufacturer being able to provide the necessary materials.

Beginning in December 2025 and throughout each following year, DGS is required to submit an annual report to the Maryland General Assembly that includes what DGS has learned about how to identify and quantify embodied carbon in building materials, including life cycle costs. DGS must also report on any obstacles encountered by them, bidders, or offerors in identifying and quantifying embodied carbon in building materials. To ensure that the most appropriate calculations are used in developing the maximum acceptable GWP for each category of eligible materials, DGS must include in its report a detailed description of its methodology.

The Buy Clean Maryland Act includes an Environmental Product Declaration Assistance Fund, administered by the Department of Commerce, that awards grants to producers of eligible materials. This fund supports the development, standardization, and transparency of environmental product declarations for construction materials and products, and consists of money appropriated in the state budget.

Maryland also joined the Federal-State Buy Clean Partnership, initiated by the Biden Administration in 2023. Through this partnership, the State will work with federal and other state partners to enhance adoption, implementation, and harmonization of Buy Clean policies and maximize regional, cross-jurisdictional solutions whenever possible. 

State Incentives for Industrial Decarbonization (current, modified)

MEA currently provides grants for energy efficiency and decarbonization projects at industrial facilities and, under this plan, the state will provide additional support for decarbonization activities across Maryland’s industrial sector. Priority investments could include cement manufacturing decarbonization and HFC reduction. MDE, MEA, and the Maryland Clean Energy Center (MCEC) will increase staff capacity to partner with industry to streamline access to grants and financing for emissions reduction projects. 

Impact of Industrial Sector Policies

The new policies are modeled to reduce industrial sector GHG emissions by 181.6 MMTCO2e between now and 2050. The societal benefit of this level of emissions reduction is estimated to be $34 billion. Figures 6-8 illustrate the change in GHG emissions from this sector based on historical and modeled trends.

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Figure 8: Maryland’s fossil fuel industry GHG emissions trends, historical and projected, from 2006 to 2050 based on current and new policies