New York City Building Emissions Law Upheld, Providing Example for Other Jurisdictions

New York City’s Local Law 154, established in 2021, sets restrictions on emissions from new construction, including “the combustion of any substance that emits 25 kilograms or more of carbon dioxide per million British thermal units of energy.” Local Law 154 exempts certain manufacturers, laboratories, laundromats, hospitals, crematoria, and commercial kitchens. In December 2023, plaintiffs, including six trade associations and a union, sued the city on the argument that the law indirectly prevents the installation of natural gas appliances and was therefore preempted by the Energy Policy and Conservation Act (EPCA). Federal preemption means that federal law overrides state or local law. 

In March 2025, the District Court for the Southern District of New York (SDNY) upheld New York City’s Local Law 154, finding that it does not directly regulate energy use and is therefore not preempted by EPCA. Currently, the SDNY ruling only applies to this specific case of Local Law 154 in New York City. The plaintiffs are appealing the case to the Second Circuit Court, which covers Connecticut, New York, and Vermont. 

This case may serve as an example for other jurisdictions with goals and policies to reduce emissions in buildings. States and local governments are using codes, building performance standards, air quality regulations, and other approaches to achieve emissions reduction goals, lower costs for consumers, and provide broader public benefits, including occupant health. 

In this blog, we explore the background of EPCA, the latest trends in challenges to these policies, EPCA’s impact on the formation of the 2024 International Energy Conservation Code, and what this all means for states and jurisdictions looking to create forward-thinking energy policy. 

EPCA Background and Context
EPCA is a federal law enacted in 1975 in response to the energy crisis of the 1970s. The first version of EPCA established the Strategic Petroleum Reserve, created Corporate Average Fuel Economy (CAFE) standards, and tasked the Department of Energy (DOE) with creating appliance efficiency standards. Updates to EPCA provisions include the Energy Policy Act (EPAct) of 1992, the EPAct of 2005, the Energy Independence and Security Act (EISA) of 2007, and more recently, the Inflation Reduction Act and Bipartisan Infrastructure Law. These laws expanded the mandate for DOE to set federal appliance efficiency standards, which now exist for 70 products, including gas-fueled products.

State and Local Emissions Reduction Provisions & EPCA Lawsuits 
Several jurisdictions across the country seek to limit the use of gas-fueled products to reduce greenhouse gas emissions and meet local climate goals. As of this writing, interested parties have sued 13 states and jurisdictions over their various emissions reduction policies using an EPCA-based argument. Opponents claim that the state or local governments overstepped their authority. The argument put forth in these cases by the opponents to code and other policy proposals is that EPCA preempts local jurisdictions from banning gas-fueled products because of the language in 42 U.S. Code § 6297 (c). This section states that if there is a federal energy conservation standard for a product, states and jurisdictions cannot adopt their own conservation standards for that same product. 

California Restaurant Association v. City of Berkeley
In 2019, the Berkeley City Council passed Ordinance 7672, which made Berkeley the first city in the country to ban natural gas infrastructure in new construction through the municipal code. Effectively, Berkeley would no longer approve new construction permits 

for building proposals that included natural gas infrastructure. The California Restaurant Association (CRA) filed a lawsuit in 2019 against the City of Berkeley on the grounds that EPCA preempted Ordinance 7672. In 2023, the Ninth Circuit Court of Appeals reversed a lower court’s dismissal of the CRA’s case against Berkeley over the ordinance. This ruling is binding within the Ninth Circuit, which includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, and the Northern Mariana Islands.  

The Berkeley and New York City cases show that the same EPCA-based argument can lead to divergent outcomes when applied to different types of laws and in different districts. 

Snapshot Across the Northeast
Here is a snapshot of EPCA cases around the Northeast as of May 28, 2025:  

• Mulhern Gas Co., Inc. v. Rodriguez – Targets New York State laws that require the state building code to ban gas appliances and building systems. As of December 2024, both parties and intervenors filed motions to bring the matter to a conclusion.
• Maryland Building Industry Association, Inc. et al v. McIlwain – Targets Maryland’s Building Energy Performance Standards. As of May 2025, Maryland moved to dismiss the amended complaint.
• Elizabeth Condominium Association, Inc. v. Montgomery County – Targets Montgomery County’s Building Performance Standards. The suit was filed on March 27, 2025.
• National Association of Home Builders et al. v. Montgomery County – Targets Montgomery County’s Comprehensive Building Decarbonization Law (Bill 13-22). Montgomery County filed a motion to dismiss the amended complaint on March 31, 2025.
• National Association of Home Builders et al. v. Washington D.C. – Targets Washington D.C.’s Clean Energy DC Building Code Amendment Act of 2022. Parties are currently engaged in the summary judgment process.
• Other lawsuits outside of the Northeast are occurring in the South Coast Air Quality District (Southern California), Colorado, Denver, Washington, and the Village of Oak Park, Illinois. 

As is evident from these cases, there are many ways that jurisdictions are looking to limit emissions associated with gas appliances, and it is not clear how the court will apply the law to each mechanism. This leads to uncertainty when state and local jurisdictions update their building energy codes, building performance standards, and appliance standards to meet evolving energy performance goals, since these plans may be challenged in court. 

Impact on the 2024 International Energy Conservation Code 
In response to ongoing legal uncertainty around EPCA and pressure from industry stakeholders, the International Code Council (ICC) Board reorganized the proposed structure of the 2024 International Energy Conservation Code (IECC) and relocated electrification language that could be construed as restricting fuel choice. 

As part of this reorganization, compromise-driven language from the consensus committees on electric-ready, renewable energy, and EV-charging infrastructure was moved from the main code into the appendices. The Board also moved language on commercial electrification, residential electrification, and the commercial prescriptive glide path to net zero from the appendices to a new type of section called “resources.” Lastly, the Board removed the section on the residential glide path to net zero, which was originally intended to be an appendix. 

These new resources are prefaced by language that indicates that they are not mandatory and may be challenged in court. Relocating electrification language to a new resources section further weakens its impact and visibility in the code adoption process. Creating the resources section was unexpected, as it went against the recommendations from the ICC Appeals Board. Energy efficiency advocates argue that the ICC Board acquiesced to the building industry’s perspective and reversed the 2024 IECC consensus committee’s compromise language. 

State and local governments advance building codes to support the creation of efficient, low-carbon buildings and to address the split incentives between builders and homeowners. Builders do not pay the energy bills for nor live in the homes they build, so compliance with an effective and forward-thinking building code ensures homes are safe, energy efficient, and cost-effective. Because resources are not part of the enforceable code, states and jurisdictions must take additional steps to adopt this content, which may limit their use in practice and be less effective in addressing the split incentive problem. 

What Now?
For the past year, it seemed that the CRA v. City of Berkeley decision could be the prevailing opinion on electrification provisions in local code ordinances, which had the potential to stifle other city or state actions that sought to lower emissions from fossil fuel-based equipment or appliances. Now with the New York City case decided, it is no longer clear that EPCA preemption and limits on electrification efforts will win the national legal battle. As judges announce further decisions in the EPCA preemption cases, states and jurisdictions can create legally tested building emissions policies. As further EPCA court cases play out, states and jurisdictions can evaluate if using the language in the 2024 IECC resources as part of their next building energy code update aligns with their building code goals and the court decisions.  

If you are interested in technical assistance with building energy codes, please reach out to the NEEP codes team.