Governor Charlie Baker signed a major climate bill into law on Thursday that will accelerate the clean energy transition in the state by boosting offshore wind and solar, and — in a first for Massachusetts — allowing some cities and towns to ban the use of fossil fuels in new buildings and major renovations.
Baker’s approval comes after weeks of speculation that he might veto the bill, and just days after he said he particularly disapproved of the fossil fuel ban because of his concern it could make it harder to construct affordable housing.
Ultimately, though, he said the bill’s changes to the offshore wind procurement process and its advances in clean energy were important enough to secure his signature.
“I continue to want us to be a pretty big player in that space because it’s a sustainable way to create a lot of jobs, for a very long time,” Baker said in an interview with the Globe.
As the state recovers from two record-breaking heat waves, Senator Michael Barrett, a Democrat from Lexington and one of the bill’s architects, noted that the passage of the state legislation — along with the expected passage of the federal Inflation Reduction Act, with its $369 billion in energy and climate financing — should give people hope. “There’s plenty more to do, but nothing motivates like success,” he said.
Though the legislation could kick off sweeping changes to state climate policy, it does not include funding for all of the programs it creates.
Much of that funding is meant to come from a separate multibillion-dollar economic development bill that the Legislature failed to complete before the end of the legislative session last month. Lawmakers say they plan to continue negotiations on the bill in informal sessions, but the timing and outcome remain uncertain.
“The economic development bill is fairly essential, as a lot of the climate programs need funding to work,” said Amy Boyd, policy director of the clean energy advocacy group Acadia Center.
That unfinished business notwithstanding, the new law will initiate major changes to Massachusetts’ climate policy, including by altering the solicitation process for offshore wind projects.
“It really bolsters the offshore wind industry. It sends a signal to the world that Massachusetts will be a significant player in the space,” said Representative Jeff Roy, who negotiated the bill in the Legislature along with Barrett.
The new law will scrap the so-called price cap that currently requires each new offshore project to offer power at a lower price than the one brought online before it. Critics fear the cap has discouraged bids.
That provision is a win for Baker, who has long sought to eliminate the price cap, and whose administration plans to solicit bids for offshore wind development later this year.
Another provision would allow Massachusetts to join with other New England states in bidding for wind, solar, or other forms of renewable energy. This would, for example, allow the Commonwealth to team up with Maine in bids for onshore wind in a remote area in Aroostook County.
In another significant change, the bill will remove wood-burning power plants from the state’s renewable portfolio standard, meaning they will no longer count toward renewable energy goals in Massachusetts or be eligible for state clean energy subsidies. Wood-burning plants produce harmful pollutants like carbon monoxide, and research shows they can emit even more carbon at the smokestack than coal-fired plants.
The provision will grandfather in a small number of existing wood-burning facilities that are currently in the program, and will still allow biomass plants to obtain energy credits under a separate state program focused on generators of “clean heat.” Still, it marks a victory for environmental activists who have long argued that biomass is not renewable.
Among the new law’s most controversial components: a provision allowing some municipalities to ban fossil fuel hookups in new buildings and major renovations.
The legislation will create a pilot program allowing 10 cities and towns to adopt bans as long as they exempt life science and health care facilities, and first meet their affordable housing requirements under state law. In order to qualify, the town or city must have asked the Legislature for special permission via a home rule petition. So far, Cambridge, Newton, Brookline, Lexington, Arlington, Concord, Lincoln, Acton, Aquinnah, and West Tisbury have done so, but it is unclear if they will all meet the affordable housing requirement.
The governor has repeatedly voiced concern about the proposed bans. He attempted to weaken the program in his recommended amendments, but the Legislature ignored those suggestions.
Baker described the provision as a kind of “exclusionary zoning,” saying it could threaten participating towns’ ability to keep housing affordable. But ultimately, though he cautioned that officials should closely watch the pilot’s effects on housing costs, he decided to sign the bill.
“Every piece of legislation comes with positives and negatives, especially big complicated ones,” he said on Thursday.
The law will also empower a fund run by the Massachusetts Clean Energy Center to give money to companies working on novel forms of clean power, including nuclear fusion and networked geothermal. It also includes provisions to help the Clean Energy Center expand its workforce development programs to help people in underserved communities access green jobs.
The legislation also sets up a number of new funds, including one that would increase rebates for electric vehicles, and add an additional rebate for low-income purchasers; another focused on offshore wind procurement; and a third for electric vehicle charging infrastructure deployment.
But the bill itself doesn’t actually fully fund those new initiatives.
That was a strategic choice on the part of the Legislature. All bills that include spending proposals are considered appropriations bills, which the governor can line-item veto. But on policy bills, the governor can only approve or veto the entire proposal.
The separate $4.5 billion economic development act would authorize hundreds of millions of dollars in investments for clean energy, electric vehicle infrastructure, clean building and housing upgrades, and other green projects, Roy said.
That legislation never made it out of conference committee during the legislative session, but Roy said the House and Senate have committed to continuing negotiations in informal sessions.
Alli Gold Roberts, senior director of state policy at the Boston-based climate organization Ceres, noted that the Legislature didn’t finalize the climate bill until the very end of the session.
“Unfortunately, the culture in Massachusetts policymaking, particularly on climate … is that we push to the absolute last deadline,” she said. “But I understand that there are a lot of priorities that the legislators are facing.”
For Baker, the climate bill was the last major opportunity he’ll have as governor to shape his legacy on climate change. He said he still has hope that the economic development legislation will be passed into law, so the climate bill’s programs are funded.
“I remain optimistic that one way or another, that bill will find its way through the process,” Baker said of the spending legislation.
This story has been updated to correct the amount of energy and climate financing in the Inflation Reduction Act.