Vermont passed its Affordable Heat Act in 2023, marking the official start of the state’s transition from heating homes with fossil fuels to using cleaner alternatives instead — a shift that will be crucial to meeting state climate goals.
Last week, Vermont reached a milestone in implementing the law: Its Public Utility Commission (PUC) released draft rules for how the clean heat standard, one of only a handful in the nation, will work. But the policy’s future remains murky.
Vermont’s clean heat law seeks to simultaneously penalize the state’s fossil fuel suppliers for their emissions and help its residents pay for the installation of cleaner heating sources. Fossil-fueled heating is a major source of greenhouse gas emissions nationwide; that’s especially true in Vermont, where home heating accounts for more emissions than any other sector, given the state’s heavy reliance on fuel oil.
Under the proposed rules, Vermont’s oil and propane suppliers, along with its gas utilities, will have to obtain a certain amount of “clean heat credits,” depending on how much fuel they delivered the year before and its carbon intensity.
The PUC’s new draft rules would allow these companies to purchase clean heat credits via a marketplace; the proceeds of credit sales would then fund efficiency and electrification projects, particularly for low- and moderate-income households. Firms can also generate credits by installing heat pumps, weatherizing homes, and delivering biofuels and other alternative fuels to customers.
This last point — the decision to allow biofuels, biomass, “renewable natural gas,” and hydrogen to qualify as clean heat measures — has drawn criticism from climate advocates. In many cases, alternative fuels can actually raise, rather than reduce, greenhouse gas emissions.
“The main concern is that [alternative fuels] will be prioritized over real solutions that can help us reduce our emissions and improve our health, like heat pumps, like weatherization, like thermal networks,” said Eva Morgan, an organizer with 350Vermont. “It’s really important that we move these things forward, but it’s even more important that we do it right. We don’t want to get stuck into a system that produces even more emissions.”
Climate advocates want the clean heat standard to focus instead on incentivizing energy efficiency and electrification projects. Electric heat pumps can slash emissions from home heating even when the grid powering them is dirty. They’re even more effective when the grid is clean though, and Vermont aims to have a 100 percent renewable grid by 2035 thanks to a law passed in June.