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Biden’s Proposed Phaseout of Inefficient Furnaces Would Cut Costs and Emissions

June 13, 2022
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Washington, DC—The Biden administration today proposed to phase out the most inefficient gas furnaces, which would significantly reduce household costs and climate-warming emissions. The plan arrives as millions of U.S. families may face a spike in gas prices for home heating later this year spurred by Russia’s invasion of Ukraine.

The Department of Energy (DOE) estimates that its landmark efficiency standard for home furnaces—potentially the first meaningful update in 35 years—would reduce costs for each affected household by nearly $500 over the life of a furnace and cut 373 million metric tons of carbon emissions over 30 years of sales. The standard also would reduce emissions of nitrogen oxides, which cause asthma attacks, cardiovascular disease, and even premature death.

“Home heating bills strain the budgets of many households, especially those with low incomes, yet we’re still installing brand-new furnace models that waste a lot of the heat. The Biden administration is right to phase out the most inefficient models,” said Andrew deLaski, executive director of the Appliance Standards Awareness Project. “We’ve had far-more-efficient options available for years now. The new standard would reduce needless costs and greenhouse gas emissions.”

Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, said: “At a time when global gas markets are in turmoil, this is a good step to help protect millions of families against price spikes that can send bills through the roof.” Nadel continued, “We’re one big step closer to finally moving past outdated furnace technology. The administration deserves kudos for stepping up with a strong proposal here. Now they’ll need to move promptly and get the job done.”

Nearly half of U.S. homes—about 50 million—are heated with a gas or propane furnace. Households with inefficient (“non-condensing”) gas furnaces face annual average heating bills of about $700. And bills can be much higher in older homes that tend to be less well insulated, or those in colder climates. 

Manufacturers have developed substantially more-efficient models—known as condensing furnaces—that capture and use more of the heat from the furnace’s combustion chamber, thereby reducing waste. About half of new purchases are now condensing models, but many consumers still end up with the non-condensing models because that’s often what a landlord or a builder chooses—or because a homeowner had to make a quick decision when replacing a broken furnace in the winter.

The standard proposed by DOE would require furnaces to use about 15% less energy than today’s most wasteful models, effectively phasing out non-condensing models. DOE estimates that with the new standards, the vast majority of consumers who would’ve purchased a non-condensing furnace would instead purchase a condensing furnace, while most of the remainder would purchase an electric heat pump. By law, the standard could not take effect until five years after it is finalized.

Furnace efficiency standards have not been meaningfully updated since they were set by Congress in 1987. DOE made a slight update in 2007, but to an efficiency level that 99% of models already met. DOE issued a stronger standard in 2011, but a gas utility trade association sued the department on procedural grounds; DOE settled in 2014 and agreed to redo the standard.

In 2018, gas utilities petitioned DOE to issue a rule that would prevent the department from later setting strong standards for gas products, including furnaces. DOE finalized such a rule in January 2021 in the final days of the Trump administration, and then undid the action in December 2021 after the Biden administration reviewed the record on the earlier action; the gas utilities subsequently sued the department over that most recent action. That litigation remains pending.

Federal law requires DOE to periodically review standards for furnaces and other products; under the court-approved settlement in 2014, DOE was supposed to finalize a new furnace standard by 2016.

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