The Trump administration has decided to terminate the Environmental Protection Agency’s widely recognized and effective Energy Star program, which has set energy efficiency standards for over three decades. This decision results in the loss of significant benefits for commercial real estate owners and operators across various sectors, including multifamily housing and office buildings. The Energy Star program has long provided a valuable means to achieve environmental goals while simultaneously reducing costs and enhancing return on investment.
The EPA plans to eliminate two key divisions, according to CNN: the climate change office and the climate protection partnership office, which has led to the shuttering of the Energy Star program.
Established in 1992 during the George H.W. Bush administration, Energy Star was a public-private partnership that encouraged manufacturers to develop and promote energy-efficient, cost-saving appliances. Both consumers and businesses embraced the program’s products, which were marked by the familiar blue Energy Star label.
According to the program’s most recent annual report released in May 2024, since its inception, Energy Star standards and products have saved 5 trillion kilowatt-hours of electricity, reduced greenhouse gas emissions by 4 billion metric tons, and avoided over $500 billion in energy costs from 1992 through 2023. Given the current developments, an updated report is unlikely to be published this year.
During a staff meeting on Monday, Paul Gunning, director of the EPA Office of Atmospheric Protection, informed employees that the Energy Star program, along with other climate initiatives not mandated by law, is being deprioritized and phased out. This was confirmed by a recording obtained by The New York Times.
The EPA has described the changes as part of an organizational restructuring intended to "better advance the agency’s core mission," although it has not explicitly confirmed the program’s termination.
In March, nearly 36 industry groups and appliance manufacturers sent a letter to EPA Administrator Lee Zeldin, emphasizing that Energy Star is an effective "non-regulatory" public-private collaboration. The letter warned that eliminating the program would not serve the American public and could lead to initiatives that undermine the administration’s goals by decreasing product features, functionality, or increasing costs.
The Trump administration had previously attempted to defund Energy Star in 2017 during its first term, but pushback from over 1,000 companies and bipartisan lawmakers successfully preserved the program.
These companies argued that Energy Star should be strengthened rather than weakened.
Energy Star certifications have been especially valuable to the commercial real estate sector. Medical offices have used the program to address environmental, social, and governance concerns, while research by CBRE has shown that buildings with Energy Star and LEED certifications command rent premiums. In multifamily properties, Energy Star appliances contribute to annual savings by lowering energy costs in apartment units.
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