With the goal of reducing greenhouse gas (GHG) emissions that contribute to climate change, the Department of Energy (DOE) proposed new energy efficiency standards Monday for residential gas furnaces. 

The new emissions standard would require new home furnaces to convert 95% of the gas they burn into heat. Older models may have a conversion rate as low as 56%. DOE estimates that this efficiency improvement would save consumers $1.9 billion annually due to lower gas bills, or $500 over the lifetime of each new furnace.

Over a 30 year period, the new standard would reduce carbon emissions by 373 million metric tons and methane emissions by 5.1 million tons – the equivalent of one year’s emissions for 61 million American homes. 

“By updating energy standards for many carbon-emitting appliances, such as home furnaces, the Biden Administration is working to save consumers money,” Secretary of Energy Jennifer Granholm said in a statement accompanying the proposed rule’s publication. “These efficiency measures not only reduce carbon and methane emissions, but also provide huge material benefits to American households in the form of cleaner air, modernized technology, and cheaper energy.”

Gas furnaces, used for heating and hot water, account for roughly 15% of annual U.S. residential energy use, according to DOE.

The rule is proposed to go into effect in 2029. It would effectively require that only ‘condensing furnaces,’ which capture excess heat from the furnace’s exhaust gases, are sold. Canada has already required condensing furnaces for residential heating for over a decade.

“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,” said Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy.

“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. “The new standard would reduce needless costs and greenhouse gas emissions.”

The gas industry, however, is opposed to the proposed standards. “This move will place an undue burden on customers,” the American Gas Association (AGA) said a statement.

“Many older homes, especially in low-income neighborhoods, cannot accommodate the expensive venting requirements for a condensing furnace,” the AGA said. “These customers would be forced to switch to an electric furnace.

Electric furnaces, according to DOE, are more expensive than gas furnaces. The AGA claims that currently, because most electricity is generated from fossil fuels such as coal and natural gas, the lower efficiency of electric furnaces actually means they have a larger carbon footprint than gas furnaces. However, if the U.S. electricity sector makes the energy transition to clean energy sources such as solar and energy, electric furnaces would ultimately produce less conventional pollution and climate pollution than gas furnaces.