In 2015, Passive House Institute US released a new, climate-specific passive building standard for North America. The new standard was the product of a three year research project funded by the U.S. Department of Energy, and performed in collaboration with Building Science Corporation. PHIUS’ work was spurred by its experience in attempting to implement the German standard, developed by Passivhaus Institut in Germany, to projects across North America’s various climate zones. In summary, the German standard led designers to some design errors, and was found not cost effective in much of North America. This paper describes why and how the new standard was developed, how it differs from the German metric and how it constitutes a cost optimized envelope design baseline for reaching zero energy and carbon in North America.