NYC Local Law 97 (LL97) Carbon Emissions Limits

All buildings over 25,000 square feet in total floor area and two or more buildings on the same tax lot that together exceed 50,000 square feet (including condominiums and cooperatives) must adhere to the law, although certain buildings have alternate requirements. It is important to note that today, 75-80% of all multifamily buildings are already in compliance with the first carbon emissions limit deadline.

Buildings that have alternate requirements include:

• HDFCs

Buildings that do not currently have any emissions limits or prescriptive measure obligations under this law:

• Houses of worship
• City-owned buildings
• Multifamily properties that are three stories or less with no central HVAC systems or hot water heating systems
• Industrial facilities primarily used for the generation of electric power or steam
• Buildings owned by a limited-profit housing company organized under article 2 of the private housing finance law (Mitchell Lama)

For buildings not covered under the alternate requirements, the two important submission years to know are 2024 and 2029.

In 2024, the carbon limits take effect. Starting in 2025, covered buildings will need to submit a report showing their carbon emissions in 2024. Any buildings that release carbon emissions above their calculated limit will be fined. In 2029, the permitted emissions caps are significantly lowered, in an effort to get NYC’s buildings to a carbon reduction of 40% by 2030.

Buildings containing one or more rent-regulated units, which are exempt from the emissions limits, can submit evidence of having performed the prescriptive measures required in the law instead of meeting the emissions limits.

No. The 2024 limits were designed to only cover the 20-25% highest carbon emitting buildings. About 75-80% of multifamily buildings are already in compliance for 2024.

However, if a building’s carbon emissions are above the set limits, they will at least need to make operational changes to get into compliance.

1. Adjusting temperature set points for heat and hot water to reflect appropriate space occupancy and facility requirements
2. Repairing all heating system leaks
3. Maintaining the heating system, including but not limited to ensuring that system component parts are clean and in good operating condition
4. Installing individual temperature controls or insulated radiator enclosures with temperature controls on all radiators
5. Insulating all pipes for heating and/or hot water
6. Insulating the steam system condensate tank or water tank
7. Installing indoor and outdoor heating system sensors and boiler controls to allow for proper set-points
8. Replacing or repairing all steam traps such that all are in working order
9. Installing or upgrading steam system master venting at the ends of mains, large horizontal pipes, and tops of risers, vertical pipes branching off a main
10. Upgrading lighting to comply with new standards
11. Weatherizing and air sealing where appropriate, including windows and ductwork, with a focus on whole-building insulation
12. Installing timers on exhaust fans
13. Installing radiant barriers behind all radiators

Remember, 75-80% of buildings should not have fines for 2029, as they are already in compliance. But if your building is currently over the emissions limits, you have two paths to get into compliance:

1. Alternative Compliance Path: You may be so far over the limits (40% or more), you fall into the “alternative compliance path” category, in which you would need to reduce your building’s emissions by 30% over its 2018 emissions level.
2. Make changes: You can plan to get below the 2024 threshold through energy conservation measures, renewable energy, and/or operations changes.

If by 2024 you are still over the limit, your fines will entirely depend on your building’s total emissions.

Fines are calculated by multiplying your emissions overages by $268. The equation is the same for both 2024 and 2029, but with a different carbon limit.

Should you find that you are in store for a future fine, take that fine into account when calculating the return on investment of future energy projects. For example, if you are subject to a $10,000 per year fine, and you are weighing the value of a potential energy project that costs $100,000 but would save you $5,000 per year in energy costs in addition to the $10,000 per year fine, you will have a much shorter payback. Not to mention, that project will have other upsides like improved tenant comfort and health.

It’s important to note that non-compliance by failing to report comes with a hefty fine and providing false reports comes with an even heftier fine (and potentially jail time).

First, you need to design with minimum carbon emissions in mind, so that once your building is fully operational, it will comply with the carbon emissions limit law. But you also will need to install solar photovoltaic (PV) or a green roof as outlined in the “Green Roofs” piece of legislation, Local Law 92 (LL92) and Local Law 94 (LL94). We recommend that you talk with your design team now about how to best integrate solar into your roof.

Right now, they are separate. As currently written, you will still need to submit annual energy usage to ENERGY STAR Portfolio Manager for compliance with Local Law 84 (LL84) and Local Law 133 (LL133), and a separate report (signed off on by a “registered professional”) for the new emission law.  But we believe that management and enforcement of all these energy-related laws will be brought together under the same new “office of building energy and emissions performance,” which may streamline the reporting requirements. Whether or not the City streamlines the reporting, we plan on making the process as easy as possible for our clients. Your dedicated Energy Analyst will be able to handle both sets of reporting, and we will offer a discount for doing both benchmarking and carbon emissions compliance submissions with us.

Getting the most out of energy benchmarking is even more important with the new emissions law. Benchmarking is a powerful, strategic tool that unlocks areas of opportunity for energy and water efficiency improvements and savings across your portfolio. You can use it to get ahead of your energy performance so that you will be ready when 2024 and 2029 roll around. Need more information on energy benchmarking? Our Executive Vice President, Strategic Initiatives, Jon Braman, explains the benefits of benchmarking.

Local Law 33/95 (LL33/95), the building energy grade ordinance, is already an active New York City ordinance that requires buildings above 25,000 square feet to post an energy efficiency grade at each public entrance beginning in 2020. Similar to the Department of Health grades for restaurants, a building’s energy efficiency grade will be a letter.

However, Local Law 95 (LL95) changed the grade distribution that was determined in Local Law 33 (LL33). City grades are determined by a building’s ENERGY STAR Portfolio Manager score, which comes from the annual energy benchmarking that is required under Local Law 84 and 133. Here is the breakdown of the new grades:

A: 85 & above
B: 70-84
C: 55-69
D: 54 & below
F: Non-compliance
N: Exempt or score not feasible to obtain*

Labels, like the sample one below, will be made available in the DOB NOW public portal on October 1. Building owners must post their building’s grade by October 31 annually. Failure to do so will result in an annual fine of $1,250. For more information on this process, read this Local Law 33/95 overview by Jeannine Altavilla Cooper, Director of Analysis, New York.

*Buildings with an N grade contain a data center, television studio, and/or a trading floor that is >10% Gross Floor Area (GFA) and are exempt from compliance.

The best way to think about a Local Law 87 audit is that it should provide a roadmap to achieve the carbon emissions targets in Local Law 97. And the retro-commissioning that is required in Local Law 87, if done right, should help capture low-cost carbon savings. While previous Local Law 87 audits may not have been as focused on identifying measures that would maximize carbon emissions reductions, you can be sure that we are re-tooling our audits to be focused on these carbon emissions targets now.

For rent-regulated buildings, there is some overlap between the prescriptive measures in Local Law 97 and the required retro-commissioning measures in Local Law 87. Regardless of your building size or occupant type, those prescriptive measures are lower cost and have an immediate impact on your building’s performance, operations, and tenant comfort.

And just because your building was designed to be high-performance doesn’t mean it can’t use a tune-up. Our Vice President, New York, David Sachs explains how Local Law 87 can help get you into compliance with Local Law 97.

Note that Local Law 87 applies to buildings 50,000 square feet or more, whereas Local Law 97 applies to buildings 25,000 square feet or more. Buildings 50,000 square feet and over are subject to both.