Local Law 97 (LL97) Updates for NYC Building Owners
Introduction
New York City has set emissions reductions targets for private buildings of 40% by 2030, and 80% by 2050 (compared to 2005 levels). With the aim of meeting these targets, the city passed the Climate Mobilization Act in April 2019, which included Intro 1253. This became Local Law 97 (LL97) in May 2019, and is managed by the new Office of Building Energy and Emissions Performance. It sets greenhouse gas emissions limits for buildings larger than 25,000 SF, and it covers almost 60,000 buildings. LL97 supplements the Benchmarking Law (LL84), which requires building owners to submit energy and water consumption data each year. If building owners do not comply with the emissions limits of LL97, they will face fines of $268/metric ton CO2e emitted over the limit.
As a leader in energy engineering and construction, CEG helps building owners comply with local energy compliance laws such as LL97. CEG can guarantee LL97 compliance for building owners typically at no net cost by designing high-value utility savings measures. While this article focuses on LL97 and how to avoid fines, additional information regarding our guaranteed compliance offering in other jurisdictions with energy performance standards is found here.
What is Local Law 97?
LL97 mandates that buildings >25,000 SF in NYC must meet emissions intensity limits (in kg CO2e/SF) by building type starting in 2024. There are 10 building categories with different limits, based on building code occupancy groups (see table below).
| Occupancy Classification | 2024-2029 Limit
(kg CO2eq/sf/year) 2030-2034 Limit |
(kg CO2eq/sf/year) B - Ambulatory health, emergency response, and other critical applications listed in LL97 |
23.81 |
11.93 |
M - Mercantile |
11.81 |
4.03 |
A - Assembly |
10.74 |
4.20 |
R1 - Residential (Hotels) |
9.87 |
5.26 |
B - Business |
23.81 |
11.93 |
E - Educational, I4 - Institutional |
7.58 |
3.44 |
R2 - Residential (Multifamily) |
6.75 |
4.07 |
F - Factory |
5.74 |
1.67 |
S - Storage, U - Utility & Miscellaneous |
4.26 |
1.10 |
II - Institutional |
11.38 |
5.98 |
|
Limits will be established through 2050, but only the first two are currently set. Period 1 covers 2024-2029, and is designed to impact the top 20% of emitters. Therefore, many buildings will already be compliant. Period 2 runs 2030-2034, and is designed to impact the top 75% of emitters, which means the majority of buildings will not be compliant. Period 3 is 2035-2039, and Period 4 is 2040-2049. The emissions limits for these will be published on January 1, 2023.
The limits are based on specific coefficients, which have already been set for the 2024-2029 period (see table below). Coefficients for 2030-2034 will be published on January 1, 2023.
| Energy Source | Greenhouse Gas Coefficient
(metric tons CO2e/kBtu) Greenhouse Gas Coefficient |
(kg CO2eq/kBtu) Utility Electricity |
0.00008469 |
0.08469 |
Natural Gas |
0.00005311 |
0.05311 |
#2 Fuel Oil |
0.00007421 |
0.07421 |
#4 Fuel Oil |
0.00007529 |
0.07529 |
District Steam |
0.00004493 |
0.04493 |
|
Does my building have to meet the limits?
If your building is a privately-owned building in New York City and is larger than 25,000 SF, then you will have to meet the limits beginning in 2024. Additionally, if you own two or more buildings that cover 50,000+ SF and are under the same tax lot or are part of the same condominium, then the emissions of the buildings combined must meet the limits. However, there are certain special circumstances and exemptions, which are listed below.
Special circumstances
If a building has different occupancy classifications, then the emissions will be calculated separately for the different areas and added together.
If a building is converted to an occupancy classification with a lower emissions limit, it is eligible for a time extension.
Income-restricted buildings that are owned by certain limited-profit housing companies are exempt from the limits until 2035.
Buildings with more than 35% rent-regulated units, HDFC coops, and buildings in project-based federal housing programs do not have to comply at all.
Owners of nonprofit hospitals and healthcare facilities can apply for a percent reduction requirement, instead of an emissions cap.
How does my building meet the LL97 requirements?
If LL97 applies to your building and its emissions levels are above the cap, you as the building owner have the responsibility to lower the building’s carbon emissions until they are below the cap for the building type category. Building owners must submit annual emissions reports on May 1st of every year, beginning in 2025. These must be stamped by a Registered Architect or a Professional Engineer. The reports must either show that the building was in compliance with the applicable emissions limits for the previous year, or show the amount by which the emissions exceeded the limit. Fines will begin in 2025, once the reports are filed.
What if my building does not meet the LL97 requirements?
If your building does not meet the LL97 requirements, you have a few different options for meeting them. These include 1) implementing upgrades, replacements, and changes that reduce the building’s energy usage and emissions intensity, 2) switching over to using clean energy sources such as hydroelectricity, solar PV, geothermal, tidal energy, wave energy, and wind, 3) purchasing renewable energy credits (RECs) to cover all or some of the emissions reductions, or 4) purchasing carbon offsets to cover up to 10% of reductions. The City is also designing a carbon trading program that eventually can be used to help owners meet the requirements.
Certain buildings can do prescriptive energy efficiency measures instead of meeting an emissions cap. These measures include, but are not limited to, adjusting temperature setpoints, repairing leaks, adding insulation to pipes and tanks, weatherizing the building, adding timers to equipment, updating controls, and upgrading lighting.
Penalties and fines
There are different kinds of fines and penalties that buildings can face, depending on the type of violation (see table below).
| Violation Type | Maximum Fine |
| Failure to File a Report | $0.50/building SF, per month |
| Exceed Emissions Limit | $268/metric ton CO2e over the building's limit |
| False Statement (misdemeanor) | $500,000 and up to 30 days of imprisonment |
Conclusion
LL97 requires building owners to meet increasingly stringent greenhouse gas emissions limits or face fines.
CEG guarantees LL97 compliance to ensure fine avoidance, simplify your operations, and uncover energy savings. As experts in energy engineering, we will identify, design, and implement energy savings improvements in order to meet LL97 requirements, as well as reduce utility and operating costs. Beyond compliance, our energy savings will improve your net operating income (NOI) and invest in CapEx upgrades to modernize your building’s energy infrastructure. We can even offer full financing packages, including C-PACE, and can help you take advantage of all available incentives to eliminate upfront costs. Contact us today.