[Update: NYC’s proposed updates to LL97 referenced in this blog post took effect on January 1, 2024. For more information, visit New York City’s LL97 webpage or contact us.]

New York City Local Law 97 (LL97) is designed to drive deep emissions reductions in NYC buildings over 25,000 square feet in size. The emissions tracking requirements begin in 2024, with much stricter standards taking effect in 2030. The ultimate goal is for buildings covered by the law to be effectively emissions free by 2050.

Emissions reports are required to be filed every year, with the first report due by May 1, 2025, for 2024. Failure to file can result in a fine of $0.50 per gross square foot for each month a property is late with the report. While a grace period of up to 60 days is available, failure to issue a report by day 60 will result in a  penalty that is calculated from day one. The fine for emissions that exceed a building’s emissions limit is $268 per ton.

Recently, the NYC Department of Buildings (DOB) proposed several updates to the law. The proposed changes were discussed at a public hearing on October 24, 2023, during which various parties offered their comments. Assuming the updates are approved, it is expected that the law will go into effect on January 1, 2024. 

The updates are centered on four main areas: how a property owner can mitigate any fines it would otherwise be subject to, limitations on renewable energy certificates, how a property can earn credits for meeting annual emissions standards ahead of schedule, and emissions calculations for fuel cell systems, among other things.

Fine Mitigation with “Good Faith Efforts” for 2024 - 2029

Mitigation of any fines, and potentially fine elimination, may be possible when a building owner can prove they have made “Good Faith Efforts” in trying to meet the building’s emission requirements. The mitigation process described below is very strict and only available for the initial 5 year period of LL97 - 2024-2029. Any fine mitigation plans developed beyond 2029 will be subject to a future set of guidelines. 

The first step a property owner must take is proving that they are currently compliant with NYC energy benchmarking (LL84), audit (LL87) and lighting (LL88) regulations (though in the case of the lighting requirement, owners have until 2025). Also, all commercial tenant spaces over 5,000 square feet must be submetered. 

If those requirements have been met, owners can then submit a plan by May 1, 2025 detailing how they will meet emissions requirements and what has been done to date to attempt to meet the requirements. Owners must calculate what the expected emissions reductions will be, provide contracts for services and equipment, and show that they will be in compliance by May 1, 2027.

Building owners will also need to demonstrate what actions they are already taking to ensure they will meet 2030 requirements. Specifically, work applications that have been approved by the NYC DOB for actions owners are taking to meet the 2030 carbon limit must be on file with the DOB by 2028. 

If owners do not meet the due dates outlined in any plan that is approved by the NYC DOB, applicable  fines will be calculated from the original due dates.

Renewable Energy Certificate Limits

While renewable energy certificates (RECs) may otherwise be used to help in meeting the emissions limit of a property, RECs may not be used by buildings participating in the fine mitigation process.

Beneficial Electrification Credits

One of the new features that has been proposed is ‘Beneficial Electrification,’ which provides credits towards meeting future building emission requirements if approved high efficiency heating, cooling, and domestic hot water equipment is installed. The installation of such systems will result in credits being applied to the electricity consumed if the equipment is installed before 2030, with higher credits available if it’s installed before 2026. These credits can be applied to emissions limits applicable in the future.

Emissions Calculations for Fuel Cells

For properties that have natural gas fuel cells and systems beginning operation on or after January 19, 2023, a specific emissions calculation has been added. Units that came online before then must use the same basic natural gas emissions factor provided in the law that any gas-powered device must use.  

Other Updates

For officially designated affordable housing properties and for houses of worship, clarifying guidance has been provided under Article 321 of the law. In particular, maximum fines are greatly reduced, with the maximum now set at $10,000 over the review period. Properties that do not fall into those two categories could potentially incur fines of hundreds of thousands of dollars, if not millions.

The proposed updates also state that distributed generation systems must be separately metered to ensure proper accounting.

As the City has said since the law’s introduction, the purpose of LL97 is not to generate income for the city, but rather to reduce (and eventually eliminate) applicable building emissions, the largest source of emissions in NYC, by 2050. They argue LL97 is already having the desired effect: the percentage of buildings that would not pass the 2024-29 requirements today is less than it was three years ago, thanks to those buildings implementing simple actions that have allowed them to meet those requirements.

Progress is being made, and we’ll continue to follow updates in the future.