What does Local Law 97 do?
Local Law 97 sets limits for the allowed GHG emissions for nearly 60,000 buildings that have a total floor space of over 25,000 square feet across multiple building occupancy categories in New York City. To accomplish this goal, the city will begin applying fines to every covered building that exceeds the limits set under Local Law 97 starting in 2024. These fines are calculated by comparing the metric tons of CO2e (carbon dioxide equivalent) per square foot allowed under Local Law 97 for each specific occupancy category to the amount of CO2e produced through the building’s consumption of energy and a penalty of $268 will be applied for each metric ton of CO2e over the city’s limit. For example, if your building’s uses 10,000 metric tons of CO2e over the maximum limit for your building occupancy category annually, your building would face a yearly penalty of $2,680,000.
Exemptions to the Law
Some buildings are exempt from fines under Local Law 97. These apply to those buildings significantly comprised (more than 20%) of rent controlled or rent stabilized units, those used by religious organizations, those used for the generation of electric power or steam, those organized under article 2 of the private housing finance (Mitchell Lama) law and those owned by the city. However, it is likely that planned changes to this law will further restrict these exceptions.
Non-Compliancy and Penalties
The fines under Local Law 97 are based on the total GHG emissions resulting from the total energy consumption of the entire building. This includes both owner (base building) and tenant usage. Each fine will be issued only to the owner of the building and not imposed onto tenants or unit owners directly despite their being responsible for their respective energy usage and the associated. As such, it is the building owner who is responsible for paying this fine and the building owner who is responsible for addressing the energy consumption that is the root cause of the fine.
Under Local Law 97 each type of energy is treated differently, and this difference is due to the amount of GHG emissions produced by each type. Electricity, natural gas, fuel oil and district steam have a unique emission coefficient, meaning that some energy types are “cleaner” and will result in lower GHG emissions and fines than other types of energy. For example, take two identical buildings that use the exact same amount of energy, but one uses naturel gas while the other uses fuel oil. The building using natural gas will produce lower amounts of GHG emissions and have a lower fine liability than the one using fuel oil. This is because creates fewer GHG emissions than fuel oil, and thus, a smaller fine.
The exact fine your building will face under Local Law 97 is determined by calculating total amount of GHS emissions resulting from your buildings energy use that is more than the limit for its specific occupancy category. The total amount of emissions produced in your building is determined according to designated greenhouse gas coefficients for each fuel type. The total amount of each type of fuel used in your building is multiplied by its corresponding coefficient and the results are summed to calculate the total of greenhouse gas produced in tons (tCO2e). This number (tCO2e) is then divided by the building’s total square footage, resulting in the buildings total greenhouse gas produced per square foot (tCO2e/sqft).
The table below details the 2024 to 2029 and 2030 to 2034 carbon emissions limits for all occupancy groups under Local Law 97 in metric tons of carbon dioxide equivalent (CO2e).
Building Emission Limits
The most common occupancy groups in New York City are Occupancy Group R-2 which includes apartments, Occupancy Group B which includes offices and Occupancy Group R-1 which includes hotels.
Local Law 97 Challenges
The challenge for building owners under Local Law 97 is to reduce their building’s energy consumption and keep their building’s emissions below the limits set by Local Law 97. The first and most important step is knowing the amount of energy and what types of energy is used in your building, how efficiently your building uses energy and how to identify what options are available to optimize your building’s energy usage. The best and most direct wat to address this challenge is through energy efficiency and early planning will result in a much easier decision-making process, with more available options and will directly relate to a better result.
It’s important to follow changing local and state laws related to building requirements. Further details regarding emissions limits, as well as information on buildings that are exempt from Local Law 97 requirements can be found at the Department of Buildings (DOB) Greenhouse Gas Emission Reporting website.
