Image by Leonhard Niederwimmer

New York City has launched one of the world’s strictest crackdowns on building emissions called Local Law 97 (LL97). Here’s how it works. 

First announced in 2019, LL97 is still being fine-tuned, but is essentially a carbon cap and trade system for buildings larger than 25,000 square feet (2322.58 square metres), with some exceptions, that will come into effect in 2024, with more buildings included in 2030.

As part of mayor Bill de Blasio’s plan to make New York City net zero by 2050, LL97’s overarching aim is to cut building emissions by 80 per cent, which means significant reductions for building owners and managers. 

Su-Fern Tan, who sits on the LL97 technical advisory board and recently joined CBRE as national director ESG in Australia, told The Fifth Estate the laws had essentially taken the city from nothing, in terms of emissions targets, to the most stringent in the world. 

“It’s not just a target — if you don’t meet it, you’re going to get fined. So, lots of buildings in the city are facing huge financial impact if they don’t get their act together and reduce carbon emissions,” Ms Tan said. 

Limits taking effect from 2024 will apply to the most carbon intensive 20 per cent of buildings, and from 2030 to the 75 per cent most carbon intensive of building stock, with the bottom 25 per cent falling beneath the cap. 

Emissions caps will be based on metric tons of CO2e per square foot which will differ across 10 different building categories.

Building managers can receive up to a 100 per cent deduction on their annual emissions by purchasing renewable energy, or up to a 10 per cent deduction through the purchasing of offsets or by implementing peak energy storage.

The city will also develop a carbon trading scheme whereby buildings that reduce emissions below their limits would be able to trade the carbon savings with other buildings that are unable to do so.

Failure to comply will draw heavy fines from regulators with the maximum annual penalty calculated as the difference between a building’s annual emissions limit and its actual emissions multiplied by $268, which for some could end up in the millions of dollars. 

First compliance reports are due on 1 May 2025.

A new organisation, the Office of Building Energy and Emissions Performance, has been established within the NYC Department of Buildings to oversee implementation of the law and to manage the LL97 Advisory Board.

As one of those charged with implementing the laws, Ms Tan said the biggest challenges included the affordability of capital upgrades, reducing and eliminating dependence on gas and steam and electric grid capacity.

She added that, “there needs to be a whole shift in the mindset of building operators in how they run their buildings.”

“Instead of a ‘make sure everything runs smoothly’ approach, the approach should be ‘make sure everything runs smoothly AND uses the least amount of resources as possible’.”

Considering the breadth of opportunities that exist out there for creating better operating buildings, Ms Tan said the rest of the world should be watching closely and taking similar action. 

“One might say we could go even further with the right programs, incentives and financing models in place, especially for non-commercial buildings.” 

To help building managers cut emissions, low-interest loans are available through a new Property Assessed Clean Energy (PACE) program to finance energy efficiency and green energy. The city’s Retrofit Accelerator program has also been expanded. 

Government buildings have their own carbon targets, aiming for 40 percent emissions reductions by 2025 and 50 percent by 2030 and adjustments are available for hospitals and healthcare facilities.

Earlier this month the Department of Buildings stated that energy used to charge plug-in EVs  will not be included in emissions from buildings under LL97.

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