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What does NYC’s Local Law 97 really mean for you? Let's dive in.

In this post, you’ll learn:

The basics of Local Law 97
The timeline for Local Law 97
How to calculate your building’s emissions limit
What penalties can your building incur
What deductions are available
Steps to comply with Local Law 97
How Jules can help you comply with Local Law 97

Introduction

Real estate accounts for nearly 40% of U.S. emissions, making it a key target for decarbonization. In the case of NYC, real estate accounts for over two-thirds of emissions. To combat this, cities globally are implementing local regulations that mandate building owners to report and cut operational emissions

NYC’s Local Law 97 is a leading initiative in this area, aiming to reshape how building owners and property managers in the city operate their buildings. This guide is designed to demystify LL97, assisting property stakeholders in maintaining compliance and promoting a more sustainable city.

Local Law 97 is a key element of the 2019 Climate Mobilization Act passed by the city of New York. The legislation mandates that buildings improve energy performance and cut down on greenhouse gas emissions.

The law imposes carbon limits on buildings exceeding 25,000 square feet or multiple buildings on the same tax lot exceeding 50,000 square feet combined, impacting around 50,000 NYC properties. Local Law 97 sets definite greenhouse gas emission limits, which become progressively stringent, especially in milestone years like 2024 and 2030. By 2050, all buildings must achieve zero emissions.

The law requires annual building emissions reports, guided by city standards. Fines for non-compliance are based on set emissions limits. However, there are several types of buildings that have alternative pathways for compliance. These include:

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An industrial facility primarily used for the generation of electric power or steam.
Multifamily residences which do not exceed three stories, which are owned and maintained by each individual dwelling unit owner, with no central HVAC system or hot water heating system serving more than 25,000 Square Feet.
New York City government owned buildings.
A housing development or building on land owned by the New York City Housing Authority (NYCHA).
Rent regulated accommodations with more than 35% rent-regulated dwelling units.
A building whose main use or dominant occupancy is classified as occupancy group A-3 religious house of worship.
Buildings owned by a housing development fund company.
Buildings that participate in a project-based Federal housing program.

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To find out which buildings must comply with LL97, consult the Department of Buildings' list of covered buildings here.

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Timeline for LL97

Local Law 97 establishes a phased timeline requiring large buildings to meet specific greenhouse gas emissions caps. Starting from 2024 and extending to 2050, the law sets progressively stricter emissions reduction targets, marking pivotal milestones in 2030 and 2040. The law’s important milestones are the following:

January 2024:The compliance period for 2024 kicks off, requiring affected buildings to adhere to the established emissions caps for the years spanning 2024 to 2029.
May 2025: The inaugural compliance report must be submitted by May 1st, an annual deadline moving forward. These reports will outline each building's emissions and indicate if they have stayed within their designated caps.
January 2030: The next compliance cycle starts, imposing tighter emission restrictions on covered buildings for the years 2030 to 2034.
2030 - 2035: The carbon coefficient for electricity is adjusted for electricity taking into account projected emissions reductions in New York's electrical grid.
January 2035: The next compliance cycle starts, imposing tighter emissions caps on eligible buildings for the years 2035-2039.
2035 onwards: The carbon coefficient for electricity is adjusted for electricity taking into account projected emissions reductions in New York's electrical grid.
January 2040: A fresh compliance period kicks off, with more stringent emissions restrictions set for qualifying buildings from 2040 to 2049.
January 2050: Starting in 2050, all regulated buildings are required to operate with zero emissions.

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Emissions Limits for Buildings

The emissions limit for a building depends on its size and its designated occupancy group, as categorized by Energy Star's Portfolio Manager. These criteria establish the emissions factor in tCO2e per square foot of building space. These limits will decrease progressively over successive compliance periods to gradually lower the building's carbon footprint.

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Next, let's go through a sample calculation for your building's emissions limit. Assume you own a Multifamily Housing building covering 50,000 sq ft. To determine the emissions limit for the 2024-2029 compliance period, you would use the following formula:

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50,000(Gross Square Footage of the Building) x 0.00675(Emissions Factor for Multifamily Housing) = 337.5 tons of CO2e per year

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The building's annual emissions cap is set at 337.5 tons of CO2e. Exceeding this limit will result in fines.

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For more information on the emissions factor according to building category, review the Department of Building’s guidance here.

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Determining a building’s emissions

Calculating a building's emissions for compliance with NYC's Local Law 97 involves a multi-step process. The primary measure for compliance is the building's carbon emissions per square foot, expressed as metric tons of CO2 equivalent per square foot (tCO2e/sf).

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1. First, you need to gather energy consumption data for your building, which could include electricity, natural gas, steam, and other fuels. This information is often available from utility bills or building management systems.

2. Convert all energy consumption data into the same unit for uniformity, typically in kWh (kiloWatt-hours) for electricity and kBtu for gas. For fuel types(fuel oil, etc) combusted or consumed on premises, emissions should be calculated based on tCO2e per kBtu.

3. Then, multiply the energy use by the relevant emissions factor, which is often provided by the New York City Department of Buildings or other resources. You may review the emissions factor per utility input by checking the Department of Building’s guidance here.

4. These factors convert energy usage into carbon emissions, making it possible to compute the building's total annual emissions.

5. Finally, divide this total by the building's square footage to get your tCO2e/sf. This number must then be compared to the emission limits established by Local Law 97 to determine if the building is in compliance.

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What penalties can I incur?

Failing to comply with NYC's Local Law 97 exposes building owners to substantial fines. The penalties levied are based on three main criteria:

If a building's carbon emissions exceed the mandated limits, a fine of $268 per metric ton of excess carbon dioxide equivalent (CO2e) will be imposed.
There's a penalty for failing to submit a compliance report, which amounts to $0.50 per square foot for each month of delay in filing.
Providing false information in your compliance report carries a severe penalty, with fines reaching up to $500,000.

These fines can accumulate quickly, so understanding your responsibilities and planning accordingly is crucial for avoiding financial repercussions while also contributing to the city's sustainability goals.

Deductions

Local Law 97 offers building owners some flexibility through Renewable Energy Credits (RECs) and greenhouse gas offsets, allowing them to request deductions to their emission limits.

Renewable Energy Certificates: RECs is a market-based instrument you can purchase to prove that a certain amount of electricity you used was generated from renewable sources.The REC should come from a capacity resource located in, or whose output directly sinks into, the zone J load zone for the reporting calendar year. Some projects that comply with this are two renewable energy and transmission projects - Clean Path New York and the Champlain Hudson Power Express which are scheduled to come online in 2027 and 2026 respectively.
Greenhouse Gas Offsets: Greenhouse gas offsets represent the reduction or avoidance of one metric ton of CO2-equivalent emissions from a predetermined baseline. These offsets must be verified by an independent, qualified third party. For calendar years 2024 through 2029, a deduction shall be authorized for up to 10 percent of the annual building emissions limit.
Distributed Energy Resources: A distributed energy resource consists of one or multiple units that generate or store electricity at a single site, connected either directly or indirectly to the electric utility grid. These resources frequently originate from renewable sources and facilitate environmentally-friendly energy collection, transmission, and storage.

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By purchasing qualifying RECs and greenhouse gas offsets, building owners can effectively reduce their calculated carbon emissions, thereby potentially avoiding or lowering penalties for exceeding Local Law 97's strict emissions limits. However, it's crucial to understand that there are specific guidelines and limitations for using these deductions, and they should be part of a broader strategy for improving building efficiency and reducing emissions.

It’s important to highlight that guidelines around deductions are not finalized and it’s currently being considered by the Department of Buildings, in conjunction with the Local Law 97 Advisory Board.

For more information around deductions from reported annual building emissions, review the provisions established here.

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Steps to comply with LL97

Understanding compliance with Local Law 97 can be a complex task, so here's a step-by-step guide to make the process more manageable for property managers and building owners in New York City:

Step 1: Determine If Your Building is Subject to LL97

The first step is to figure out whether your building falls under the jurisdiction of Local Law 97. Buildings over 25,000 square feet or multiple buildings on the same tax lot with a combined square footage exceeding 50,000 square feet are generally subject to the law.

Step 2: Check for Exemptions

Some types of buildings, like certain city-owned properties, religious institutions, and healthcare facilities, may be exempt. Confirm whether any exemptions apply to your building.

Step 3: Benchmarking

Benchmarking is essentially the process of measuring your building's energy use to understand where you stand. You'll need to collect energy data on your building and calculate its emissions based on factors stipulated in the law. You can use Jules’ free benchmarking tool to streamline this process.

Step 4: Understand Emission Limits and Timelines

Local Law 97 outlines specific carbon emission limits that vary by the type of building and become stricter over time. Familiarize yourself with the limits applicable to your building type and the deadlines you must meet.

Step 5: Identify Decarbonization Opportunities

Once you've gathered your data, use it to identify areas where you can reduce your building's carbon footprint. Look for energy-saving opportunities like upgrading HVAC systems, improving insulation, or installing energy-efficient lighting.

Step 6: Implement Changes

After identifying the most impactful changes, create a plan for implementing these energy-saving measures. This might include seeking out contractors, applying for grants or incentives, and creating a timeline for the work.

Step 7: Report Emissions

You are required to report your building's emissions by May 1st of the year following the compliance period, beginning in 2025 for the 2024 compliance period. Reports must be certified by a registered design professional.

Step 8: Ongoing Monitoring and Adjustment

Compliance isn’t a one-time event. As emission limits become more stringent, ongoing monitoring will be crucial. Continue to track your building's energy use, implement additional energy-saving measures as needed, and adjust your strategies based on performance and changing regulations.

Step 9: Purchase RECs or Offsets if Necessary

If despite your best efforts, your building is still exceeding its allowable emissions, consider purchasing Renewable Energy Credits (RECs) or greenhouse gas offsets as a last resort to avoid penalties.‍

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Step 10: Keep Documentation for Audits

‍Keep all your documentation readily accessible. This includes your energy data, compliance reports, and any records of RECs or offsets purchased. You’ll need these in case of an audit or to prove compliance.

By following these steps, you'll not only contribute to a more sustainable future for New York City but also future-proof your business against rising costs and regulations.

How Jules can help you comply with LL97

Jules simplifies emissions reporting, equipping property managers with the tools to effortlessly track emissions, manage energy use, and seamlessly generate compliance reports in line with Local Law 97.

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Easy Onboarding and Data Tracking

Starting with Jules is as easy as providing basic building details and uploading utility data. This hassle-free onboarding process ensures that property managers can quickly begin to track their energy use and emissions accurately. The platform's utility data upload feature allows for precise monitoring, which is vital for not only compliance but also for understanding where energy efficiencies can be gained.

Simplified Reporting

Compliance with Local Law 97 is complex and time-consuming, requiring careful data collection, emissions calculations, and formal reporting. Jules simplifies this entire process. By automatically generating compliance reports that align with NYC's rigorous criteria, Jules eliminates the need for exhaustive manual data entry and complicated calculations, thereby freeing up valuable time and resources for property managers.

Time-of-Use Electricity Tracking

Jules offers a real-time electricity consumption tracking feature by directly connecting to a building's meter, providing updates in 15-minute intervals. This granular data collection enables the use of the Time of Use methodology, an increasingly important factor in complying with Local Law 97. With this level of insight, building owners and property managers can more accurately monitor and manage their energy use, ultimately facilitating more effective strategies for meeting emissions caps and avoiding penalties.

Reduced Compliance Costs

The platform obviates the need for expensive consultancy fees that could otherwise be incurred when seeking expert help for compliance measures. Its automation capabilities can significantly reduce administrative costs.

By harnessing the capabilities of Jules, property managers and building owners can navigate the intricate landscape of Local Law 97 compliance with ease and confidence.

Your Complete Guide to Local Law 97