In 2019, Local Law 97 was put in place to lower carbon emissions in commercial spaces. Not making the necessary energy efficiency upgrades can negatively impact a company’s finances — especially those that are non-compliant with the new laws.
This is why understanding what Local Law 97 is, why it was introduced, and how your business can adapt is imperative. With climate change serving as a focal point for future legislation, it’s best to be prepared today so your business can ultimately stay afloat financially and acclimate to a greener future.
What is Local Law 97?
Local Law 97 is an all-encompassing piece of legislation aimed at reducing the carbon footprint of commercial buildings in New York City. Introduced in 2019 as a part of the Climate Mobilization Act, Local Law 97 seeks to have businesses partake in greener practices by the year 2050.
According to NYC.gov, this law aims for buildings over 25,000 square feet (with a handful of exceptions), as well as multiple buildings on the same tax lot exceeding 50,000 square feet. With Local Law 97, businesses are required to cut greenhouse gas emissions and meet new energy efficiency standards, which grow increasingly stringent every five years.
Jaros, Baum & Bolles notes that the first stage of Local Law 97, which lasts from 2024 to 2029, targets the worst 20% of offenders. The second stage, which runs from 2030 to 2034, however, should have building owners on their toes, as the tolerance for greenhouse gas emissions drastically decreases while penalties increase. The same precept follows through for stage three in 2035 to 2040, so on and so forth.
To keep track of emissions, building owners will be required to submit an emission intensity report to the Department of Buildings by May 1, 2025, and every May 1 that follows.
Making Sure Your Building is Compliant with Local Law 97
With Local Law 97, your building will be tasked with placing limits on your greenhouse gas emissions. These, in turn, will be calculated by tonnes of carbon dioxide equivalent (tCO2e) per square foot.
To lower emissions produced by your building and remain compliant with the law, it will most likely impact your company’s finances. To remain compliant, there are several things you can do.
You can consider installing solar panels, which will harness the power of the sun while being less taxing on the environment. You can also invest in better insulation for your building to reduce emissions caused by running your air conditioning throughout the summer. It’s also equally important to upgrade your HVAC system to maximize its output.
NYC.gov provides a list of carbon emissions limits for each occupancy in accordance with Local Law 97. To calculate your emissions limit, find the occupancy group under which your building falls and multiply your building’s square footage by the appropriate tCO2e/sf provided. Building Energy Exchange also provides a useful calculator to estimate potential penalties.
What Happens in the Case of Non-Compliance?
Local Law 97 is an aggressive piece of legislation that takes aim at a building’s finances shall they be non-compliant with the new laws. When the law goes into effect in 2025, non-compliant businesses will be hit with hefty fees.
According to New York Engineers, building owners can expect to pay $268 per every tCO2e emitted that exceeds the limit. So, hypothetically speaking, if your building is emitting 50 tCO2e, multiply that by $268/t and you’ll be paying $13,400 every year (and that’s on the frugal side).
On top of that, if you’re planning on selling your building without modernizing it, that will be factored into your receiving price. Shelling out the money upfront to upgrade your systems will undoubtedly prove fruitful in the long run for your building and business.
How Donnelly Can Help Your Business Comply with Local Law 97
At Donnelly Mechanical, we understand the financial stress Local Law 97 can put on a business. This legislation creates a mix of opportunities and risks to address. Given the hefty fines associated with noncompliance, building owners and managers are under pressure to understand these new requirements and what actions they must take to comply.
Our team can help guide you through the complexities of Local Law 97, whether you need help with your comprehensive LL97 strategy or are simply looking to upgrade your HVAC systems. To learn more about how Donnelly can help your business comply with Local Law 97, please visit our website and contact us today!
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