New York City’s Buildings Department has been laying the groundwork for the implementation of Local Law 97, a law that is designed to significantly reduce the use of natural gas and other fossil fuels in buildings larger than 25,000 square feet. The law is set to come into effect in 2024, and it is expected to become even stricter by 2030.
Local Law 97 mandates that large buildings must undergo energy efficiency retrofits, which are designed to lower carbon emissions. Additionally, these buildings are required to submit annual emissions reports. Failure to comply with these mandates will result in penalties. It’s estimated that this law will impact around 50,000 buildings throughout the city.
However, the law does offer a grace period for those who are making a “good-faith effort” towards decarbonization. Building owners will be given an additional 18-month grace period to comply, starting January 1, 2024.
Interestingly, the law does not cap the purchase of “renewable energy credits.” This allows building owners to avoid penalties by investing in renewable energy. However, this policy has faced criticism from some quarters as it is perceived as a loophole that allows building owners to avoid compliance.
Several environmental groups have argued that the rules favor the real estate industry as they allow building owners to delay or even avoid making significant pollution reductions. These groups are urging the incoming Mayor and Council to address these issues.
The rules for Local Law 97 also permit building owners to avoid fines until 2026 if they show efforts to reduce their outputs. This includes submitting a “decarbonization plan” by May 2025.
Critics of the law argue that it does not set stricter limits on Renewable Energy Credits. This, they claim, allows property owners to achieve compliance without making efficiency upgrades.
However, there are also those who applaud the final rules for striking a balance between the law’s environmental objectives and providing flexibility to property owners. The regulations offer a “Beneficial Electrification credit” to owners who make the transition from fossil fuel systems to electric energy. This is seen as a positive step towards achieving the city’s green energy goals.
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