What the Fall LL97 Update Means for NYC Buildings

& How to prepare for January 1, 2024

By: David Klatt, COO, Sylvie Binder, Smart Buildings Account Executive

Green roof, Javits Center. Photo: Julienne Schaer (Source: NYC The Official Guide)

On October 6, 2022, the New York City Department of Buildings (DOB) proposed an update to Local Law 97 (LL97), a law within the 2019 Climate Mobilization Act that sets yearly carbon emissions caps on buildings greater than 25,000 sq. ft. This update will assign carbon emissions factors by building type, such that buildings categorized as energy-intensive can emit more carbon relative to other, less inherently energy-intensive types. A smaller carbon emissions factor indicates a smaller annual amount of carbon a building can legally emit before fines begin.

For example, buildings like hospitals, data centers, and grocery stores have a high emissions factor (0.02381 tCO2e/sq. ft.) because they provide an essential public service to the city, whereas hotels have an emissions factor that is half as large (0.00987 tCO2e/sq. ft.). Importantly, one of the lowest and most strict emissions factors has been assigned to multifamily buildings above 25,000 sq. ft. (0.00675 tCO2e/sq. ft.).

This update, like the law itself, has fallen off the radar of many building owners, operators, managers, and occupants in NYC; however, it is critical for these parties to understand LL97 before fines start accruing on January 1, 2024.

Why is the city focused on residential buildings?

Hint: Scope 1 emissions are public enemy #1…

New York City aims to decrease citywide greenhouse gas (GHG) emissions by 40% by 2030 and 80% by 2050. To accomplish this goal, buildings — which account for around 70% of GHG emissions in the city — have been assigned carbon emissions caps via LL97.

These carbon emissions caps apply to Scope 1, Scope 2, and Scope 3 emissions but are most focused on mitigating Scope 1 emissions. Scope 1 emissions come from fuel oil or gas combustion on-site and are often the hardest to address since Scope 1 reductions rely on changing the efficiency and functioning of on-site systems.

What’s more, the DOB has proposed that renewable energy credits (RECs) cannot be used to offset Scope 1 GHG emissions. The rationale: over the long term, it’s harder to reduce carbon emissions when the combustion of fossil fuels is happening in a distributed way across thousands of buildings, whereas electricity and steam production, while potentially still fossil fuel-based, is theoretically easier to swap with a cleaner fuel source.

And what about Scopes 2 and 3 emissions, you may ask?

Scope 2 and 3 emissions are still important to address, but the NYC DOB is clearly indicating that they are less “bad” than Scope 1 emissions because of the state’s widespread efforts going into “greening the grid” by 2x by 2030, mandated by the Climate Leadership and Community Protection Act.

Though not the focus of LL97’s fall update, Scope 2 emissions account for energy consumed on-site but combusted off-site, such as from a power plant, and will further impact the carbon emissions caps designated to buildings. These Scope 2 emissions are important to lessen over time but often depend on actions taken by utilities outside the multifamily building operator’s control. Interestingly, Scope 3 emissions, such as resident electricity usage, will also be counted in the LL97 carbon emissions caps, so buildings should ultimately think holistically about their entire block-and-lot energy patterns.

The Impact on Multifamily Buildings

The fact that this LL97 update targets Scope 1 emissions is critical for building residents, owners, and operators to know about — especially stakeholders in multifamily buildings. Over the next 10 years, multifamily buildings could be greatly impacted by LL97 for a few reasons:

Thinking Proactively

With limited resources and energy expertise, lowering emissions and energy usage is a daunting task for some multifamily buildings. Regardless of resource availability, the first step that all buildings should take before January 2024 is to begin actively tracking their building-level carbon emissions beyond looking backward at monthly utility bills.

Con Edison just completed a 5-year, $2 billion infrastructure upgrade that installed new smart electric and gas meters in every building in NYC, unlocking close to real-time energy usage data for buildings to track and dynamically manage. This infrastructure update allows buildings, for the first time, to understand and take control of their energy usage before penalties begin.

Beyond the January 2024 compliance period, buildings should seriously begin major capital planning, building improvement projects, and fuel switch the building’s heating source from oil or gas to electricity. Electrification of every building in NYC is LL97’s ultimate goal.

The Secret Weapon to LL97 Compliance: Building Managers

The path to improving energy behavior beyond the 2024 LL97 compliance period lies in building managers. Building managers provide a largely untapped resource for buildings to lower carbon emissions when LL97 carbon penalties are in full force.

With deep knowledge of building systems and energy use, they amount to a treasure trove of information regarding the building’s health and functioning. Logical Buildings’ SVP of Engineering Services, Michael Repetti, believes that “building engineers and staff are vital in any building for energy savings and carbon reduction. They are the ‘boots on the ground’ that implement building protocols during times of high carbon intensity.” Put simply, building managers are the key to LL97 compliance.

But how can buildings best connect with and draw on their building managers for help? We have recommendations for management teams to address their unique set of energy system obstacles:

Tap into the existing reservoir of building knowledge

Closing thoughts

At the end of the day, energy efficiency improvements aren’t just about investing in new, fancy technologies. Energy efficiency is a holistic approach to sustainable growth in NYC, improving quality of life, lowering carbon emissions and energy bills, and now, mitigating the effects of local legislation penalties. This approach must involve investing in building operations, not just new building systems.

If empowered through the right set of incentives and easy-to-use data analytics tools, building managers can be the city’s finest climate leaders. The key is to tap into the collective knowledge of individuals already on the front lines of building operations.

Have any questions about our energy recommendations? Reach out to us at learn@logicalbuildings.com

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