Understanding NYC's groundbreaking climate law, why it was created, and how to prepare your building for increasingly strict carbon emission limits through 2050.
Local Law 97, enacted in 2019 as part of the Climate Mobilization Act, establishes carbon emission limits for buildings over 25,000 square feet—covering approximately 50,000 buildings in NYC. It is one of the most ambitious climate policies in the United States, requiring the city's largest buildings to dramatically reduce global warming emissions. The law sets specific emission intensity limits (measured in kilograms of CO2 equivalent per square foot per year) that buildings cannot exceed. These limits become progressively stricter over time, with major reductions required by 2030, 2035, and continuing through 2050. Buildings that exceed their limits face substantial annual penalties.
Unlike in many cities where transportation dominates emissions, New York's dense building stock and extreme climate (very hot summers, cold winters requiring heavy heating) make buildings the primary culprit for climate action. Local Law 97 was created to address the climate crisis by targeting the largest contributors to emissions. The law aligns with New York City's commitment to reduce greenhouse gas emissions 80% by 2050 (known as 80x50) and ultimately achieve carbon neutrality. Without dramatic action on building emissions, the city cannot meet its climate goals.
The law also recognizes that climate change poses severe risks to New York City—from sea level rise threatening coastal areas, to extreme weather events like Hurricane Sandy causing billions in damage. By reducing emissions now, the city aims to mitigate future climate impacts while positioning itself as a global leader in urban climate action.
Covered buildings: Properties over 25,000 gross square feet, including:
Local Law 97 phases in gradually, giving building owners time to plan and implement energy efficiency improvements. However, the limits become significantly stricter over time.
Buildings must meet initial emission limits based on building type and occupancy. Annual reporting required by May for each year showing total emissions and compliance status. Penalties begin for buildings exceeding limits in 2024.
These initial limits are achievable for many buildings with no major upgrades, but buildings with older, inefficient systems or those relying heavily on fossil fuels will need to make improvements.
Dramatically stricter limits take effect January 1, 2030. These limits represent approximately a 43% reduction from 2005 baseline levels. Most buildings will need significant energy efficiency upgrades to comply. The 2030 limits are where Local Law 97 "gets real"—very few buildings can meet them without substantial investment.
Buildings should begin planning for 2030 compliance now. Waiting until 2029 means rushed decisions, higher costs, and potential inability to complete necessary work in time.
Further reductions required as the city continues toward 80% reduction by 2050. Specific limits to be determined but will be even lower than 2030-2034 period.
Approaching near-zero emissions, relying primarily on the city's grid for carbon neutrality. Buildings will need to be nearly entirely electric or use carbon-neutral energy sources.
NYC aims for 80% reduction in greenhouse gas emissions from 2005 levels, with a pathway toward full carbon neutrality by beyond 2050.
Many building owners focus only on the current 2024-2029 limits, which are relatively achievable. But the 2030 limits represent a massive jump in stringency. Buildings that barely comply in 2029 will face huge penalties starting in 2030 without a major improvement. You need to plan for 2030 compliance now, not in 2029.
Local Law 97 sets building emission intensity limits measured in kilograms of carbon dioxide equivalent per square foot per year (kgCO2e/sf/year). Each building type has different limits based on typical energy use patterns.
| Building Type | Occupancy Group | Limit (kgCO2e/sf/year) |
|---|---|---|
| Multifamily Housing | Group R-2 | 6.75 |
| Office Buildings | Group B | 8.47 |
| Hotels | Group R-1 | 9.87 |
| Retail | Group M | 11.38 |
| Assembly (theaters, etc.) | Group A | 10.04 |
| Building Type | Occupancy Group | Limit (kgCO2e/sf/year) |
|---|---|---|
| Multifamily Housing | Group R-2 | 4.07 |
| Office Buildings | Group B | 4.89 |
| Hotels | Group R-1 | 5.51 |
| Retail | Group M | 6.33 |
| Assembly (theaters, etc.) | Group A | 5.60 |
Note the dramatic decrease from 2024-2029 to 2030-2034. For example, multifamily buildings drop from 6.75 to 4.07 kgCO2e/sf/year—a 40% reduction. This is why most buildings will need significant retrofits.
Buildings with multiple occupancy types (e.g., ground floor retail with residential above) have limits calculated proportionally based on the square footage of each use. The emission limit is the weighted average of all occupancy types in your building.
Every covered building must calculate and report its annual carbon emissions based on energy consumption. This is not an estimate—it's based on your actual utility bills.
The calculation includes all energy used in your building:
All covered buildings must file an annual emissions report by May 1st through the NYC Department of Buildings online portal. The report must be prepared by one of the following:
The report includes your building's total emissions, your emission limit, whether you're in compliance, and any compliance strategies you are using (e.g., renewable energy credits or building improvements).
Local Law 97 has real financial teeth. Buildings that exceed their emission limits face substantial annual penalties that can quickly exceed the cost of compliance measures.
$268 per metric ton of CO2e over the limit (adjusts annually for inflation). This penalty applies every year you exceed your limit.
Many building owners discover that five years of penalties can more than pay for energy efficiency upgrades needed to achieve compliance. Plus, efficiency upgrades cut operating costs, while penalties are just fees. Investing in compliance usually makes financial sense beyond just avoiding penalties.
Most buildings will need a combination of strategies to meet LL97 limits, especially the stricter 2030 requirements. The right approach depends on your building's specific characteristics, current systems, and budget.
These are the foundation of most compliance strategies:
Local Law 97 provides some flexibility beyond just reducing building emissions.
Buildings can purchase RECs to offset some emissions. However, there are strict limits—RECs can only offset up to 10% of your emission limit. This means RECs alone cannot achieve full compliance; you must still reduce actual building emissions significantly.
Solar panels on your roof or other on-site renewable generation directly reduce your building's grid electricity use and associated emissions. For buildings with suitable roof space, solar can be highly cost-effective, especially with available tax credits and incentives.
In limited cases, buildings can invest in qualified offset projects. However, regulations are strict and this is not a primary compliance strategy for most buildings.
We help buildings develop comprehensive compliance strategies that balance immediate needs with long-term goals. Our process includes:
Our CFO-level financial expertise ensures you understand the full picture—not just project costs, but energy savings, penalty avoidance, property value impacts, and financing options. We help you make informed decisions that protect your investment.
Official Local Law 97 page