As you have probably seen in the news, New York City Council passed their own “Green New Deal” in late April that includes a number of environmentally focused initiatives. The piece of the “deal” that impacts building owners most directly, Intro 1253, is a complex law that creates carbon emissions limits for most buildings over 25,000 square feet and alternative compliance paths for certain types of buildings.

On May 18th Intro 1253 was passed into law as Local Law 97 of 2019.

This law, the most ambitious in the world to tackle emissions from existing buildings, impacts over 57,000 buildings across the city with the goal of reducing building-based emissions 40% by 2030 from a 2005 baseline.

What does it require and when?

Local Law 97 sets detailed requirements for two initial compliance periods: 2024-2029 and 2030-2034 and requires the City to clarify the requirements for future periods through 2050. Buildings over 25,000 gross square feet must meet annual whole-building carbon intensity limits during each compliance period based on building type or prorated for mixed-use buildings. Certain building types including city-owned buildings, affordable housing, hospitals and houses of worship will have alternative compliance options if they cannot hit the carbon intensity limits. To comply, building owners must submit an emissions intensity report stamped by a registered design professional every year starting in 2025 or pay substantial fines.

Carbon emissions intensity limits by building/space type

What happens if I don’t comply?

The City has set steep fines for buildings that do not comply. Buildings must pay $268 per metric ton that their carbon footprint exceeds the limit, annually.  There are also fines for not submitting a report and for submitting a false report.

How does my building emit carbon?

At first glance many may ask how does a building even emit carbon dioxide? Does one need to bring some “carbon meter” to the building to measure carbon emissions.  As most of you know, that is not how building-based carbon emissions are measured.

Carbon emissions, or the “carbon footprint” of a building is measured by totaling the carbon dioxide emitted into the atmosphere during the production of the energy that is consumed by a building to heat, cool, light and power the activities of its occupants.  These emissions are typically the result of fuel combustion and can occur on-site as a result of an oil or gas boiler or off-site at a power plant that burns natural gas to generate electricity. The carbon emissions intensity limits set by Local Law 97 include onsite and offsite emissions in a single limit so reductions in lighting, heating, cooling and plug loads all contribute to reaching the goals. 

How do I measure my building’s carbon intensity and know if it’s in compliance?

This is actually more complicated than you would think.  The US EPA’s free Energy Star Portfolio Manager tool is a good place to start.  All buildings over 25,000 square feet should have submitted their Energy Star Benchmarking data to the City by May 1, 2019 for Local Law 84 compliance. Energy Star Portfolio Manager, the tool required by the City for building owners to store and submit energy data for LL84, is able to convert a building’s energy use into carbon emissions.  However, it should be noted that the emissions displayed in Energy Star is slightly different from how it will be measured by Local Law 97, but it is a good starting place to see how your building compares to the 2024 and 2030 limits. Just make sure you are using the same units. Energy Star typically displays emissions in kilograms of carbon dioxide equivalent (KgCO2e) and the law lists the limits in metric tons of carbon dioxide equivalent (mtCO2e).

Once you’ve found your total carbon emissions in Portfolio Manager, you’ll need to calculate your carbon emissions limit to find out if you comply or not. To calculate your emissions limit, find your type of building in the table above and multiply the limit by the gross square footage of your building. This is the carbon emissions limit for each compliance period. If your total is higher than the limit, you are not in compliance. To calculate your annual fine, first convert your building’s carbon footprint from Kg to metric tons by dividing by 1,000, then multiply the difference between the limit and your actual carbon footprint by $268.  If this sounds too complicated, call an expert like CodeGreen for help.  

How does this impact a typical commercial building?

The 2024 and 2030 emissions intensity limits were set to impact the worst 20% and worst 75% of carbon emitters respectively, so statistically, an average building will meet the initial 2024 requirements, but will need to reduce emissions to meet the more stringent 2030 limits.  But that doesn’t mean that building owners can sit back and do nothing for ten years.  Identifying and implementing energy upgrades is a multi-year process, and even if you plan to sell the building before 2030, buyers will start to bake in the costs associated with meeting the emissions limits, so building owners should start planning for compliance now.

How do I reduce my carbon emissions and prepare for compliance?

While there are still a number of details to be worked out within the law, all buildings should start developing long-term energy and carbon reduction strategies today to meet or exceed the emissions performance targets.  This process takes time and to be successful, requires input from numerous stakeholders including internal and external experts, tenants, building operations, ownership and management. 

A proper energy and carbon management plan should evaluate all potential energy and carbon reduction initiatives in the near, medium, and long term:

• Base building HVAC

• Common area lighting

• Sensors and controls

• Tenant lighting, plug loads and HVAC

• Retail and ground-floor tenants

• Operator and occupant training

If you are completing or recently completed your Local Law 87 energy audits, that can be a good place to start. If you haven’t started Local Law 87 yet, ask your provider to consider longer-term energy savings strategies in their analysis even if it expands the scope or cost of the energy audit. It’s worth it since your LL87 provider will already be analyzing your systems looking for energy saving opportunities.

What about my tenants? They represent at least 50% of my building’s energy use?

Tenant energy consumption plays a big role in overall energy use and therefore also represents a huge opportunity for savings.  Reducing your building’s overall energy and carbon intensity will not be possible without collaboration with your tenants. Meet with tenants to discuss energy efficiency when they are moving in and building out their spaces.  Also meet with existing tenants to discuss energy upgrades that can be performed mid-lease that could lower their energy bills.  NYSERDA has an incentive program, the Commercial Tenant Program, that will pay for some or all of the cost of identifying energy reduction opportunities in new and existing tenants’ spaces. CodeGreen is an approved vendor for the CTP and we’re happy to discuss providing these services to your tenants.  

It seems like there are lot of details that still need to be worked out. Should I just wait until more info is released before doing anything?

Don’t wait. Especially if you’re above the 2024 limits. Building owners should get started now, at least with developing a plan.  It is true that the City will be issuing rules and additional studies on their approach to carbon trading, peak demand, renewable energy credits and carbon offsets among other items, but none of these negate the value of reducing energy waste in your building. You don’t need to undertake massive projects right away, but you should engage a professional and start creating a long-term plan. If you have a responsible long-term energy/carbon reduction plan you will be able to fold in the various rules and adjustments as they are issued by the City, but many of these issues won’t be resolved until 2023, which is too long to wait if you need to make changes for 2024 compliance.

So get started now. Talk to your in-house engineer or call an expert like CodeGreen to help you develop a strategic compliance plan.  

Contact us for more info on how this law will impact your portfolio