New York Local Law 97: What You Need to Know to Optimize Your HVAC System

Local Law 97 calls for compliance starting in 2024 — failing to comply costs more than understanding how to minimize your building energy consumption.

Understanding Local Law 97

In New York City, buildings account for approximately 2/3 of greenhouse gas emissions and produced roughly 35.2 M tons of CO2 in 2021. With climate change on the rise, many cities worldwide are mobilizing efforts for carbon drawdown. 

In 2019, the New York City Council passed legislation intended to be New York's own "Green New Deal"—the Climate Mobilization Act (CMA) aligns with the city's 1.5°C Climate Action Plan. This plan represents New York City’s commitment to reduce carbon emissions to targets presented in the Paris Agreement, pledging the city to carbon neutrality by 2050.

This article will explain what this law means, who is impacted, and how you can optimize your cooling costs in line with the legislation.

What is Local Law 97?

Pivotal to New York City's carbon reduction efforts is Local Law 97. This law, a first of its kind, places emission limits on the city's large buildings, both commercial and residential. LL 97 sets out energy efficiency requirements intended to reduce carbon emissions and help the city achieve its goal of cutting all greenhouse gas emissions by 40% in 2030 and 80% citywide by 2050.

What are Local 97 Requirements?

Local Law 97 sets out a methodology for calculating carbon emissions limits for each building in New York City. There are two phases to LL97 and the law details requirements for two periods starting in 2024-2029 and 2030-2034, requirements for 2034-2050 await.

In line with LL97, all buildings over 25,000 square feet in total floor area and two or more buildings on the same tax lot that together exceed 50,000 square feet (including condominiums and cooperatives) must meet the minimum carbon emission set out by the CMA.

The first set of requirements outlined for 2024-2030 specifies rigid compliance limits set out to target NYC buildings with the highest carbon emission levels and are designed to tackle a 40% carbon reduction.

What Does LL 97 Mean for NYC Building Owners?

Local Law 97 of 2019 requires buildings larger than 25,000 square feet to meet minimum energy performance standards by 2024, with stricter targets set for 2030. 

To NYC building owners, LL 97 means completing energy efficiency upgrades—such as replacing old boilers or equipment like chillers or air conditioning systems—that optimize the company’s cooling costs and decrease the building’s carbon footprint. With advancements in technology, there are also more innovative ways building owners can reduce their carbon emissions, such as by optimizing their cooling towers or HVAC systems which we'll get into below.

Beginning May 1, 2025, building owners will be required to fill out and submit a report stating their compliance with emission limits in New York. These reports will need to be certified by a registered design professional and will be monitored by the Office of Building Energy and Emissions Performance (OBEEP).

What Buildings Does Local Law 97 Cover? 

Local Law 97 covers approximately 40,000 buildings including:  

  • Buildings exceeding 25,000 square ft;
  • Two or more buildings on the same lot exceeding 50,000 square ft together;
  • Two or more condominium buildings governed by the same board of managers exceeding 50,000 square ft together. 

LL97 also includes alternative compliance methods for some buildings that would fall under the above definition. Buildings with alternative compliance methods to LL97 include:

  • New Your City government-owned buildings
  • Religious places of worship
  • Nonprofit hospitals and healthcare facilities
  • Industrial buildings primarily used to generate power or steam
  • Rent-regulated housing
  • Housing owned by the NYC Housing Authority
  • Federal housing program buildings
  • Multi-family dwellings of 3 stories or less with no central HVAC
  • Housing Development Fund Corporation (HDFC) properties

What Are The Penalties for Not Complying With Local Law 97?

According to NYC Sustainable Buildings, starting in 2025, an owner of a building who submits reports of their building exceeding annual building carbon emissions will be liable for a civil penalty equal to the difference between building emissions for that timeframe and the emissions for that year.

The New York City council estimates that 20-25% of buildings will exceed their emission limits in 2024 if no action is taken to improve building performance. This percentage increases to 80% by 2030.

Building owners will face penalties when in violation for non-compliance and non-reporting. The penalties are as outlined:

  • Failure to Report— $0.50 per building square foot, per month
  • Exceeding Emission Limits — $268 per metric ton over the building's established limit
  • False Reporting — $500,000

Planning Ahead for Local Law 97: Tips for Compliance

As we near 2024, many buildings in New York City must begin to make changes conducive to carbon neutrality. The Department of Buildings has developed resources to help guide building owners through emissions requirement limits and highlights some tips for compliance. In order to get started, building owners will want to check out NYC's guide to getting started.

Compliance for buildings in 2024 is only necessary for New York's largest buildings that are contributing carbon emissions with the highest intensity, but as time progresses nearly 57,000 buildings in NYC will need to be in compliance by 2050. Complying with LL97 will require building owners to make retrofits in their buildings and set energy goals. 

Understand the Benefits

Being on board with a law requiring you to make changes and adjustments within a building can be difficult. In order to understand why LL97 is taking effect, it's important to understand the importance of this law and how it'll benefit everyone. Aside from reducing carbon emissions by 80% over the course of 20 years, Local Law 97 benefits building owners in many ways:

  • Installing energy-saving solutions can improve your bottom line by reducing operating costs 
  • Maintaining building comfort can boost tenant satisfaction 
  • Using high-performing equipment increases the value and marketability of a property 
  • Contributing to a cleaner and healthier community with a reduced carbon footprint aligns with carbon neutrality goals 

Set Energy Goals

Many building owners don't think twice about their energy consumption and ultimate carbon emissions. While phase 1 of LL97 only immediately impacts New York City's largest and most carbon-producing buildings, there are still ways that building owners can contribute to decreasing emissions. Buildings in NYC should set energy goals in order to meet operating limits by phase 2 of this legislation. Building owners should implement energy efficiency strategies and carbon offsets, and look into renewable energy credits (REC). 

Optimize Building Energy Systems

The biggest consumer of energy within commercial buildings is the HVAC system, which accounts for 52% of energy consumption and emissions. Between heating, space cooling, and ventilation, these systems run nonstop and are generally inefficient. These inefficiencies make it difficult to make cost-effective improvements to improve sustainability and reduce operating expenses.

Beacon is an AI-driven controls optimization software from Tagup. It integrates with existing building automation systems (BAS) and uses machine learning to autonomously adjust control settings for optimal efficiency at all times. This lightweight, cash flow positive solution can reduce HVAC energy costs and carbon emissions by up to 30%.

Minimizing Your HVAC Costs & Emissions

As we near phase 1 of LL 97, building owners must take action. Whether that action is in reducing energy costs or working to limit emissions for phase 2, one of the most important places to retrofit and implement new technology will be the HVAC system. HVAC systems are difficult to optimize based on weather and load, but with the help of machine learning and artificial intelligence, it can be much easier. 

Interested in understanding how machine learning can help you comply with Local Law 97? 

Book a demo.

Ruth Favela
Ruth Favela
February 13, 2023