What Building Owners Should Know About the New NYC Sustainability Laws

Ece Ersoz

Over the centuries, New York City has been the trendsetter for many industries and it’s no different in taking action against climate change. In April 2019, the City of New York enacted the Climate Mobilization Act, a package of bills that aim to mitigate the significant effects of greenhouse gas (GHG) emissions from buildings and get one step closer to achieving its 80×50 goals. 80×50 aims to reduce the City’s GHG emissions by 80% by 2050. Local laws 95 and 97 were enacted to reduce the GHG emissions of NYC buildings, which account for 71% of the City’s emissions, promote the implementation of energy conservation measures in the buildings, and stimulate investment in renewable energy technologies.

Energy Efficiency Grade Law – Local Law 95

Local Law 95, previously known as Local Law 33, is the new law that requires buildings larger than 25,000 square feet to publicly display their energy efficiency grade at their main exterior door by 2020. Similar to the restaurant sanitary inspection grading that was enacted back in 2010, the residents of New York City now will be informed about a building’s energy performance as they walk down the block.

EPA’s Portfolio Manager will be used to calculate a building’s energy performance and a grade, such as A, B, C, or D, will be assigned based on its Energy Star score. If a score can’t be generated for a building, the correspondent grade will be an N and the building will be exempt from putting up a label. Buildings that fail to comply with the law will receive an F.

Of course, building owners are very concerned about the projected grade of their building. They also want to know how that building compares to the other buildings in the region of the City. It makes sense that everybody would prefer to live in/work in/own the building that receives an A, or in the worst case a B. However, based on publicly available NYC Benchmarking data, currently only 16% of the office buildings in New York City are expected to receive an A. Come 2020, there will be a lot of angry landlords who have to post Cs and Ds on the doors of their modern buildings!

David Energy’s Sustainability Map Shows NYC Landlords How They Stack Up to the Competition

Every neighborhood in NYC will have different profiles when it comes to energy efficiency. Users of our platform can browse our map to see how their buildings compare to other buildings in their zip code. This is a vital tool that helps building owners understand how tenants will view their building. Why move to a D when there’s a B next door with the same amenities and price range?

Greenhouse Gas Emissions Law – Local Law 97

The energy efficiency label is not the only new requirement that will influence how building owners approach energy. In April 2019, another bill, Local Law 97, was passed and it puts a limit on the amount of GHG emissions a building larger than 25,000 square feet can have. If a building fails to comply with the law, there are very significant dollar penalties.

How Emissions are Calculated

For compliance, the emissions will be calculated by using coefficients determined by the City in the law based on the combustion and/or consumption of electricity, oil, natural gas, and steam on the premises.  According to the technical amendment that was released in June 2019, owners will also have the option to calculate the emissions from electricity based on the actual time of use (for example, during peak times of usage on the grid, inefficient fossil fuel fired “peaker plants” turn on to meet demand, meaning higher emissions for the building from consumption during those times).

Who is Affected

Local Law 97 has a dynamic structure with changing limits every 5 years. Starting in 2025, the highest emitting 20% of buildings will start being fined until they reduce their emissions under a calculated threshold. Starting in 2030, the highest emitting 75% of buildings will be fined if they don’t meet their calculated reductions. It will be very hard to achieve the emissions reductions by implementing energy efficiency measures alone. The ultimate goal of the City is to enforce the implementation of energy efficiency measures in the buildings for the years 2025-2035 and then promote the use of renewable energy sources starting in 2035.

How Reductions Are Calculated

The law sets emissions intensity limits for buildings based on their occupancy groups. The limit for the Occupancy Group R (includes residential buildings) is 0.00675 metric tons of CO2e per sqft for the years of 2024-2029. GHG emissions cap of a building is calculated by multiplying the relevant occupancy group’s intensity factor with the building square footage. If there are different occupancy groups in a building, such as retail, office, etc., a blended average for the GHG cap is calculated by using the intensity factor of each occupancy group.

The penalty is $268 per metric tons of CO2e that the building is over its cap. For instance, if a building has GHG emissions equivalent to 100 metric tons CO2e more than the set limit in 2025, the penalty for that year would be $26,800.

The City is bringing a group of experts together to set an Advisory Board that will finalize the details of the law. The group will work on setting the roadmap for carbon offsets, purchasing renewable energy credits and carbon trading as alternative compliance paths for buildings that can’t reduce their emissions through efficiency measures alone

How David Energy Can Help

Each building in NYC has unique characteristics and each building must be evaluated individually to determine the best strategies to reduce its emissions, increase its energy efficiency grade and comply with the upcoming local laws. David Energy can help with its technology platform Mycor, which uses data to come up with actionable plans to help owners improve their scores, lower their emissions, and stay ahead of the competition. The Mycor platform provides building engineers with tools to help optimize energy systems in real-time within the building while integrating with renewable energy resources like rooftop solar, battery storage, and community solar. It also gives building managers utility cost and sustainability overview of their portfolio buildings. Mycor’s neighborhood map lets owners compare their building grades to those in the area and tracks buildings’ current and historical GHG emissions against the set GHG cap for each building in a portfolio. We use data from the platform to inform building owners and managers on how to reduce energy consumption and purchase renewable energy in order to lower GHG emissions and avoid penalties.

It is certain that New York City has a lot to work on to achieve the goals it set for the future. It will be exciting to see how the skyline will change over the years to come and which cities will follow NYC.


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