Local Law 97: Emissions Caps, Reporting, and Penalties

Local Law 97 is New York City’s climate statute capping greenhouse gas emissions from most buildings larger than 25,000 square feet, with the first annual limits in force for 2024 and significantly tighter limits arriving in 2030. It is the centerpiece of the Climate Mobilization Act and targets the city’s single largest source of carbon emissions: its building stock. Owners who exceed their annual cap pay $268 for every metric ton of CO₂ equivalent over the limit, and knowingly filing a false emissions report is a misdemeanor carrying fines up to $500,000.¹²

Which Buildings Have to Comply

Under NYC Administrative Code § 28-320.1, a building is “covered” if it fits any of three descriptions: a single building over 25,000 gross square feet; two or more buildings on the same tax lot that together exceed 50,000 gross square feet; or two or more condominium buildings governed by the same board of managers that together exceed 50,000 gross square feet.³ Square footage is drawn from Department of Finance records, so check the city’s property tax data rather than relying on your own measurements.

Exemptions

Several building types sit outside Article 320 even when they exceed the size thresholds: industrial facilities primarily used to generate electric power or steam; detached one- or two-family homes of three stories or fewer; affordable housing buildings; city-owned buildings and NYCHA buildings; buildings with rent-regulated units; houses of worship; schools as defined by New York State education law; hospitals; buildings owned by qualifying 501(c)(3) nonprofits; and cultural institutions as defined in the NYC Charter.³

“Exempt” is not quite the right word for all of these. Rent-regulated and affordable housing buildings still have obligations under Article 321, discussed below. Classifications can also shift during reassessments, so owners of borderline properties should track their status year to year.

The Emissions Caps

The law runs in two phases. The first covers 2024 through 2029 and is calibrated to catch the worst-performing buildings. The second begins in 2030, tightens the limits across nearly every building type, and is aimed at a 40 percent reduction in large-building emissions by 2030 and net-zero by 2050.⁴

Each building’s cap depends on its occupancy group under the NYC Building Code. The limit is expressed as metric tons of CO₂ equivalent per square foot, then multiplied by the building’s gross floor area to produce an annual cap in metric tons.⁵ For the 2024–2029 period, offices (Group B) are capped at 0.00846 tCO₂e/sf, apartments (Group R-2) at 0.00675, hotels (Group R-1) at 0.00987, and retail (Group M) at 0.01181, with distinct limits for assembly, educational, industrial, healthcare, assisted living, and storage uses. A 100,000-square-foot office building, for example, has a 2024 limit of 846 metric tons (0.00846 × 100,000). Mixed-use buildings calculate a weighted limit based on the square footage of each use.

The 2030 limits drop substantially for nearly every occupancy group. Owners already close to their 2024 limit should treat 2030 as the real compliance target, because waiting until 2029 to begin retrofits usually means paying penalties while the work is still underway.

How Your Building’s Emissions Are Calculated

Compliance is a math problem. Every covered building converts its annual energy consumption into metric tons of CO₂ equivalent using coefficients the Department of Buildings publishes for each fuel type. Multiply consumption by the coefficient, add the results across fuels, and compare the total to your cap.

For 2024 through 2029, grid electricity is counted at 0.000288962 tCO₂e per kWh, natural gas at 0.00005311 tCO₂e per kBtu, fuel oil #2 at 0.00007421, fuel oil #4 at 0.00007529, and district steam at 0.00004493.⁶ Starting in 2030, the electricity coefficient drops to 0.000145 tCO₂e per kWh, roughly half the current figure, reflecting the expected greening of the state’s grid. The gas and oil coefficients barely move. The practical effect is deliberate: electrified buildings will see their calculated emissions fall automatically in 2030, while buildings still burning fossil fuels on-site will find the cap harder to meet.

Owners pull this data from twelve months of utility bills covering electricity, gas, and steam, along with records of fuel oil deliveries. Most organize the figures in EPA’s Energy Star Portfolio Manager before transferring them into the city’s compliance forms.

Annual Reporting

Covered buildings file an emissions report with the Department of Buildings by May 1 each year.⁴ The first reports were due May 1, 2025, covering 2024 emissions.

Since March 2025, reports are filed through the city’s dedicated portal at nyc.beam-portal.org, not through DOB NOW: Safety as many owners initially assumed. DOB NOW: Safety still processes filing fees, extensions, and adjustment applications, and the DOB NOW payment confirmation number must be entered in the BEAM portal to complete the filing.⁷

Every report must be certified by a Registered Design Professional, meaning a licensed professional engineer or a registered architect, who signs off on the accuracy of the energy data and occupancy classifications.⁸ Without that certification, DOB will not accept the filing. The certifying professional stakes their license on the numbers, which is one reason the false-statement penalties are so severe.

Penalties

The enforcement structure has three distinct exposures.

Exceeding your annual cap costs $268 for every metric ton of CO₂e over the limit, and it applies each year the building stays over.¹ A building exceeding its cap by 500 metric tons owes $134,000 a year, and that number only grows as the 2030 limits arrive. The penalty is set to make retrofitting cheaper than paying fines indefinitely.

Failing to file the annual report is a separate penalty: gross floor area multiplied by $0.50 per month until the report is filed.⁹ For a 100,000-square-foot building, that is $50,000 a month. The practical consequence is that filing on time matters even for a building that is over its cap.

Knowingly making a material false statement in a report is a misdemeanor punishable by a fine of up to $500,000, up to 30 days in jail, or both, with a separate civil penalty of up to $500,000 on top.²

Mitigation if You Can’t Hit the Cap

Owners who miss the emissions target aren’t automatically stuck with the full penalty. The Department of Buildings has a good-faith-efforts pathway for owners actively working toward compliance.¹⁰

Qualifying generally means being current on the city’s related building energy laws (benchmarking under Local Law 84, lighting and submetering under Local Law 88) and having filed the required LL97 annual report. On top of that baseline, DOB looks at factors like approved permits for retrofit work, signed electrification contracts with the utility, or a submitted decarbonization plan targeting net-zero by 2050.

The decarbonization plan carries a trade-off. It can relieve penalties temporarily, but the owner cannot use Renewable Energy Certificates during the first compliance period (2024–2029), and the plan itself must include an energy audit, equipment inventory, financing details, and concrete timelines.¹¹ If the owner misses the plan’s milestones, DOB can impose penalties retroactively for years that had been waived.

Where the mitigation criteria aren’t fully met but the owner is making real progress, DOB may offer a mediated resolution: a formal agreement waiving penalties in whole or part, contingent on specific follow-through. Falling behind on that agreement also triggers back penalties for the previously waived years.

Alternative Path for Rent-Regulated Buildings (Article 321)

Buildings where more than 35 percent of units are rent-regulated follow a separate track under Article 321, regardless of whether those units carry income restrictions.¹¹ Instead of meeting a numeric cap, these buildings comply by implementing a defined list of prescriptive energy conservation measures — adjusting temperature set points, repairing leaks, insulating pipes and water tanks, installing radiator temperature controls, maintaining steam traps, upgrading lighting, sealing building envelopes, and adding exhaust fan timers, among others.¹² Article 321 buildings also file an annual compliance report by May 1.⁴ The pathway recognizes the financial constraints on rent-regulated buildings, but it is not a free pass: owners still have to document and certify each applicable measure.

Renewable Energy Certificates

RECs can offset some calculated emissions, but the rules are narrower than owners often expect. They have to come from renewable resources located in or directly feeding into New York City; wind credits from Iowa cannot be applied to a Manhattan office building.¹³ An owner also cannot meet the LL97 limits through RECs alone; they supplement physical building improvements rather than replace them. The city expects Tier 4 RECs, tied to new renewable generation delivered into the city, to become available in 2026 and projects them as an economically useful compliance tool through 2029. Owners on the decarbonization plan pathway cannot use RECs at all during the first compliance period.

Help Paying for Retrofits

Large-building retrofits are expensive, and the city has set up several resources to make the work financeable.

Local Law 96, a companion piece in the Climate Mobilization Act, established a Commercial Property Assessed Clean Energy (C-PACE) program available in all five boroughs. C-PACE attaches repayment to the property tax bill rather than to the borrower’s credit, which opens financing to projects that might not qualify for conventional loans. The program is designed specifically to fund the kind of energy improvements LL97 is pushing owners to make.

At the federal level, the Section 179D deduction for energy-efficient commercial buildings has historically provided up to $5.81 per square foot for qualifying improvements, but the One Big Beautiful Bill Act signed in 2025 eliminated the deduction for construction that begins after June 30, 2026.¹⁴ Projects that break ground on or before that date may still claim it.

For owners who don’t know where to begin, NYC Accelerator offers free technical assistance to buildings over 5,000 square feet, including a dedicated account manager, personalized project recommendations, help navigating LL97 deadlines, guidance on incentives and financing, and referrals to vetted service providers.¹⁵ It costs nothing and is usually the most practical first step.

1
New York City Administrative Code. NYC Admin Code Title 28 – 28-320.6 Penalties
2
New York City Administrative Code. NYC Admin Code Title 28 – 28-320.6.3 False Statement
3
New York City Administrative Code. NYC Admin Code Title 28 Chapter 3 Article 320 – Building Energy and Emissions Limits
4
NYC Buildings. LL97 Greenhouse Gas Emissions Reduction
5
New York City Administrative Code. NYC Admin Code Title 28 – 28-320.3.1 Annual Building Emissions Limits 2024 Through 2029
6
New York City Department of Buildings. Local Law 97 Calculating Building Emissions and Emission Limits
7
NYC Buildings. Local Law 97 of 2019 Reporting Portal Officially Launches
8
NYC Accelerator. Local Law 97
9
NYC Buildings. LL97 GHG Emissions Violations
10
New York City Department of Buildings. DOB Enforcement of Article 320 of LL97
11
NYC Accelerator. Prescriptive Pathways Handout
12
NYC Department of Buildings. Article 321 Filing Guide
13
NYC Buildings. Renewable Energy Certificate Policy for Local Law 97
14
Department of Energy. 179D Energy Efficient Commercial Buildings Tax Deduction
15
NYC Accelerator. Technical Assistance