Avoid penalties. Protect your assets and reputation. Here’s what every New York building owner should know about Local Law 97—and how to stay ahead.
What Is LL97—and Why It Matters Now
New York City’s Local Law 97 (LL97) is part of the city’s Climate Mobilization Act and one of the most ambitious building-emissions laws in the country. It sets strict carbon-emission caps on buildings larger than 25,000 square feet, requiring them to reduce emissions by 40% by 2030 and 80% by 2050.
Starting in 2025, penalties kick in for buildings that exceed their carbon caps based on 2024 energy-use data. For many portfolios, that means the first bills will arrive in late 2025—whether they’re ready or not.
What the Fines Look Like
- $268 per metric ton of CO₂ above your annual cap
- $0.50 per square foot per month for failing to file reports
- Up to $500,000 + criminal penalties for falsified data
A midsize office tower could easily face six-figure fines each year if nothing changes.
Why LL97 Is More Than Just a Compliance Issue
LL97 isn’t simply about carbon—it’s about asset value, tenant confidence, and investor reputation.
Buildings that fail to comply will face not only fines but also:
- Devaluation of assets as non-compliant buildings become financial liabilities
- Tougher lease negotiations, as tenants demand green credentials
- Higher operating costs, especially if energy-inefficient systems remain in place
- Increased investor scrutiny, with ESG metrics influencing financing and portfolio decisions
For REITs, universities, and large corporate owners, LL97 compliance has quickly become an issue that extends far beyond sustainability—it’s now a core business-risk issue.
Common Missteps That Are Costing Owners Money
After analyzing dozens of NYC portfolios, here are the top LL97 mistakes property owners and managers are making right now:
- Waiting to act.
The fines due in 2025 are based on 2024 data—meaning those are already set in stone. However, fines due in 2026 are based on this year, 2025, so every inefficient kilowatt hour this year will count against you. - Treating compliance as a construction project instead of a data problem.
LL97 success starts with accurate carbon accounting, not just physical retrofits. Without the right baseline data, owners risk overspending on upgrades that don’t move the emissions needle. - Buying RECs without strategy.
Many firms are overpaying for Renewable Energy Credits (RECs) or buying the wrong type for LL97 credit. Sourcing RECs locally and aligning them with ISO markets can dramatically reduce costs. - Ignoring tenant behavior.
In multi-tenant properties, up to 40% of emissions can come from tenant operations. Identifying and addressing tenant-driven loads is critical to reducing ownership exposure.
What Smart Owners Are Doing Differently
Forward-thinking building owners and managers are already implementing three high-impact strategies:
- Granular Carbon Accounting.
Using sub-metering and advanced analytics, they pinpoint which systems or tenants drive overages—before the city’s audit does. - Strategic REC Procurement.
Instead of buying generic national RECs, they secure localized certificates that can comply with both LL97 compliance and voluntary corporate goals. - ISO-Level Forecasting.
Understanding where New York’s grid is heading—new interconnections, generation retirements, and congestion points—helps forecast future carbon intensity and plan retrofits more intelligently.
How ECM Helps Property Owners Get LL97-Ready
ECM Energy Management Services has spent over 20 years working in NYC and directly with New York Independent System Operator (NYISO), giving our clients insider-level access to data, policy changes, and market trends that others simply can’t see.
Our LL97 Services Include:
- Carbon Accounting & Forecasting
Detailed proprietary modeling & intel derived from former LL97 lawmakers, identifies your exposure, forecasts future penalties, and more importantly, highlights strategies to reduce your penalties. ROI of upgrades and REC procurement are then quantified. - ECO Dashboard™ Technology
Centralizes energy, emissions, and budgeting data in one intuitive interface—giving your team insight into compliance status and tenant contributions. - Renewable Energy Credit (REC) Procurement
ECM secures the lowest REC costs available in the market while ensuring certificates qualify for LL97 and ESG reporting standards. - LL97 Mitigation Planning
We develop cost-effective roadmaps that combine operational improvements, REC integration, and capital-plan alignment to help owners achieve full compliance without disruption.
Case Insight: How a Manhattan REIT Cut Its LL97 Fines by 50% Over the Next 10 Years
A leading NYC real-estate investment trust faced over $400K in projected LL97 penalties for 2025. After partnering with ECM:
- Targeted adjustment strategies reduced 100% of exposure for 2024-2029, and 20% for 2030-2034, resulting in >50% savings over 10 years.
- Sub-metering data identified three tenants driving 60% of excess emissions.
- The company leveraged ECM’s ECO Dashboard to demonstrate compliance and improve investor ESG reporting.
Result: No fines, lower operating costs, and stronger ESG scores.
What You Can Do Now
- Benchmark your buildings accurately with a proven strategy to minimize penalties.
Use the most recent energy-use data and ensure strategic reporting systems are in place. - Forecast your 2025 exposure.
Understand how far your portfolio is from the LL97 threshold today. - Build your mitigation plan early.
Engage experts with ISO experience who can integrate compliance, procurement, and financial impact.
Get LL97 Ready—With ECM
LL97 compliance isn’t optional—but costly penalties are avoidable.
ECM helps New York’s largest property owners and managers eliminate fines, cut emissions, and reduce REC costs with precision tools and ISO-insider expertise.
Schedule a Consultation with ECM
Protect your assets. Strengthen your reputation. Stay ahead of LL97.
About Sean Rustowicz
Sean has been at ECM for three years, serving as an Energy and Sustainability Analyst. Prior to joining ECM, Sean studied Environmental Geosciences at the University at Buffalo, where his research focused on climate change, renewable energy, and paleoclimatology. During his time in college, he spent time interning with former Congressman Brian Higgins in his Buffalo district office as well as with New Yorkers for Clean Power. Sean considers himself an environmentalist and is determined to find financially attractive ways to help mitigate climate change and promote sustainability.
About ECM
ECM is an energy procurement and management services firm with over 20 years of experience and a 100% success rate helping data centers and large enterprises navigate utility markets, sustainability mandates, and incentive opportunities. From ISO wholesale energy procurement to strategic renewables deployment, ECM delivers trusted expertise and measurable results to executives seeking cost savings, carbon reductions, and compliance with a fast-changing energy landscape.