TL;DR: The LL97 fine is $268/tCO2e, and it can significantly impact your bottom line, with some buildings facing fines over $1 million per year.
I recently walked a 312K RSF Class B office building in Midtown East with the building engineer, discussing the implications of LL97 on their operations. The building's ENERGY STAR score was 58, and their LL97 emissions limit for the 2024-2029 period was 4,250 tCO2e. However, their actual 2023 emissions were 5,180 tCO2e, resulting in an overage of 930 tCO2e. At $268/tCO2e, their fines for 2024 would be $249K. By the 2030-2034 period, their projected annual fines would be $1.4M.
LL97 Fine Calculator
The LL97 fine is calculated based on the building's emissions over the limit, as outlined in NYC Local Law 97 Article 320. This means that buildings with higher emissions will face higher fines. For example, a building with an overage of 1,000 tCO2e would face a fine of $268,000 per year.
Some brokers and owners believe that the LL97 fine is not a significant concern, as they can simply pay the fine and continue operating as usual. However, this approach is misguided, as the fine can have a significant impact on the building's bottom line. According to the SEC Final Rule on the Enhancement and Standardization of Climate-Related Disclosures (March 2024), companies must disclose their climate-related risks and opportunities, including the potential impact of LL97 on their operations.
The LL97 fine is a significant concern for building owners and operators, with potential fines over $1 million per year for buildings with high emissions.
BERDO and LL97 Comparison
In comparison to LL97, Boston's Building Emissions Reduction and Disclosure Ordinance (BERDO) 2.0 §7-2.2 requires buildings to report their energy usage and emissions, but does not impose a fine for non-compliance. However, the Alternative Compliance Payment (ACP) mechanism allows building owners to pay $234/tCO2e instead of meeting the emissions target. This approach can be more cost-effective for building owners, but it does not address the underlying emissions issue.
For more information on BERDO, see our previous post: BERDO: Boston's Building Emissions Rule Explained for Brokers.
BERDO 2.0 requires buildings to report their energy usage and emissions, but does not impose a fine for non-compliance, unlike LL97.
This Does NOT Mean
Hitting the LL97 2024-2029 limit does NOT mean the asset is set through 2030. The period-2 limit drops roughly 40% in most building types. If your retrofit plan stops at period-1 compliance, you are designing for a headline that ages in 4 years. According to ASHRAE 90.1-2019 §6.5, building owners must consider the long-term implications of their energy efficiency measures.
For more information on the importance of considering long-term energy efficiency, see our previous post: Class B Office Due Diligence: The 10 Data Points That Matter in 2026.
Hitting the LL97 2024-2029 limit does not guarantee compliance in future periods, and building owners must consider long-term energy efficiency measures.
Frequently Asked Questions
What is the LL97 fine?
The LL97 fine is $268/tCO2e, and it is calculated based on the building's emissions over the limit.
How is the LL97 fine calculated?
The LL97 fine is calculated based on the building's emissions over the limit, as outlined in NYC Local Law 97 Article 320.
Can I avoid the LL97 fine?
Yes, by reducing your building's emissions to meet the LL97 limit, you can avoid the fine.
If you've heard the line 'LL97 fines are no big deal' in a pitch or an IC meeting, here's the one-liner that cuts through: 'At $268/tCO2e, LL97 fines can add up to over $1 million per year for buildings with high emissions, and they will only increase in future periods.'
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