Deadline Alert For NYC Building Owners: Greenhouse Gas Emissions Report Due May 1, 2025

As we reported last month, 2025 is the first year most buildings over 25,000 square feet are required to report their greenhouse gas emissions to the City’s Department of Buildings (DOB) under Local Law 97. Due by May 1 each  year, these reports will reflect the building’s energy usage from the year prior (e.g., reports submitted in May 2025 will report 2024 usage) and demonstrate whether a building complies with its building-specific greenhouse gas emissions cap. These reports must be submitted through the DOB’s online portal and certified by a registered design professional, such as a licensed engineer or a registered architect (RDP).

The City touts Local Law 97 as one of the most ambitious plans for reducing emissions in the nation. The May 1 annual report deadline is the vehicle for the City to identify those buildings that did not meet their emissions limits. This means, in less than two months, your RDP must be able to answer the following two questions about each building subject to Local Law 97:

1. What is the 2024 greenhouse gas emissions cap for your building? 

The building-specific greenhouse gas emissions, also commonly referred to as carbon emissions, cap is measured in emissions per square foot. Each building’s limit depends on its size, property type (e.g., multifamily, office, hotel), and compliance year. Those limits ratchet down over five compliance periods, with the ultimate goal of achieving net zero emissions by 2050. This means each building will be allowed to emit less and less over time. 

2. What was your building’s actual total greenhouse emissions in 2024?    

This is a complex and technical calculation based on several factors, including energy consumption, energy type, gross floor area, building type, energy efficiency measures, etc.    

Late reports could result in penalties of up to $0.50 per square foot of gross floor area, for each month the report is delayed within one year of the May 1 deadline. If your RDP needs more time to complete the report, you may be eligible for a 60-day grace period or an extension, but these are only available in very limited circumstances and don’t afford much extra time (2-4 months maximum). Reporting penalties are also separate and apart from penalties that may be assessed for failure to meet your buildings emissions target.

If your RDP determines that your building exceeds its emissions cap, you may face fines of $268 per ton of greenhouse gases, or carbon, over the limit. There are mitigating factors that the DOB may consider that could reduce potential penalties for exceeding your limit, however, they must meet the DOB’s strict requirements, and certain documentation must be filed with the May 1 annual report.

Looking Ahead

Based on energy performance data currently available, many are expecting a majority of buildings will meet their 2024 cap. Others are indicating that, after crunching the numbers, the penalties for noncompliance during this inaugural compliance period (i.e., 2025-2030 reporting years) are expected to be much less than the costs to invest in retrofitting or otherwise reduce or offset emissions. However, as emissions caps ratchet down with each new compliance period, penalty exposure could significantly increase and tip the balance on that cost comparison. 

The first reduction in the emissions caps will kick in for 2030 emissions, to be reported in 2031. It will be interesting to see the extent to which the risk of penalties and other compliance concerns will affect building management and budgeting decisions leading up to the next compliance period. We also note that failure to comply with Local Law 97 may have contractual or other implications (e.g., breach of obligations under loan agreements, leases, purchase and sale agreement representations, insurance policies, etc.). Understanding your building’s long term risk exposure and planning ahead for future compliance is key.