Tale of Two Cities: NYC's LL97 and Boston's BERDO

There's a new building ordinance in town for the Northeast region. Boston recently passed a revamped version of the Building Energy Reporting and Disclosure Ordinance (BERDO that requires large buildings to reach zero emissions by 2050. Like New York City's infamous Local Law 97, the new BERDO requires buildings to comply with carbon emission limits or face high penalties.

How do the New York City and Boston building ordinances compare? There are key differences in each policy that property owners should know.

Buildings Targeted

New York City requires that all buildings 25,000 square feet or more comply with LL97 starting in 2024. The mandate affects about 60% of the NYC building floor area, contributing approximately 70% of the city's emissions.

Boston's BERDO 2.0 will cover residential and non-residential buildings 20,000 square feet or larger. Buildings between 20,000 and 35,000 square feet or residential buildings with 15 to 35 units will need to begin reporting their energy use in 2022, but will not have to comply with the emissions standards until 2031. However, buildings 35,000 square feet or high will have to comply starting in 2025. The ordinance covers approximately 4% of buildings, contributing 60% of Boson's emissions from buildings.

Carbon Limits

Another notable difference is that the carbon limits for BERDO are measured in kg CO2e per square foot per year, whereas LL97's metric is in tons of CO2e per square foot per year. This subtle difference is something to pay attention to when comparing the carbon reporting of buildings. Boston has established carbon limit compliance periods until 2050, while NYC has only defined caps through 2034.

The following is a breakdown of the LL97 and BERDO carbon limits, both in kgCO2e, for the first compliance periods since New York has not defined the later limits. Boston's property types are categorized on building type, and NYC is by use and occupancy classification shown in parathesis.

Boston shows a lower and more stringent carbon limit for most buildings in its first compliance period. While NYC carbon limits drop more significantly during the 2024 - 2030 compliance period. On an individual building type basis, the carbon caps vary significantly and do not show a consistent trend for comparison.

One advantage of having a preview for emission compliance through 2050 is it enables long-term planning for the most effective carbon reduction strategies. Most buildings will have to undergo deep energy retrofits to comply with sharply decreasing compliance standards. Boston's outlining of all compliance periods through 2050 provides better visibility to longer-term carbon footprint strategies than NYC's 2035 defined limits.

Compliance Penalties

A motivation for eliminating GHG emissions stems from the associated penalties for not complying with the local benchmarking and carbon limits. NYC's LL97 defined its fine as $268 per metric ton of CO2e above the building's annual carbon emissions limit. On the other hand, Boston's BERDO's non-compliance penalties are assessed daily. Depending on the property's gross square footage, fines will run at $300-$1,000 per day.

The different measurements in these penalty structures make it difficult to compare how building portfolios in each city will be fined. Although the fines differ, they will encourage the adoption of energy efficiency and carbon reduction strategies compared to providing incentives alone.

Supplemental Compliance Mechanisms

 

BERDO allows additional compliance mechanisms to supplement carbon emissions reduction not met by building operations. Mechanisms include unbundled RECs, obtaining electricity through the Boston municipal electricity aggregation program, Power Purchase Agreements from renewable energy sources, and Alternative Compliance Payments, a type of carbon offset program.

Although these supplemental carbon reduction mechanisms can provide flexibility to lower GHG emissions, BERDO has not defined the percent these can affect building owners’ carbon reduction targets. Also, at the moment, these carbon offset strategies can apply to each compliance period until 2050. This leniency grants flexibility for buildings to reach their limit but can delay deep energy improvements required to achieve carbon caps. The new BERDO does include an Equitable Emissions Investment Fund to support carbon abatement projects in environmental justice populations. These communities will not be left behind or bear the burden of non-compliance and penalties.

On the other hand, LL97 significantly restricts the use of compliance mechanisms. Renewable Energy Credits (RECs) can offset 100% of building emissions but must be purchased from energy generated directly in the NYC grid, also known as NYISO Zone-J. Verifiable carbon offsets can contribute to up to 10% of a building's annual emissions limits only in the 2024-2029 compliance period. Similar to Boston, additional funding sources are also available to support the costs for lower-income and environmental justice communities.

New York restricts additional compliance mechanisms more than Boston, requiring buildings to directly address the adoption of energy efficiency measures and the transition away from fuel sources. Stringent alternative compliance methods also hold NYC accountable for achieving a clean grid by 2040 to support electrification.

First Step

Although New York and Boston have different methods to encourage property owners and managers to improve building performance and decrease carbon emissions, the end goal remains the same…. accelerating the decarbonization of the built environment.

Building retrofits and electrification will look different depending on building type, decade built, geography, and incentives available. These ordinances will drive strategic planning of energy efficiency and decarbonization measures to avoid penalties and achieve zero by 2050. That translates into lower utility costs, less O&M, healthier indoor environments, and resilient facilities that help prepare for the worsening effects of climate change.

Celine Damide is a Clean Energy Data Analyst at Brightcore. She contributes to our sustainability blog, where we share insights on clean energy solutions for your business or institution, whether you have a fully formed corporate social responsibility plan or you are just starting to consider a renewable energy or energy efficiency strategy. Follow Celine and Brightcore Energy on LinkedIn and Twitter (@BCEnergy).