Upcoming NYC Laws Will Require 20% Energy Savings by 2030

Contrary to popular belief, motor vehicles are not the main source of greenhouse gas emissions in modern cities. According to the NYC Urban Green Council, 67% of emissions can be attributed to buildings. There are direct emissions, such as those produced by combustion-based heating systems; and indirect emissions, when a building uses electricity or steam that was produced off-site with fossil fuels.

NYC has established the goal of cutting down GHG emissions by 80% by 2050, with respect to 2005. There has been progress so far, since emissions have been reduced from 61 million tons to 52 million tons between 2005 and 2016. However, efficiency gains must be achieved faster to reach the 80x50 goal.

The NYC Urban Green Council has been working with lawmakers and large real estate companies, in order to develop legislation that will speed up building energy savings.

• There are over 50,000 buildings larger than 25,000 square feet in NYC, and the new rules will require a 20% reduction in their energy use by 2030.
• The buildings covered by the upcoming legislation include luxury residential towers, which have the highest environmental footprint per unit of built area.
• To lead by example, the proposed requirements for city-owned buildings are more demanding. The law covers buildings above 10,000 square feet, and the deadline to achieve 20% savings is 2025 instead of 2030.

Similar legislation had been proposed in 2016 and 2017, but without success. However, this new proposal from the NYC Urban Green Council has obtained support from large real estate developers, who had opposed similar measures in the past. With successful deployment, the new energy efficiency requirements would help buildings achieve 36% progress towards the 80x50 goal.

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How NYC Can Achieve the 80x50 Emissions Reduction Goal

If the 50,000 largest buildings in NYC reduce energy usage by 20%, the environmental benefit is significant. However, this measure by itself is not enough to reach the 80x50 goal, and there are complementary efforts in planning, or already being deployed:

• An increased energy savings target between 40% and 60% is being considered for 2050.
• Reduced building consumption will be complemented with increased renewable energy generation. The NY-Sun program from NYSERDA has been successful in pushing forward the solar industry, and there are also ambitious plans for offshore wind power and utility-scale energy storage.
• To reduce on-site building emissions, space heating and domestic hot water systems can transition to electric heat pumps.

The new legislation will include a cap-and-trade program, where buildings can accumulate credits for exceeding 20% energy savings before 2030. These credits can be sold to landowners who are lagging behind, ensuring the overall target is achieved.

• If a building owner has many viable options to improve energy efficiency, the credit program creates an incentive to deploy them all. Any performance gains above the 20%  target provide a dual benefit: energy savings and GHG credit trading.
• Other property owners may face the opposite scenario: limited options in terms of energy efficiency, or having a high upgrade cost due to building conditions. In these cases, there is an incentive to purchase credits.

There are hefty penalties for property owners who don’t meet the energy efficiency target mandated in the upcoming law. In other words, the cost of doing nothing is much higher than either of the two compliance options. To provide fair conditions, the requirements are based on a baseline and not the actual building performance:

• Achieving 20% savings in an old building with inefficient systems is easier because there are many options available. The owner can simply choose the lowest-cost combination that meets the target.
• On the other hand, if a modern building already has the latest energy efficiency measures, asking the owners to achieve an additional 20% reduction can be unfair. In these cases they have already invested in energy performance, and additional gains will probably have a very high cost.

How Can Building Performance Be Measured?

Energy efficiency requires a different approach for each property: a measure that works in one building may be ineffective in another, and some buildings have conditions that make them more difficult and expensive to upgrade.

To complement energy efficiency measures, the NYC Urban Green Council has proposed a performance metric that can be calculated for each property. The metric has not been determined yet, but it will be similar to the ENERGY STAR score and designed specifically for NYC buildings.

An energy audit can give you a clear perspective of your building’s energy performance, while helping you identify the most promising energy efficiency measures. The proposed law that requires 20% savings by 2030 has not been completed yet, but you can start working towards compliance. Keep in mind that requirements are reduced or even eliminated if a building is already green, and you can even earn credits for exceeding the performance required.