Starting this summer, the owners of New York City’s biggest buildings will get a new way to comply with the city’s marquee climate law without actually cleaning up their buildings, and climate advocates say it could blow a hole in the whole thing. As first reported by City Limits, renewable energy credits are about to go on sale for the first time since Local Law 97 took effect, and building owners can buy them to offset emissions instead of paying to fix their properties.
How it works: Local Law 97, passed in 2019, requires buildings larger than 25,000 square feet to cut their emissions to meet caps that get stricter over time. Miss the cap, pay a penalty. But the law lets owners deduct their electricity emissions by buying renewable energy certificates, known as RECs. Each REC represents one megawatt-hour of clean energy, and buying them is a way to bankroll green power projects on paper without touching the boiler in your basement.
Until now there were basically no local RECs to buy. That changes because of the Champlain Hudson Power Express, a transmission line that reached commercial operation in mid-May and pipes hydropower from Quebec down to a connection point in Astoria, Queens. Gov. Kathy Hochul’s office says the project is projected to meet up to 20 percent of New York City’s energy needs. The New York State Energy Research and Development Authority, or NYSERDA, financed the deal by buying the credits it generates, and it plans to resell them to building owners starting in July or August, publishing the quantity and a presale price at that point.
The worry is that the credits are cheaper and easier than gut-renovating a high-rise. Pete Sikora, senior advisor at New York Communities for Change, told City Limits the current setup allows “effectively unlimited use of RECs,” which he said undermines the point of the law.
“The city gets jobs, it gets lower utility bills, it gets more valuable properties, it gets lower pollution. All of those things are huge positives for the city from Local Law 97,” Sikora said. “Those positives evaporate when developers and building owners choose to buy RECs instead of investing in their properties.”
The credits do have a hard limit built in. RECs can only cancel out emissions from electricity use, so a building running gas boilers or other fossil-fuel systems is still on the hook for penalties unless it changes those out. That matters here more than it would upstate. Upstate New York draws roughly half its electricity from renewables, but the city sources most of its power from oil and natural gas because of grid transmission constraints, so even a New Yorker running an eco-friendly heat pump is often still burning fossil fuels to do it. Building operations make up the majority of the city’s greenhouse gas emissions.
Supporters of allowing the credits argue that owners who already electrified their heat and stoves cannot control how dirty the grid is on a given day, since gas-and-oil “peaker” plants switch on when demand spikes during a heat wave or a cold snap. Critics counter that the credits let owners dodge the actual job. “It’s not helping anyone in the long term avoid doing the real work, which is cleaning up their own buildings’ emissions and getting rid of the burning of gas in their own buildings,” said Dan Zarrilli, who was chief climate policy adviser to former Mayor Bill de Blasio. Sikora added that even electrified buildings can still cut emissions through weatherization and better insulation.
The scale of the potential offset is the part that alarms advocates. An analysis from the Urban Green Council estimated that 50 percent of the city building emissions that exceed Local Law 97’s 2030 limits could be wiped out with credits. For office buildings, that figure climbs to 85 percent. The 2030 caps are tougher than the ones in place for the initial 2024 to 2029 period.
There is a legislative fix on the table. Councilmember Carmen de la Rosa introduced a bill that would cap how many credits a single building could use, limiting the deduction to no more than 10 percent of a building’s electricity emissions above its legal limit. The Council failed to pass a similar bill last year.
City Hall says it wants owners to do the retrofits. “The Mamdani Administration remains committed to helping property owners reinvest in their own buildings and reduce carbon emissions through energy efficiency retrofits,” said Jeremy Edwards, deputy press secretary for Mayor Zohran Mamdani. NYSERDA is set to publish the credits’ quantity and presale price when the sale opens.
Featured image: Courtesy citylimits.org
