Good Faith Effort Criteria and Carbon Credits Unveiled

The eagerly awaited second set of Local Law 97 rules issued in mid-September provides some relief to the approximately 10% of buildings facing carbon-emission fines in the first compliance period starting in 2024. For the nearly 75% of buildings that the city estimates will face fines in the second compliance period starting in 2030, it is offering some relief in the form of a carbon-emission credit.

For the 10 percenters. The Department of Buildings (DOB) is willing to work with buildings to help mitigate fines, and the second ruling lays out what is needed. It is called “Good Faith Efforts,” and there are three threshold requirements to meet before a good faith effort will be considered. If the thresholds are met, the next step is to meet one of six defined circumstances. Once a good faith effort has been demonstrated, the DOB can decide what resolutions will apply. For example, it could agree to forgo an enforcement proceeding against a building in exchange for the building’s agreement to bring itself into compliance.

For the 75 percenters. Aside from detailing good faith efforts, the new rules provide the possibility of receiving a credit against your carbon-emission score if your building has taken electrification steps that reduce reliance on fossil fuels. These measures include the installation and use of energy-efficient electric-based heating, cooling and domestic hot water systems. The credit can be used in one compliance year to reduce your emission score or, if not needed, can be banked to use in future years.