Ambitious new Act in New York creates the world’s biggest retrofit market

In April 2019, the most aggressive climate legislation (Climate Mobilization Act) to date for buildings, was passed in New York City Council. There are 11 pieces of legislation that are part of the Act, but the centerpiece is LL97 of 2019, which establishes strict carbon emissions limits for New York City buildings larger than 25,000 square feet.

Reducing emissions from buildings is a key strategy for achieving New York City’s ambitious climate change goals as buildings are the largest offender of greenhouse gas emissions, representing nearly 70 percent of New York City’s total emissions. New regulations are difficult to meet with existing approaches, which is why the NYC commercial and industrial real estate industry will need to wholly modernize and adapt. This creates a growing market potential for international companies.

The Climate Mobilization Act

In April 2019 the Climate Mobilization Act was passed in New York City Council. There are 11 pieces of legislation that are part of the Act, but the centerpiece is LL97 of 2019, which establishes strict carbon emissions limits for New York City buildings larger than 25,000 square feet. The Act is expected to reduce New York’s overall emissions by 10 percent by 2030 and eliminate 6 million tons of greenhouse gas emissions by 2030, the equivalent of taking 1.3 million cars off the road every year.

New York City’s building emission law, LL97, is the most aggressive climate legislation to date for buildings and it is arguably the largest disruption of the NYC real estate industry. Starting in 2024, building owners who don’t comply and stay within the limits will be heavily fined. Building owners must pay $268 per metric ton that their carbon footprint exceeds the limit, annually.

New law triggers a 13-fold increase over today’s annual market

In order to meet the challenges ahead, everyone must do retrofits differently and at scale. If buildings owners choose to efficiency to meet the carbon caps, a forecast by Urban Green Council shows a $16.6B to $24.3B energy retrofit market potential in New York City by 2030.

In 2018, just $235M was spent on building improvements to save energy. The new law triggers a 13-fold increase over today’s annual market depending on how soon owners begin investing in their properties. The progressive legal framework set by New York City Council has an impact on more than 57,000 building owners and the market must grow. The first compliance period will need the retrofit market to at least double in annual investment, and the second compliance period will require $3B in annual investment.

Learn more and join the Access Cities programme

Several actors play a role in achieving the ambitious goals, and international know-how and solutions are needed. It requires close cross-sector cooperation between stakeholder such as architects, engineers, manufactures, consultants etc.

The Access Cities programme follows the exciting development with green building in New York and looks for potential challenges and opportunities for companies to join. If you want to know more about green building opportunities, please get in touch with the Access Cities representative in New York.

For more information, please contact Danish Cleantech Hub