In the waning days of its 2021 legislative session, the New York City Council passed a new law limiting the use of carbon intensive fuels in future building construction. Passed by the City Council on December 15 and signed by outgoing Mayor Bill De Blasio on December 22, Local Law 154 seeks to address the substantial impact of building-sector greenhouse gas emissions. These emissions are estimated to account for 70% of the City’s overall carbon footprint. The new law intends to help the City meet the emissions reductions targets outlined in both Local Law 97 of 2019 and the State Climate Leadership and Community Protection Act. While the legislation takes a phased-in approach over the next six years, the restrictions will dramatically alter future construction in New York City, requiring the expansion of electric alternatives to natural gas and fuel oil.

Local Law 154, which passed the council as by a vote of 40-7, will prohibit new buildings from using fuels with a carbon emissions coefficients of more than 25kg co2e/mmBtu. Based on current federal combustion coefficients, this would cover the combustion of almost all types of fossil fuel, including natural gas (approximately 52 kg co2e/mmBtu), #2 fuel oil (73.96 kg co2/mmBtu), and other types of home heating fuel (approximately 74 kg co2e/mmBtu). The legislation excepts from this requirement combustion in intermittently used, portable generators that are not used for heat or hot water. It also exempts fuels combusted in connection with commercial or industrial uses or for use in emergency, utility, or waste treatment applications.

The law’s new restrictions will be implemented in phases based on the size of new buildings, with additional leeway provided to larger developments and those that meet certain policy goals for affordable housing (defined in the law as 50 percent or more of the dwelling units in a building). The law will take effect for the first category of new construction (buildings under 7 stories) on December 31, 2023, with additional phase-in dates as follows:

• December 31, 2023 – Buildings less than 7 Stories.
• December 31, 2024 – School Construction Authority buildings.
• December 31, 2025 – Affordable housing buildings less than seven stories.
• July 1, 2027 – Non-Affordable housing developments greater than 7 stories.
• December 31, 2027 – Affordable housing developments greater than 7 stories.

The final version of the law differs significantly from the original legislation introduced by Councilmember Alicka Ampry-Samuel in late May 2021. The original version, which maintained a higher emissions coefficient threshold of 50 kg co2e/mmBtu, had significantly fewer exceptions and would have required compliance for all properties by the end of 2023. The new legislation, recognizing the difficulties inherent with using electric heating for larger buildings, provides longer compliance timeframes and directs the Mayor’s Office of Long Term Planning and Sustainability to study electric heat pumps and grid reliability technology, with a report due by January 1, 2023.

Local Law 154 represents only the latest salvo in the ongoing war over natural gas infrastructure in New York State in the wake of the dramatic expansion of high-volume hydraulic fracturing (fracking) production from the Marcellus shale formation in north-central Pennsylvania. New York State prohibited fracking by executive order in 2014, with a full legislative prohibition enacted as part of the 2020 New York State budget.  While most natural gas infrastructure falls under the regulatory authority of the federal Departments of Transportation and Energy, New York State has utilized its authority under Section 401 of the federal Clean Water Act to halt pipeline projects due to potential anticipated impacts on New York. These previous efforts, which gas companies claimed led to a decreased supply of natural gas, ultimately led utilities to claim that significant gas shortfalls and inconsistent service would occur due to steady demand.

The new local law, unlike those prior efforts, seeks to reduce the ultimate demand for natural gas, New York City’s most common fuel source. Between use for electricity generation, heating and cooking, natural gas comprises over 53% of total energy consumption in the City.  In 2019, New York City residences consumed over 206 million mmBtu of natural gas for heating and cooking, accounting for over 62% of residential greenhouse gas emissions. Although similar measures aimed at tackling building emissions have been enacted in smaller and warmer cities, New York is the largest and coldest jurisdiction to move toward building electrification. As a result, the Rocky Mountain Institute estimated that Local Law 154 will result in a reduction of 2.1 million tons of carbon emissions by 2040, the equivalent to the annual emissions of 450,000 cars.

Although the timeframes in Local Law 154 appear long, the first set of deadlines are less than two years away. New building projects should therefore take into account both the applicable compliance dates and the potential impacts of approval delays on their construction schedule, as a delay from the NYC Department of Buildings could result in significantly higher construction costs.