Beginning this July, New York City building owners may purchase renewable energy credits (RECs) to offset carbon emissions and comply with Local Law 97. While the credits are intended to support green energy, climate advocates warn that the policy could disincentivize building owners from performing necessary energy-efficiency upgrades, potentially undermining the city’s long-term decarbonization goals.
How the new credit system works
The renewable energy credits are tied to the Champlain Hudson Power Express (CHPE), a project that transmits hydropower from Quebec to Astoria, Queens. The project reached commercial operation in mid-May and is projected to supply up to 20 percent of the city’s electricity needs, according to a press release from Gov. Kathy Hochul. The New York State Energy Research and Development Authority (NYSERDA) purchased the RECs via contract and will begin reselling them to building owners this summer. Each credit represents one megawatt-hour of renewable energy.
Why climate experts express concern
The primary point of contention is whether these credits will serve as a substitute for physical building improvements. Local Law 97, passed in 2019, mandates that properties larger than 25,000 square feet meet specific emissions standards. Pete Sikora, a senior advisor at New York Communities for Change, argues that the ability to purchase “effectively unlimited” credits allows owners to bypass the law’s intent. According to Urban Green Council analysis, 50 percent of building emissions exceeding 2030 limits could be offset by RECs, a figure that reaches 85 percent for office properties.
Dan Zarrilli, who was chief climate policy adviser for former Mayor Bill de Blasio, noted that the grid’s reliance on fossil fuels—particularly during periods of high demand—remains a systemic issue. However, Zarrilli warned that relying on credits does not help owners perform the “real work” of cleaning up building emissions and removing gas-burning equipment. While proponents argue that owners cannot control grid composition, critics like Sikora maintain that even electrified buildings can pursue weatherization and insulation improvements to lower their carbon footprint.
What could happen next
The impact of this policy may depend on the final pricing and volume of the credits. If REC prices are low and no purchase caps are implemented, observers fear owners will favor purchasing offsets over investing in long-term retrofits. In response to these concerns, Councilmember Carmen de la Rosa has introduced legislation that would cap the use of RECs at 10 percent of a building’s excess electricity emissions. A similar proposal failed to pass the City Council last year.
City Hall has expressed a commitment to ensuring property owners focus on efficiency. Jeremy Edwards, deputy press secretary for Mayor, stated that the administration remains focused on helping owners “reinvest in their own buildings and reduce carbon emissions through energy efficiency retrofits.”
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