How LL97 Fines Are Calculated: The $268/tCO2e Penalty, Step by Step

The headline LL97 number — $268 per metric ton of CO2e over the cap — is simple. What trips owners up is the two steps before it: figuring out the building’s emissions, and figuring out the building’s limit. Get those right and the penalty math is arithmetic.

The formula

At its core, the annual penalty is:

Penalty = (Building’s annual emissions in tCO2e − Building’s annual emissions limit in tCO2e) × $268

If the result is zero or negative — meaning the building is at or under its limit — there is no penalty. The penalty is assessed per year, so a building that stays over its cap owes it again the following year.

Step 1 — Convert energy use to emissions

A building doesn’t report “carbon” directly; it reports energy use — electricity, natural gas, district steam, fuel oil, and so on. Each fuel is multiplied by a coefficient that translates a unit of energy into metric tons of CO2e. Electricity, natural gas, and steam each carry their own emissions factor, which is why two buildings using the same number of energy units can have very different carbon footprints depending on fuel mix.

Step 2 — Find the building’s limit

Every covered building has an emissions-intensity limit (tCO2e per square foot) set by its occupancy type, multiplied by its gross floor area to give a total annual limit in tCO2e. Mixed-use buildings blend the limits of each occupancy across their respective floor areas. Critically, these intensity limits are lower in the 2030–2034 period than in 2024–2029, so the same building’s limit shrinks at the 2030 deadline.

Step 3 — Apply $268 to the overage

Subtract the limit from actual emissions. Multiply any overage by $268. That is the annual penalty.

A worked example

Suppose a building’s reported energy converts to 1,000 tCO2e in a given year, and its LL97 limit for that period is 850 tCO2e. The overage is 150 tCO2e. The penalty is 150 × $268 = $40,200 for that year. If nothing changes and the 2030 limit for that building drops to, say, 700 tCO2e, the same 1,000 tCO2e of emissions would put it 300 tCO2e over — doubling the overage and the penalty.

(Numbers above are illustrative. Your building’s actual limit depends on its occupancy classification and square footage.)

Why owners get the number wrong

• Using site energy instead of carbon. A building can cut energy use and still be over its carbon cap if it relies on high-emission fuels like fuel oil.
• Ignoring 2030. Planning only to the 2024–2029 cap understates exposure once limits tighten.
• Bad benchmarking data. LL97 inherits whatever your LL84 benchmarking filing reports — garbage in, penalty out.

Once you know the number, the question becomes what to do about it: see our compliance roadmap and our guide to financing the retrofits that close the gap.