Carbon Capture Tech Can Cut NYC Buildings' Emissions, But Not Their Local Law 97 Fines

A company that helps capture carbon dioxide emissions generated by buildings’ gas systems is positioning itself as a solution for properties facing Local Law 97 fines.

CarbonQuest’s system takes carbon dioxide from buildings, liquifies it and then stores it. The liquified carbon emissions are then sold, transported and mixed into cement by another company that uses them in concrete blocks for construction and renovations, according to the Spokane-based company’s website.

But carbon capture doesn’t fall within the scope of actions that can help properties avoid racking up fines under Local Law 97, according to local publication The City.

The company’s New York City case study is 1930 Broadway, a multifamily building close to Lincoln Center. Owner Glenwood Management installed the technology in 2021, with CarbonQuest estimating that their tech is cutting the property’s emissions by somewhere between 60% and 70%.

But that won’t help Glenwood Management when the city starts handing out fines in 2024, when Local Law 97 goes into effect.

“As currently written, the law does not allow for carbon capture to be used to offset the emissions produced by buildings,” Kayla Mamelak, a deputy press secretary for Mayor Eric Adams, told The City.

Local Law 97 is supposed to incentivize building owners to decarbonize their properties through electrification rather than carbon capture, according to a coalition of environmental groups that have petitioned the NYC Department of Buildings and several elected officials. 

“We don’t see this as a viable solution,” Shravanthi Kanekal, a resiliency planner at the nonprofit New York City Environmental Justice Alliance, told The City. “The ideal solution that we see is really electrification of buildings and weatherization technology. This is really not that because we’re still burning fossil fuels.”

But electrifying will take too long for some buildings, said Anna Pavlova, CarbonQuest’s vice president of strategy and market development.

"When Local Law 97 was passed, lawmakers did not anticipate the development of distributed carbon capture technology, so it wasn't part of the compliance mechanism," Pavlova said in an email statement provided to Bisnow. "We are currently in dialogue with the Department of Buildings; at their request, we provided data that quantifies our technology's efficacy at reducing emissions all the way through utilization, and the pilot is currently under consideration."

Building owners are also concerned about the costs associated with electrification: 1930 Broadway faces $81K in fines, leaving Glenwood Vice President Joshua London unsure how to reduce the property’s energy usage beyond measures like switching out lightbulbs for LEDs. Switching to an electric boiler would mean replacing the building’s existing infrastructure in its entirety, he said.

Carbon capture may be residential buildings' “only economic option,” Peter Psarras, research assistant professor at the Kleinman Center for Energy Policy at the University of Pennsylvania, told The City. 

“Is this policy from New York good? Is it forcing technical lock-in?” he said. “Are you forcing the hands of buildings to run this route because it’s the only logistically available and affordable route for them to do so, whereas a heat pump technology with electrification could be down the road?”

Many landlords in NYC are struggling to comply with Local Law 97, which mandates that buildings larger than 25K SF must prove a 40% reduction in emissions from 2005 by 2030, with penalties kicking in next year for properties that haven’t started progressing toward that goal yet.

But some properties — like the Durst Organization’s One Bryant Park — were constructed to the highest environmental standards shortly before Local Law 97 was announced, leaving owners in a pinch as they try to figure out how to reduce emissions at their most efficient properties.

Those that can afford to, like Brookfield Properties’ One Manhattan West and JPMorgan Chase’s new headquarters, are leaving the NYC grid in order to get hooked up to renewable power earlier. But that solution is out of pocket for most properties, owners say.

“We have meetings every other week, internally as well as with external folks, to try to figure this out,” Marx Realty President and CEO Craig Deitelzweig told Bisnow last year. “And so far, we haven't been able to.”

UPDATE, MAY 10, 1:30 P.M. ET: This article has been updated to include a comment from CarbonQuest spokesperson Anna Pavlova.