Last updated: June 9, 2026. By Will Tygart, author of the Commercial Restoration Carbon Protocol (CRCP). Part of the CRCP property manager guide.
No — your contractors’ emissions do not count toward Local Law 97. LL97 caps the greenhouse gas emitted by operating a covered building: fuel burned on the premises plus the electricity and steam the building purchases, converted to tons of CO2e by fixed coefficients. The restoration crew’s trucks, the generator it ran in your loading dock for nine days, the forty cubic yards of demolished drywall it hauled to a transfer station — none of that touches your LL97 number. Anyone selling you “LL97 contractor compliance” is selling something the law does not contain.
That is the honest answer, and it is also the beginning of the more interesting one: that carbon does not disappear. It lands in somebody’s books — usually your tenant’s — under rules that are arriving on a calendar of their own. Here is the full picture.
What LL97 actually counts
The statute defines “building emissions” as greenhouse gas “emitted as a result of operating a covered building” (Local Law 97 of 2019, §28-320.1), calculated from energy consumed at the building: on-site combustion of fuels and utility electricity or district steam, each multiplied by a published coefficient — for 2024–2029, grid electricity at 0.000288962 tCO2e/kWh and natural gas at 0.00005311 tCO2e/kBtu, among others.
What is not in the calculation:
- Contractor and vendor business operations — their vehicles, fabrication shops, off-site equipment fuel
- Embodied carbon of construction, renovation, and replacement materials
- Debris hauling, disposal, and landfill emissions
- Any supply-chain (Scope 3) emissions at all
Two precision points worth knowing because almost nobody states them. First: fuel a contractor combusts on the premises — say, diesel for a generator parked inside your property line — technically does flow into the building’s energy ledger; the exclusion is about off-site and embodied carbon. Second: the statute’s definition of building emissions excludes emissions during a declared local or state emergency that affects building emissions — one of two places where the law quietly acknowledges that disasters distort a building’s carbon year.
The two restoration clauses hiding in LL97
For property managers who deal with loss events, the rule contains two provisions that matter more than the Scope 3 exclusion:
- The disaster penalty-zero provision. Under 1 RCNY 103-14(i)(1), an owner who demonstrates that an unexpected event — the rule names hurricanes, severe flooding, and fire — damaged the building and precluded compliance, supported by photographs and a narrative, “may result in a penalty of zero dollars” for that calendar year.
- The emergency exclusion. Emissions during declared states of emergency are excluded from the building emissions calculation itself.
Read those together and the operational takeaway is this: after a major loss, your restoration contractor’s job file is LL97 evidence. The same photographs, moisture logs, equipment records, and timelines that flow through the insurance claim are exactly the documentation the penalty-mitigation ticket in BEAM wants. A vendor who documents well is quietly worth real money on your compliance side — before anyone says the word “carbon.”
So where does contractor carbon actually go?
Into the GHG Protocol’s Scope 3 categories, on whoever hires the work:
| The activity | GHG Protocol Scope 3 category |
|---|---|
| The restoration or trade service itself (labor, equipment, consumables) | Category 1 — Purchased Goods & Services |
| Capital replacements: chillers, roofs, elevators, BMS retrofits | Category 2 — Capital Goods |
| Demolition debris, disposal, landfill methane | Category 5 — Waste Generated in Operations |
| Crew transport and hauling | Category 4 — Upstream Transportation |
And the regimes that reach those categories are dated: California’s SB 253 requires Scope 1 and 2 reporting beginning in 2026 with Scope 3 following in 2027 — and the phase-in concepts CARB workshopped put Categories 1 and 5 in the first wave, precisely where restoration concentrates. The EU’s CSRD already pulls value-chain emissions into scope for thousands of undertakings. GRESB scores real estate entities on whether they monitor their service providers’ ESG compliance. None of these are LL97. All of them are why the data request is coming.
The proxy escape hatch is closing
For years the answer to hard-to-collect Scope 3 was the spend-based proxy: multiply invoice dollars by an industry-average factor and move on. That route is narrowing. The GHG Protocol’s ongoing Scope 3 revision prioritizes primary, supplier-specific data over industry averages — and a restoration contractor is the textbook case for why: a smoke-odor job and a Category 3 water loss can produce radically different emissions for similar invoice totals. The average buries exactly the variance that matters. Meanwhile CDP’s supplier data shows the collection problem is real: fewer than half of companies requesting environmental data from suppliers actually receive it.
That is the gap the Commercial Restoration Carbon Protocol exists to close: a per-job record, about a dozen fields, captured by the contractor at the moment of work, each field mapped to its GHG category with a primary-or-proxy flag. Not because LL97 requires it — it does not — but because the people your building reports to increasingly do.
What this means for each seat at the table
| If you are the… | The honest position is… |
|---|---|
| Owner | Contractor carbon is not your LL97 problem — but it is your GRESB supplier-monitoring evidence, and the contractor’s loss documentation can zero an LL97 penalty year. Collect the file. |
| Facility / property manager | You sit at the only point where every trade is authorized and signed off. Making job-level data a condition of engagement now is cheaper than reconstructing it from invoices in 2027. |
| Tenant (corporate occupier) | The restoration job in your leased space is your Scope 3 Category 1 line item under SB 253 / CSRD / GHG Protocol — not your landlord’s. If your FM team is not capturing it, nobody is. |
Frequently asked questions
Do contractor emissions count toward Local Law 97?
No. LL97 counts only emissions from operating the building — on-premises fuel combustion plus purchased electricity and steam. Contractor operations, materials, and disposal are outside the cap.
Does LL97 cover Scope 3 emissions at all?
No. LL97’s calculation is effectively Scope 1 and Scope 2 only, computed from the building’s energy consumption with fixed coefficients. No supply-chain emissions enter the math.
Can a disaster reduce my LL97 penalty?
Yes. Under 1 RCNY 103-14(i)(1), documented disaster damage — hurricane, severe flooding, or fire, with photographs and a narrative — can reduce the year’s penalty to zero dollars. Separately, emissions during declared emergencies are excluded from the calculation.
Then why would I collect carbon data from contractors?
Because the disclosure regimes that do reach vendor carbon are already scheduled — California SB 253 Scope 3 reporting starts in 2027 with purchased goods and waste in the first wave, CSRD is live in the EU, and GRESB scores supplier ESG monitoring today. Building the intake before the deadline is cheaper than forensic reconstruction after it.
Whose Scope 3 is a restoration job in a leased office — the landlord’s or the tenant’s?
The tenant’s, when the tenant (or its FM team) engaged the work: it is the corporate occupier’s Category 1 purchased-services line item under the GHG Protocol. The owner’s interest is different — GRESB evidence and LL97 documentation — but it is not the landlord’s Scope 3.