Tier 4 recs go on sale for ll97 compliance

NYSERDA has officially opened its Vintage 2027 Tier 4 Renewable Energy Certificate (REC) Summer Sale, providing owners with access to a new compliance mechanism that can help reduce reported carbon emissions and manage future LL97 penalties. The sale opens August 19, 2026, and will remain open through September 2, 2026.

The announced sale price is $35.52 per REC, with a minimum purchase quantity of 1,000 RECs. For many owners, RECs will represent a cost-effective component of LL97 compliance beginning in 2027.

Using the 2025-2029 emissions factors for electricity, the REC price of $35.52 represents approximately 46% of the equivalent fine.

What Are Tier 4 RECs?

Tier 4 RECs are generated from renewable electricity delivered directly into New York City through the Champlain Hudson Power Express (CHPE) transmission line. Each REC represents one megawatt-hour of renewable electricity delivered into NYC (NYISO Zone J) and verified through New York State's tracking systems. The CHPE project achieved commercial operation in May 2026, making these RECs available for compliance use.

Unlike many traditional renewable energy certificates that are generated elsewhere and cannot be used for LL97 compliance, Tier 4 RECs are explicitly recognized by New York City for reducing certain electricity-related emissions reported under LL97. They cannot be used to reduce fossil-based emissions.

What Compliance Years Can These RECs Be Applied To?

This first sale is a presale for CY2027 RECs. These RECs can be applied to a building’s 2027 emissions that are reported in the May 2028 LL97 filing. There will be another “true-up” sale for CY2027 RECs in Spring 2027. RECs can only be used for compliance for their specific “Vintage” year. There will be a summer pre-sale for CY2028 RECs in summer of 2027 and annually thereafter.  

Why Today's Sale Matters

Many building owners have already completed low-cost energy efficiency improvements and are now confronting a much more challenging question: how do you close the remaining emissions gap while planning and financing longer-term capital projects?

In many cases, electrification projects, central plant replacements, facade improvements, heat pump installations, and major HVAC upgrades require significant capital expenditures and multi-year implementation timelines. Tier 4 RECs offer owners the ability to reduce a portion of their LL97 exposure while these projects are being designed, approved, funded, and constructed.

Importantly, Tier 4 RECs should not be viewed as a replacement for decarbonization projects. Rather, they can serve as a bridge strategy that allows owners to manage near-term compliance obligations while advancing a broader long-term emissions reduction roadmap.

How CodeGreen Can Help

As Local Law 97 compliance advisors, we view Tier 4 RECs as an important new tool, but not a standalone solution. The greatest value comes from incorporating REC procurement into a comprehensive compliance strategy that balances emissions reductions, capital planning, operational improvements, and financial performance.

Our team helps building owners:

• Forecast LL97 emissions and penalties.

• Identify the most cost-effective compliance pathways.

• Evaluate Tier 4 REC procurement opportunities.

• Develop building-specific and portfolio-wide decarbonization plans.

• Create long-term compliance roadmaps through 2030 and beyond.

If you cannot meet the minimum purchase of 1,000 RECs (1,000MWH of electricity), contact us, we can help.

More info on Tier 4 RECs is available HERE from NYSERDA.