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Carbon Trading

What's New

Virginia has posted the application for a Regional Greenhouse Gas Initiative (RGGI) operating permit. This application should be used by every applicant and contains the necessary information for issuance of a RGGI permit.

Any source that previously submitted an application for a RGGI permit must withdraw the application by sending an email to the Air Permit Manager of the appropriate DEQ Regional Office requesting withdrawal of the application. The new application must be submitted by January 1, 2021. Once received, the Regional Office will process the application for the RGGI operating permit.

On August 12, 2020, DEQ hosted a webinar on "What you need to know about the Virginia Carbon Trading Rule and Participation in RGGI". This webinar was held to acquaint those subject to Virginia's new carbon trading rule with the Regional Greenhouse Gas Initiative (RGGI). The webinar included presentations from DEQ staff and the staff of RGGI, Inc., as well as a question and answer period.

Rulemaking History

The 2020 Clean Energy and Community Flood Preparedness Act requires DEQ to participate in a cap-and-trade auction program to reduce carbon emissions from electric power generators. Carbon dioxide (CO2) allowances will be auctioned through the Regional Greenhouse Gas Initiative (RGGI). RGGI currently includes 10 mid-Atlantic and New England states. Revenues from the auctions will be directed toward the Virginia Community Flood Preparedness Fund and energy efficiency programs for low-income Virginians.

Executive Order 57 (2016) directed the Secretary of Natural Resources to convene a work group to study and recommend methods to reduce CO2 from electric power facilities and grow the clean energy economy within existing state authority. This group facilitated extensive stakeholder engagement before submitting a final report with recommendations to the Governor. 

Subsequently, Executive Directive 11 (2017), "Reducing Carbon Dioxide Emissions from the Electric Power Sector and Growing Virginia's Clean Energy Economy," directed DEQ to develop a regulation to control CO2 from electric power facilities that allows for the use of market-based mechanisms and the trading of CO2 allowances through a multi-state trading program. The CO2 Budget Trading Program regulation was originally developed through Regulation Revision C17.

Although the regulation was officially adopted, a budget item passed by the 2019 General Assembly suspended its implementation. This suspension was subsequently removed during the 2020 General Assembly session. 

Additionally, Chapter 1219 of the 2020 Acts of Assembly amended the Air Pollution Control Law to add a new Article 4, the Clean Energy and Community Flood Preparedness Act. Under § 10.1-1330 A, Clean Energy and Community Flood Preparedness, "[T]he provisions of this article shall be incorporated by the Department, without further action by the Board, into the final regulation adopted by the Board on April 19, 2019, and published in the Virginia Register on May 27, 2019. Such incorporation by the Department shall be exempt from the provisions of the Virginia Administrative Process Act (§ 2.2-4000 et seq.)." Accordingly, the regulation was amended to comport with the full Regional Greenhouse Gas Initiative CO2 emissions trading program and associated auctions.


July 2020

  • The CO2 regulation has been finalized and became effective July 10, 2020 (Regulation Revision A20). On January 1, 2021, Virginia will become a full participant in the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program to reduce emissions from fossil fuel plants.

May 2019

April 2019

  • The final carbon trading regulation (Revision C17) was approved by the State Air Pollution Control Board on April 19, 2019. A copy of the department presentation is available on this website, and the final text of the carbon trading regulation is available on Town Hall. See DEQ's news release for summary.

  • Links to the regulatory documents related to draft carbon trading regulation (Revision C17) considered at the State Air Pollution Control Board's April 19, 2019 meeting.

March 2019

January 2019

  • The re-proposed carbon trading regulation (Revision C17) has completed executive review, and will be open for public comment from February 4 through March 6, 2019. The board will consider the final regulation this spring.

November 2018

October 2018

  • The State Air Pollution Control Board approved the re-proposed carbon trading regulation (Revision C17) at the September 29 meeting; the department's presentation is available. The next step is executive review, then the new proposal will be published in the Virginia Register for a 30-day comment period. The board will consider the final regulation next spring.

  • The State Air Pollution Control Board will meet on October 29, 2018, to re-consider the proposed carbon trading regulation (Revision C17); visit the Town Hall webpage for a draft agenda, the proposal and other information.

April 2018

December 2017-January 2018

  • The proposed regulation published in the Virginia Register on January 8, 2018. This initiates the public comment period. Visit Town Hall for more information, and be sure to sign up for Town Hall notifications.

November 2017

  • The department presentation to the board at its November 16, 2017 meeting is available.

  • An analysis of potential changes in residential, commercial, and industrial customer electricity bills has been prepared by the Analysis Group.

  • The Georgetown Climate Center has provided Excel files with more detailed information on the runs presented in the October 20 webinar. The information provided in these spreadsheets is what ICF provides the RGGI states for their analysis of potential program designs and RGGI, Inc., posts on its website.
  • The draft proposed regulation that will be presented to the board at the November 16 meeting is now available.

October 2017

  • On October 20, Georgetown Climate Center hosted a webinar, 'ICF’s Chris MacCracken Reviews Modeling Results for Virginia Business-as-Usual and Cap Scenarios' for members of the State Air Pollution Control Board, the RAP and the public. ICF International has conducted energy economic modeling analysis to project future business-as-usual and possible ED 11 implementation scenarios for Virginia. Chris MacCracken of ICF reported on the results of that modeling analysis and took questions from the webinar audience.

September 2017

August 2017

May 2017

  • A Notice of Intended Regulatory Action (NOIRA) has been issued. This notice initiates the process for developing a regulation to reduce and cap carbon dioxide (CO2) from fossil fuel fired electric power generating facilities by means of an interstate trading program. To follow the progress of this regulatory action, be sure to sign up for Town Hall email notifications, and check the DEQ web page for air regulation public notices.
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Virginia Department of
Environmental Quality
P.O. Box 1105
Richmond, VA 23218
(804) 698-4000

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