Carbon Trading

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Announcements:

Revision A26 to amend Virginia's CO₂ Budget Trading Program regulation and resume participation in the Regional Greenhouse Gas Initiative (RGGI) Program has been approved and submitted to the Virginia Register for publication. For access to the regulatory text, Agency Background Document, and further details on the review process, please click here.

Virginia’s CO₂ Budget Trading Program regulation is being amended to reinstate the updated RGGI Model Rule as required by the House Bill 29 (HB 29) Amendments to Virginia’s 2024-2026 Biennial Budget.

Governor Spanberger approved amendments to Virginia’s 2024-2026 Biennial Budget under HB 29 on February 20, 2026. HB29 directs DEQ to “take all actions necessary to rejoin the Regional Greenhouse Gas Initiative...” by May 21, 2026. Specifically, a few of the required actions under Section R of Item 365 include:

“repealing or otherwise nullifying the final regulation titled 9VAC5-140, Regulation for Emissions Trading Programs, published in the Virginia Register of Regulations on July 31, 2023…”
“reissuing or otherwise reinstating the final regulation titled 9VAC5-140, Regulation for Emissions Trading Programs, published in the Virginia Register of Regulations on August 3, 2020, including any amendments necessary to account for the time such regulation was not in effect...”

As also required by HB 29, DEQ must complete a second regulatory action to align Virginia's program with the latest RGGI program review and revised model rule. This additional regulatory action must be completed no later than January 1, 2027. The new RGGI model rule lowers future state budgets and extends the cap reduction from 2030 to 2037, along with other revisions.

Further, HB 29 establishes that regulatory actions necessary to meet these requirements are exempt from the Virginia Administrative Process Act and do not require participation of the State Air Pollution Control Board. Virginia plans to resume participation in RGGI effective July 1, 2026 and take part in September and December 2026 auctions.

This webpage will be updated routinely to reflect the regulatory process accompanying Virginia’s reinstatement of the CO₂ Budget Trading Program.

Questions & Answers

Why is Virginia resuming participation in RGGI?

How will Virginians benefit from participation in RGGI?

What will the price of allowances be in the auctions?

What were power sector emissions in VA before joining RGGI, during RGGI membership, and afterwards?

When will Virginia be back in RGGI?

The action to reinstate the RGGI regulation must be completed by May 21, 2026. After the reinstatement action is completed, Virginia will formally resume participation in RGGI on July 1 when compliance with the rule will again be required. This will require Virginia fossil fuel-fired power plants sized 25 megawatts or greater to acquire enough allowances to cover their CO₂ emissions. These plants can acquire needed allowances in the September and December RGGI auctions.

What auctions will DEQ participate in?

How can I follow the process of the regulatory action to rejoin RGGI?

What is Virginia’s emissions cap for 2026?

What will Virginia’s emissions cap be in 2027?

What are RGGI Model Rules?

The Model Rule is a set of proposed regulations that form the basis for each RGGI state's CO₂ Budget Trading Program. Since its original design, the Model Rule has been periodically revised. In 2025, following a program review, RGGI developed a new Model Rule, which goes into effect the beginning of 2027. As required by HB29, DEQ must complete a second regulatory action to align Virginia's program with the revised RGGI Model Rule. This additional regulatory action must be completed prior to Jan. 1, 2027. The new Model Rule lowers future budgets and extends the cap reduction from 2030 to 2037, along with other revisions. For more information visit the RGGI website.

Will Virginia have a CCR during the September and December auctions this year, since the cumulative CCR for the 10 member states was drained during the March auction?