Regulations for emissions reduction proposed

On Dec. 10, the New York State Department of Environmental Conservation (DEC) and New York State Energy Research and Development Authority (NYSERDA) announced the release of proposed regulations to strengthen the Regional Greenhouse Gas Initiative (RGGI) to achieve affordable and effective reductions in pollutants contributing to extreme heat, damaging flooding, and other harmful climate impacts. The regulatory updates follow a multi-state comprehensive stakeholder program review that ensures access to sufficient RGGI emissions reduction allowances to meet expected energy demand and bolsters price protection for consumers.

“As New York and other states encounter rollbacks on the federal level when it comes to climate action, our commitment and partnership through the Regional Greenhouse Gas Initiative is advancing energy affordability and reliability, while reducing pollution,” DEC Commissioner Amanda Lefton said. “The proposed updates to RGGI are a strong example of how states can work together with an eye towards affordability to achieve emissions reductions that will improve air quality, protect our environment, invest in clean energy, and create healthier communities.”

“NYSERDA continues to support the Regional Greenhouse Gas Initiative and furthering efforts to reduce harmful emissions while ensuring price stability and affordability,” New York State Energy Research and Development Authority President and CEO Doreen M. Harris said. “In a time when New York and other states are facing federal headwinds, these proposed updates demonstrate a collective solidarity among states to continue to take action to ensure the health and well-being of our neighborhoods and communities in New York and beyond.”

In the face of federal rollbacks, DEC and NYSERDA’s proposals confirm New York’s commitment to energy affordability, climate resilience, and public health protection. RGGI continues to perform better than expected when the bipartisan program first launched more than 15 years ago. Emissions of carbon dioxide from the power sector in New York State reduced by more than 50 percent from 2005 levels and the energy transition is made more affordable statewide, with auction proceeds totaling more than $3 billion to date.

The funds support investments in energy efficiency, renewable energy, and electrification that ultimately provide savings to utility ratepayers. Net savings to participating ratepayers are expected to reach nearly $12 billion over the lifetime of the investments, providing a nearly 6-to-1 benefit based on investments of approximately $2 billion to date. An independent analysis found all RGGI states also realized $5.7 billion in public health benefits over its first six years alone (2009-2014), including fewer premature deaths, heart attacks, and respiratory illnesses thanks to cleaner air, and added 48,000 job-years. Additional investments are expected as RGGI continues.

DEC’s proposed RGGI updates would reduce the regional emissions cap to approximately 69.8 million tons of carbon dioxide in 2027, then decline 89 percent relative to the 2024 cap through 2037. This would result in carbon dioxide emissions decreasing by approximately 10 percent annually through 2033, followed by 3% annually until 2037. The updated cap trajectory, which would result in a regional cap reduction of more than 60 million tons of carbon dioxide to approximately nine million tons in 2037 and subsequent years, was determined through consensus among participating states following consideration of stakeholder feedback and technical modeling and analysis.

DEC and NYSERDA, in its role as the administrator of auctions and the investment of auction proceeds, also proposed draft regulations to increase the size of the Cost Containment Reserve (CCR) and establish a second tier of CCR allowances to ensure availability of RGGI allowances to meet grid reliability needs, ensure affordability, and protect against cost volatility. In addition, the joint proposal would remove the Emissions Containment Reserve from RGGI design and increase the minimum reserve price to also help protect against price volatility in the RGGI market.

Updates to NYSERDA’s auction rule must be approved by NYSERDA’s Board. On Nov. 17, 2025, the Board passed a resolution to approve publication of the proposed changes.

The proposed regulations and proposed auction rule are available on DEC’s website (https://shorturl.at/RjxQm). Public comments will be accepted through Feb. 17, 2026. DEC and NYSERDA will hold two virtual public hearings on Feb. 9, 2026, at 2 p.m. and 6 p.m.