Proposed Regulations Announced to Strengthen Regional Greenhouse Gas Initiative Program, Reduce Emissions

Updates to Multi-State Regional Greenhouse Gas Initiative (RGGI) to Achieve Affordable Emissions Reductions and Meet Expected Energy Demand

December 10, 2025

The New York State Department of Environmental Conservation (DEC) and New York State Energy Research and Development Authority (NYSERDA) today 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.”

New York State Energy Research and Development Authority President and CEO Doreen M. Harris said, “NYSERDA continues to support the Regional Greenhouse Gas Initiative and furthering efforts to reduce harmful emissions while ensuring price stability and affordability. 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. In addition, 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 percent 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 November 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 . Public comments will be accepted through February 17, 2026. DEC and NYSERDA will hold two virtual public hearings on February 9, 2026, at 2 p.m. and 6 p.m. Additional details and registration will be posted on DEC’s RGGI webpage  in the near future.

Following the public comment period, DEC and NYSERDA will work expeditiously to respond to public comments and anticipates adoption of a final regulation next year, in advance of 2027 when the updated emissions cap is slated to go into effect.

In July, the states participating in RGGI, including New York, announced the finalized program updates to strengthen the regional emissions cap. The updated program review secures progress through the tightened cap while providing additional flexibility if extra price protection is needed. The next program review is expected to begin no later than 2028.

On Monday, December 1, DEC also announced final regulations for Part 253  establishing a Mandatory Greenhouse Gas Reporting Program. The rule will protect against anticipated federal rollbacks and improve New York’s understanding of sources of greenhouse gas emissions, more effectively monitor the State’s progress toward pollution reduction goals and support the production of the annual GHG Emissions Report .

New York State's Climate Agenda

New York State's climate agenda calls for an affordable and just transition to a clean energy economy that creates family-sustaining jobs, promotes economic growth through green investments, and directs a minimum of 35 percent of the benefits to disadvantaged communities. New York is advancing a suite of efforts to achieve an emissions-free economy by 2050, including in the energy, buildings, transportation, and waste sectors. The State is also working to disburse the historic $1 billion Sustainable Future Program, which will deliver targeted funding to lower emissions, reduce household energy costs, and spur green job growth.