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General Information

In 2019, North Carolina’s Department of Environmental Quality (DEQ) released the “Clean Energy Plan” (CEP), which outlined policy recommendations to reach the state’s GHG reduction targets of 40% below 2005 levels by 2025 (as specified by “Executive Order No. 80”) and 50% by 2030 (as specified by “Executive Order No. 246”). A core component of the CEP is to reduce electricity sector GHG emissions to 70% below 2005 levels by 2030 and attain overall carbon neutrality by 2050.

In July 2021, in response to a third-party petition, North Carolina’s Environmental Management Commission (EMC) instructed the DEQ to start a rulemaking process to establish an ETS which would enable the state to participate in RGGI.

In October 2021, North Carolina passed House Bill (HB) 951 (Session Law 2021-165) which requires the North Carolina Utilities Commission (NCUC) to develop a plan that takes all reasonable steps to reduce CO2 emissions from the state’s largest investor-owned utilities – Duke Energy Carolinas and Duke Energy Progress – by 70% by 2030, compared with 2005 levels, and achieve carbon neutrality by 2050. The resulting “Carbon Plan” was adopted in December 2022 and includes a series of measures addressed at the utilities to achieve these goals.

At an EMC Air Quality Committee meeting in July, the DEQ provided information on how the proposed North Carolina regulation to become a participating state in RGGI deviates from the existing RGGI Model Rule. The North Carolina regulation would cover industrial units, regardless of grid connectivity, as well as emissions from biomass/biofuel, such that biomass emissions would not be deductible from the compliance obligation of regulated entities. It would adopt consignment auctions, would not accept offset project applications, and would have a steeper annual decline in the CO2 budget to achieve the state's 70% reduction target.

Because the Carbon Plan is required by state law, it must be included in the baseline for analyzing future CO2 reduction policies in the state. Therefore, consideration of the RGGI rule by the EMC has been delayed to 2023.

Emissions & Targets

159.5 (2018)

By 2025: 40% reduction compared to 2005 levels (“Executive Order No. 80”)

By 2030: 50% reduction of total emissions (“Executive Order No. 246”) and 70% of State's investor-owned electric utilities emissions compared to 2005 (Session Law 2021-165)

 By 2050: Achieve overall statewide net-zero emissions (“Executive Order No. 246”) and State's largest investor-owned electric utilities achieve carbon neutrality (Session Law 2021-165)

Other Information

North Carolina Department of Environmental Quality: Government agency in charge of the protection of North Carolina’s environmental resources. Would be the body in charge of the administration and implementation of the CO2 Budget Trading Program.

Environmental Management Commission: Body responsible for adopting rules for the protection, preservation and enhancement of the state’s air and water resources. This body would be in charge of adopting the CO2 Budget Trading Program.

North Carolina Utilities Commission: An agency of the State of North Carolina created by the General Assembly to regulate the rates and services of public utilities in North Carolina. Responsible for developing and implementing the Carbon Plan.

Executive Order No. 80

Clean Energy Plan

HB 951 (Session Law 2021-165)

Executive Order No. 246

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