On 26 September 2018, the Virginia Department of Environmental Quality released a revised draft regulation for its proposed emissions trading system. The regulation proposes a cap of 28 million MtCO2e (short tons) in 2020, which would decline three percent per year to 19.6 million MtCO2e in 2030. This is a tightening of the cap as compared to the previous draft  dated November 2017. The regulation also makes clear that the program is set to continue beyond 2030.

The draft regulation now also includes information on the distribution of allowances, which is to take place through consignment auctions and make use of an Emissions Containment Reserve and of a Cost Containment Reserve – as outlined in the Regional Greenhouse Gas Initiative’s (RGGI) Model Rule.

Finally, additional changes were made to the regulation to ensure Virginia can participate in the RGGI program and to ensure consistent terminology.

The department has requested an additional 30-day comment period in light of these changes.

The proposed regulatory changes and additional comment period must be approved by the Virginia Air Pollution Control Board, which has postponed a decision on the matter until the Board Meeting in late October to give the Board more time to review the changes.