UPDATE: Pennsylvania Court enters injunction temporarily halting RGGI link
This article was updated 11 July 2022 to reflect the court injunction. Originally published 5 July 2022.
On 8 July 2022, the Pennsylvania Commonwealth Court entered an injunction that temporarily prevents the state from implementing its CO2 Budget Trading Program. The regulation originally came into effect on 1 July 2022 and linked Pennsylvania to the Regional Greenhouse Gas Initiative (RGGI) as its 12th member. Under this regulation, covered entities in Pennsylvania would have had compliance obligations for their CO2 emissions from the second half of 2022 onwards.
The CO2 Budget Trading Program was initially published on 23 April 2022 in the Pennsylvania Bulletin, paving the way for its entrance in the Regional Greenhouse Gas Initiative (RGGI) as the newest participating state in the regional cap-and-trade program. The entry of Pennsylvania as the newest RGGI state would have considerably increased the size of the market-based program, with the state making up about 40% of RGGI’s capped emissions in 2023.
Shortly after its publication in April, the regulation was disputed by a collection of local coal stakeholders, including power plant owners, coal mine owners, and workers unions, who filed a lawsuit in front of the Commonwealth Court contending that the law is unconstitutional. A separate lawsuit was also filed by Republican lawmakers who sought to prevent the regulation from being published. The injunction pauses the implementation of the CO2 Budget Trading Program until the merits of the two cases can be heard, with the first court hearings expected this autumn in September and November. A spokesperson of the Pennsylvania Department of Environmental Protection said that the agency will appeal the decision to the state Supreme Court.