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Virginia prepares regulation to repeal ETS and withdraw from RGGI

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Almost three years after joining the Regional Greenhouse Gas Initiative (RGGI), Virginia is set to withdraw from the multistate system at the end of the year following executive action by the State’s Republican administration. On 7 June, a regulation repealing Virginia’s CO2 Budget Trading Program was approved and now awaits a final executive review. In a last ditch effort, Democrats in the legislative branch are challenging the regulation on legal grounds.

In early 2020, the Democrat-controlled General Assembly adopted the Clean Energy and Community Flood Preparedness Act, enabling the administration to develop implementing regulations for a power sector ETS. Virginia was then welcomed in RGGI in July 2020. Signals of Virginia’s potential exit from RGGI appeared in 2021, when the Republican Governor-elect Glenn Youngkin stated that he would use executive action to force Virginia’s withdrawal. Following up on his threats, the administration published a “Notice of Intended Regulatory Action” (NOIRA) in 2022, aimed at repealing the CO2 Budget Trading Program, the ETS implementing regulation.

During the one-month public comment period on the NOIRA, over 90% of comments opposed the repeal. Even so, the proposed regulation was adopted by the Air Pollution Control Board and posted to the Register of Regulations on 30 January 2023. The following public comment period resulted in around 1,900 commenters opposing the withdrawal and around 600 in favor of it. Despite this opposition, the Air Pollution Control Board voted to adopt the final regulation in a split 4-3 vote.

The regulation is now expected to be submitted for executive review. If Governor Youngkin signs off on it, it will be published in the state Register and take effect 30 days later, leading to Virginia's withdrawal from RGGI in December 2023. However, Democrats in the Senate and House of Delegates have challenged the Youngkin administration's decision to withdraw Virginia from RGGI through executive action alone, arguing that only a change in the Clean Energy and Community Flood Preparedness Act would allow the state to exit the program. Legal challenges are expected once the governor has signed the regulation.

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