Virginia will resume participation in the Regional Greenhouse Gas Initiative (RGGI) on 1 July 2026, after completing the regulatory action required to reinstate its cap-and-trade program for power sector CO2 emissions.
The move brings to a close a protracted legal and political dispute over Virginia’s RGGI membership, as reported in our earlier update. Virginia first joined RGGI in 2021 before withdrawing in 2023. The state remained outside the initiative despite a court ruling that the withdrawal was “unlawful and without effect”. The process to rejoin RGGI formally began in February 2026, when Governor Abigail Spanberger signed House Bill 29 (HB29) into law, directing the Department of Environmental Quality (DEQ) to complete the steps necessary to rejoin.
Virginia’s 2026 allowance budget will only cover the second half of the year and is set at 11.48 million allowances. The state will take part in RGGI’s September and December 2026 auctions, where its allowances will be offered alongside those of the other ten participating states. In addition, cost containment reserve (CCR) allowances equivalent to 10% of Virginia’s 2026 allowance budget (1.148 million allowances) will be available during these auctions.
HB29 requires the DEQ to prepare regulations to bring its program in line with the rules established under RGGI’s Third Program Review. Those regulations need to be in place before 1 January 2027, and will reflect changes to the emissions cap, CCR, auction reserve prices, and the phase-out of offsets. That second regulatory action will determine Virginia’s 2027 base budget.
Further information is available on the DEQ’s carbon trading webpage.
