On 20 February 2026, Virginia Governor Abigail Spanberger signed the state’s “caboose” budget bill (House Bill 29) into law. The bill, which appropriates revenues through June 2026, includes a provision (Budget Item 365 #1s) requiring all state agencies to take the actions necessary for the state to rejoin the Regional Greenhouse Gas Initiative (RGGI). Virginia would join ten other US states participating in the mandatory cap-and-trade program covering power sector emissions.
Virginia first began officially participating in RGGI in 2021, expanding the 2021 cap coverage by 30%, before withdrawing in 2023 following an executive order by then-Governor Glenn Youngkin directing officials to exit the program. A court later ruled that withdrawal to be “unlawful and without effect,” though a subsequent appeal in March 2025 meant the state remained outside RGGI until the legislature acted.
The House Bill 29 budget provision is accompanied by standalone legislation (House Bill 397 and Senate Bill 802) passed by the General Assembly, which clarifies existing statutory law, making explicit that Virginia’s participation in RGGI is and always has been a statutory requirement. If signed, these bills would close the legal gap previously used to exit the program, making it less likely that a future administration could exit through regulation alone. They await the governor’s signature, with a deadline of 13 April 2026.
The enactment of House Bill 29 requires the Department of Environmental Quality (DEQ) to repeal the 2023 exit regulation and reinstate the previous participation regulation within 90 days of the governor’s signing. Virginia is therefore expected to formally re-enter RGGI by late May 2026. The bill also requires DEQ to update the regulation to align with the latest RGGI program review and revised model rule by 1 January 2027.
