On July 13, 2021, the Pennsylvania Environmental Quality Board approved a rulemaking  to establish a program to limit the CO2 emissions from fossil fuel-fired electric generating units (EGU) located in the Commonwealth.

The stated purpose of the final-form rulemaking is “to reduce anthropogenic emissions of CO2, a greenhouse gas (GHG) and major contributor to climate change impacts, in a manner that is protective of public health, welfare and the environment in this Commonwealth.”  The rule would establish the Pennsylvania’s position in the Regional Greenhouse Gas Initiative (RGGI).

RGGI is a partnership between New England and Mid-Atlantic states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia).  RGGI’s goal is to reduce GHG through a “cap and invest” program that both sets a regulatory limit on CO2 emissions from EGUs and creates a trading program for CO2 allowances.  Each state participating in the RGGI sets its own CO2 emission budget, which will decline gradually over time.  The summary of the final-form rulemaking indicates that if Pennsylvania commences participation in the RGGI on or by January 1, 2022, the CO2 budget for the Commonwealth will be 78,000,000 tons.  The stated goals are to reduce GHG emissions by 80% in 2050 (compared to GHG levels in 2005) and generate a net increase of over 30,000 jobs in the Commonwealth by 2030.

If finalized, the rule would adopt new compliance requirements for EGUs which will include Title V permit modifications, establishing a CO2 tracking system, emissions monitoring, and recordkeeping and reporting obligations.  Additionally, EGUs would be required to obtain necessary CO2 allowances if needed through auctions, offset projects, or through the secondary market.

The next step in the regulatory process is review by Pennsylvania’s Independent Regulatory Review Commission.  Additionally, the Pennsylvania Attorney General must determine the rulemaking complies with law before publication in the Pennsylvania Bulletin.  Pennsylvania DEP Secretary Patrick McDonnell has acknowledged likely legal changes, including potentially by members of Pennsylvania’s General Assembly who have stated they will bring a bill to require legislative approval join a cap and trade program.

You can read more about Pennsylvania’s proposed participation in the RGGI here.