Action:
Amend CO2 Budget Trading Program Regulation to Align with the Regional Greenhouse Gas Initiative (RGGI) Updated Model Rule as required by Virginia’s 2026-2028 Biennial Budget (Rev. D26)
Action 7120
General Information
| Action Summary |
Governor Spanberger approved Virginia’s 2026-2028 Biennial Budget (Chapter 1 of the 2026 Special Session I Acts of Assembly) on June 29, 2026. Item 368 O of Chapter 1 of the 2026 Special Session I Acts of Assembly directs “All agencies or authorities of the Commonwealth with responsibilities identified in § 10.1-1330 of the Code of Virginia” to align Virginia’s CO2 Budget Trading Program regulation with the latest Regional Greenhouse Gas Initiative (RGGI) program review and revised Model Rule. Further, Item 368 O establishes that “[a]ny regulatory actions necessary to effectuate the requirements of this item are hereby exempted from the provisions of the Virginia Administrative Process Act (§ 2.2-4000 et seq.)” and notes that such amendment shall be completed “without further action by the State Air Pollution Control Board."
In order to meet the requirements of Item 368 O, this regulatory action amends Part VIII of 9VAC5-140 to align Virginia’s CO2 Budget Trading Program regulation with RGGI’s updated Model Rule, which resulted from a RGGI program review completed in 2025. The Virginia CO2 Budget Trading Program Regulation is the mechanism through which the RGGI program is implemented in Virginia. The following overarching amendments have been made:
• In 9VAC5-140-7020, removed or revised obsolete terms, added cost containment reserve (CCR) tier 2 terms and trigger-price references, and clarified several definitions, including the allowance transfer deadline;
• Throughout the regulation, removed “or its agent” in allowance offering, sale, or distribution contexts;
• In Article 4, added 9VAC5-140-7175 to clarify compliance obligations for the one-time six-month control period in 2026;
• In Article 5, updated base budgets, added CCR tier 1 and tier 2 references, removed bank-adjustment details, and removed emission containment reserve (ECR) references;
• In Article 8, removed certification, recertification, data substitution, and notification requirement provisions already addressed under 40 CFR Part 75 to streamline requirements; and
• In Article 9, added CCR tier 2 mechanics, updated CCR tier 1 language, removed ECR references, and revised allowance-offering language.
|
| Chapters Affected |
Only affects this chapter.
|
| Executive Branch Review |
This Action is exempt from Article 2 of the Administrative Process Act.
The normal executive branch review process is not required. As such, it can be submitted directly for publication and
is effective upon publication.
Exempt Citation:
Item 368 O of Chapter 1 of the 2026 Special Session I Acts of Assembly
|
| RIS Project |
Yes [8809] |
| Associated Mandates |
|
| New Periodic Review |
This action will not be used to conduct a new periodic review.
|
Stages
Stages associated with this regulatory action.
| Stage ID |
Stage Type |
Status |
|
11331
|
Final
|
Attorney General review in progress. |
Contact Information
|
Name / Title:
|
Julia Wack
/
Regulatory Analyst
|
|
Address:
|
1111 E. Main Street
Suite 1400
Richmond, VA 23219
|
|
Email Address:
|
Julia.N.Wack@deq.virginia.gov
|
|
Phone:
|
(804)432-3581
FAX: ()-
TDD: ()-
|
This person is the primary contact for this chapter.
