The Delaware Department of Natural Resources and Environmental Control (DNREC) has proposed amendments to Delaware’s Carbon Dioxide (CO₂) Budget Trading Program (7 DE Admin. Code 1147) to align with revisions recently adopted by participating states in the Regional Greenhouse Gas Initiative (RGGI). The proposal represents one of the most significant updates to the program in recent years and could have substantial implications for electricity-generating facilities and other regulated emission sources across the state.
Why is Delaware Updating the Rule?
Since 2009, Delaware has participated in RGGI, a multi-state market-based program designed to reduce CO₂ emissions from the power sector. In 2025, RGGI member states finalized a new round of program revisions intended to further reduce greenhouse gas emissions while maintaining market stability. Delaware’s proposed rulemaking incorporates those regional changes into the state’s regulations.
According to DNREC, the proposed amendments would:
- Adjust Delaware’s share of the regional CO₂ emissions cap for the period 2027 through 2037.
- Replace the Emissions Containment Reserve (ECR) mechanism with an increased minimum reserve price.
- Modify the quantity of allowances available through the Cost Containment Reserve (CCR).
- Establish an additional Cost Containment Reserve tier.
- Update regional base CO₂ allowance budgets.
- Eliminate offsets from the RGGI program beginning in 2027.
- Implement several administrative and programmatic revisions
Additional details regarding the proposal can be found on DNREC’s official rulemaking notice.
What Facilities Could be Affected?
The regulation applies primarily to electricity-generating units with a nameplate capacity of 25 megawatts (MWe) or greater that supply power to the electric grid. These units are designated as CO₂ budget units and must comply with RGGI’s allowance-based emissions program.
Affected facilities may include:
- Utility power plants.
- Merchant power generators.
- Energy facilities with grid-connected generation assets.
- Certain refinery operations that elect to participate under the regulation.
- Industrial facilities operating electricity-generating units that meet the program’s applicability thresholds.
Key Impacts
More Stringent Carbon Constraints
The proposed adjustments to Delaware’s share of the regional emissions cap through 2037 are intended to continue reducing allowable CO₂ emissions over time. Delaware is proposing to reduce the state CO2 budget by a factor of 10 in eleven years (from 2,870,690 tons in 2026 to 273,399 tons in 2037). As available allowances become more constrained, facilities may face increased pressure to improve operational efficiency, reduce emissions intensity, or invest in lower-carbon technologies. For many organizations, future compliance strategies may require a combination of emissions reductions, allowance procurement planning, and long-term capital investment decisions.
Elimination of Offsets
One of the most notable changes is the proposed removal of CO2 emission offset projects from the RGGI program beginning in 2027. Historically, CO2 emission offset projects provided certain regulated entities with an alternative compliance mechanism under specific circumstances. Their removal could limit compliance flexibility and increase reliance on purchased allowances or direct emissions reductions. Facilities that have incorporated offsets into long-range compliance planning should evaluate how the proposed changes may affect future compliance costs and emissions management strategies.
Changes to Allowance Market Dynamics
The proposal would replace the Emissions Containment Reserve with a higher minimum reserve price and create an additional Cost Containment Reserve tier. These changes are designed to improve market responsiveness and help address price volatility within the allowance market.
Public Participation Opportunities
DNREC has scheduled a virtual public hearing for July 28, 2026, and will accept written comments through August 14, 2026. Organizations affected by the proposal may wish to review the rulemaking package and consider participating in the public comment process.
Information regarding the hearing is available through DNREC’s Public Hearings webpage, and submit written comments through the agency’s online comment portal.
How Trinity Can Help
Navigating changing greenhouse gas regulations requires a clear understanding of both compliance obligations and potential business impacts. Trinity helps clients evaluate environmental regulations, identify compliance risks, and develop practical strategies to meet operational and sustainability objectives.
If your facility may be affected by Delaware’s proposed CO₂ Budget Trading Program revisions, now is the time to assess potential impacts and begin planning for future compliance obligations.
Contact Trinity’s local team today at 610.472.8349 to discuss how the proposed RGGI updates could affect your operations and to develop a practical path forward. Our consultants can help you understand the regulatory changes, identify risks and opportunities, and position your organization for long-term compliance success.
