21 NYCRR Part 507
The Carbon Dioxide (CO2) Budget Trading Program, as enacted by the Department of Environmental Conservation (DEC), is implemented through New York State’s commitment to the Regional Greenhouse Gas Initiative (RGGI). RGGI is a program among 11 east coast states to reduce greenhouse gas emissions while improving the affordability and reliability of the electricity system. The CO2 Budget Trading Program, known as Part 242, creates a cap-and-invest program to reduce CO2 emissions from power plants, which are required to purchase CO2 emission allowances equivalent to their emissions. The CO2 Allowance Auction Program, which is known as Part 507, implements the sale of allowances by establishing auctions. The CO2 Allowance Auction Program, which is administered by NYSERDA, creates the Energy Efficiency and Clean Energy Technology Account, into which CO2 allowances are allocated. From that account, allowances are auctioned to entities that must comply with the CO2 Budget Trading Program requirements and other market participants. This regulation establishes the rules and procedures to implement auctions. The proceeds of the auctions are used to promote energy efficiency and the deployment of clean energy.
Following the third comprehensive review of RGGI by participating states, NYSERDA revised Part 507 to conform with program changes, which are also reflected in Part 242. On August 5, 2026 NYSERDA and DEC finalized revisions to both rules. Links to the revised Part 507 and Part 242 are provided below. Underlined wording found in the text of the express terms is material to be added to the regulations. Wording found within brackets [ ] is material to be deleted.
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Contact NYSERDA regarding the New York CO2 Allowance Auction Program at [email protected].
Sign up for the New York State's Regional Greenhouse Gas Initiative stakeholders email list.