A RGGI CO2 offset allowance represents a project-based greenhouse gas emission reduction outside of the capped electric power generation sector. At this time, the RGGI states limit the award of offset allowances to five project categories, each of which is designed to reduce or sequester emissions of carbon dioxide (CO2) or methane (CH4) within the region.
By recognizing CO2-equivalent (CO2e) emissions reductions and carbon sequestration outside the capped sector, offsets provide compliance flexibility and create opportunities for low-cost emissions reductions and other co-benefits across sectors.
The RGGI states cooperatively developed prescriptive regulatory requirements for each of the five offset categories. These requirements ensure that awarded CO2 offset allowances represent CO2e emissions reductions or carbon sequestration that is real, additional, verifiable, enforceable, and permanent. Offset projects must be located within one or more of the RGGI states that award CO2 offset allowances.
CO2 offset allowances may be used to satisfy a limited portion of a regulated power plant's compliance obligation. The use of CO2 offset allowances is constrained to 3.3 percent of a power plant's CO2 compliance obligation for each control period or interim control period. Massachusetts, New Hampshire, Rhode Island, and Virginia do not award CO2 offset allowances under the RGGI program, but regulated power plants located within those states may use CO2 offset allowances awarded by another RGGI state.
At this time, five project categories are eligible for the award of CO2 offset allowances. Visit each category's dedicated page for more information about the category and its specific requirements.
Note that the sulfur hexafluoride, end-use efficiency, and afforestation categories are not included in the 2017 Model Rule, which resulted from the most recent program review process. States are moving forward to implement state-specific regulations based on the 2017 Model Rule according to state-specific timelines. Delaware, Maine, Maryland, New Jersey, New York, and Vermont have removed sulfur hexafluoride, end-use efficiency, and afforestation from the list of eligible offset project categories in their respective regulations. Massachusetts, New Hampshire, Rhode Island, and Virginia do not accept applications for any offset project types.
Offsets Project Tracking
The RGGI states have developed an offsets module in the RGGI CO2 Allowance Tracking System (RGGI COATS). The RGGI COATS offsets module is used to register offsets projects, track offset project Consistency Application and Monitoring and Verification Report submittals to RGGI states, track project regulatory status and the award of CO2 offset allowances, and provide public access to offset project documentation.
The offsets module in RGGI COATS enables offset project sponsors to register offset projects and electronically submit Consistency Applications and Monitoring and Verification Reports. Project sponsors must open a RGGI COATS general account in order to complete the application process; individual states may also require state-specific application submittal procedures.
Through COATS, the public may also access offset project applications and monitoring and verification reports submitted to the RGGI states. The Offsets Report includes the following information for each offset project: project ID code, project name, project type, reviewing state, application status, submission date, and CO2 allowances awarded. Only offset projects that have a Consistency Application deemed complete by the applicable state regulatory agency are available for public view. To view the Offsets Report, please click here.
The Offset Handbook explains:
- RGGI Model Rule provisions for offset projects (Subpart XX-10) and the award of CO2 offset allowances
- The documentation required in model templates for offset project Consistency Applications and Monitoring and Verification Reports. The model templates served as the basis for developing state-specific offset project application and submittal materials.
The Offset Handbook has been prepared for informational purposes only to explain the model documents listed above. The Offset Handbook does not constitute formal guidance or an official interpretation by any individual RGGI participating state regarding its CO2 Budget Trading Program regulations.