Written on: October 13, 2025 by Joe Uglietto
Most of our industry colleagues haven’t paid close attention over the years to the important developments in State and Federal policies and regulations regarding decarbonization. It’s understandable that those of you who have done your best to keep up with your State association updates and who read my columns have been left feeling even more confused of late. I’ve said it before and it bears repeating: The only certainty these days is uncertainty.
Here’s a recap of where we stand with 2026 just a few months away.
Unlike the electricity sector, which has been regulated for years through various programs such as the Regional Greehouse Gas Initiative (RGGI), Renewable Energy Portfolio Standards and Alternative Energy Portfolio Standards, the transportation and thermal sectors had gone unregulated in regards to decarbonization. However, that began to change in a big way just 18 months ago, as many Northeast and Mid-Atlantic States were in the process of developing their own market-based decarbonization programs for the thermal and transportation sectors.
Each State had an obligation—some legislatively mandated and others as an aspirational goal—to meet 2030 and 2050 greenhouse gas reduction goals. States began to release their plans to achieve their 2030 targets and many included market-based decarbonization programs for the thermal and transportation sectors. Low-carbon Fuel Standards, Clean Heat Standards (CHS) and Cap-and-Invest programs were the three most discussed programs. Rulemaking began for CHS in Vermont and Massachusetts, while rulemaking began in New York for an economy-wide Cap-and-Invest program. It seemed like the decarbonization train was racing downhill with nothing to stop it from running over everything in its path. Then came the one-two punch that turned everything upside down.
The Left Jab
The 2024 election was a significant wake-up call for legislators and regulators in many parts of the country. In some cases, incumbents lost their seats to pro-business candidates. In others, where incumbents who favored decarbonization came out on top, they quite literally felt the heat. It became clear that the electorate, even in many parts of the Northeast, would not be supportive of California-style regulations and would vote against those policies when given the chance.
The Right Hook
What immediately followed the election results was an actually cold Winter. This created significant consumer pushback as customers felt the squeeze from higher consumption and higher energy prices, especially as electric rates climbed. State legislators and State agencies felt the squeeze from their constituents. Since virtually all of the market-based decarbonization programs are built in such a way that add costs onto traditional residential energy sources to incentivize renewable technologies, State political and regulatory leaders suddenly had programs they could no longer sell to the public.
Additionally, pushback against wholesale electrification began in Massachusetts after homeowners who used air-source heat pumps felt their heating costs were too high. The high cost of heating during the winter of 2024–2025 and the added publicity that came along with it, slowed the development of CHS, Cap-and-Invest programs and Low-carbon Fuel Standards across the Northeast and Mid-Atlantic.
What Now?
While many of these programs have been delayed, they will not be going away. To continue with our boxing metaphors, the fighter is a little wobbly, but he is definitely not down for the count. Massachusetts still plans to implement a CHS, although it may likely be delayed until 2027 or 2028. New York is still developing its Cap-and-Invest program. Vermont has currently abandoned its CHS, but is exploring other programs such as Cap-and-Invest.
The recent delays are welcome. A pause in these programs gives you more time to prepare and it gives Industry leaders additional opportunities to shape the final details of each program. Still, we must remain clear-eyed. These programs will inevitably be implemented and the fuel companies that are prepared for them will be the ones that succeed for decades into the future. ICM
Renewable Energy Insights is a regular column by Joe Uglietto, President of Diversified Energy Specialists, with a focus on emissions reductions & renewable energy innovation. DiversifiedEnergySpecialists.com
