New York Proposes Mandatory GHG Reporting Ahead of Cap-and-Invest Rollout

New York State is stepping up its climate accountability efforts. The Department of Environmental Conservation (DEC) has unveiled draft regulations requiring large greenhouse gas (GHG) emitters to begin mandatory annual emissions reporting, with the first reports due in 2027 for emissions data from 2026.

While the rule does not currently mandate emissions reductions or require purchasing allowances, it sets the foundation for New York’s anticipated cap-and-invest system—a market-based approach that will force high emitters to pay for pollution exceeding a declining emissions cap. This aligns with the state’s Climate Leadership and Community Protection Act, which mandates an economy-wide transformation to reduce emissions and fund environmental justice.

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Targeting Major Emitters Across Key Sectors

The regulation would apply to entities emitting more than 10,000 metric tons of CO₂e annually, including:

• Power generation facilities and electric power entities
• Natural gas compressor stations and other combustion sources
• Landfills and waste-to-energy operations
• Waste haulers, fuel suppliers, and fertilizer producers
• Anaerobic digesters and liquid storage waste facilities

While New York already collects some emissions data, this initiative will fill in critical data gaps, especially in light of weakened federal reporting standards.

DEC Acting Commissioner Amanda Lefton emphasized that comprehensive data is essential to creating an effective emissions reduction strategy:

“The proposed Reporting Rule will enable us to collect the information necessary to develop effective strategies that reduce harmful air pollution and direct investments where they are most needed, while also protecting New York’s consumers and economic competitiveness.”

Supporting Compliance and Cost Efficiency

To streamline the transition, the DEC plans to offer support tools, including:

• A user-friendly online reporting platform
• Live training once the platform launches
• A simplified estimator tool to help companies assess if reporting is required
• Alignment with existing federal and state reporting frameworks to reduce compliance costs

These steps are designed to ensure the process is cost-effective, accessible, and transparent, particularly for mid-sized operators that may face capacity challenges.

Laying the Groundwork for Cap-and-Invest

Governor Kathy Hochul first unveiled the cap-and-invest framework in 2023, a program expected to generate over $1 billion annually from allowance sales. Proceeds will fund emissions-cutting projects and protect vulnerable communities impacted by climate change and rising energy costs.

In her 2025 State of the State address, Hochul reiterated the importance of accurate emissions tracking as a prerequisite for launching this system. These reporting rules are now moving forward as part of that broader strategy.

The public comment period on the new reporting proposal is open through July 1, 2025.

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