2023 wins and trends in state energy and climate policy 

In 2023 we saw historic state-level progress in clean energy deployment and new climate policies, and 2024 promises to be another banner year. We haven’t a moment to lose. Countries are vigorously competing for clean energy jobs in a globally competitive marketplace, and the sobering threat of climate change is urgently undeniable. Rhodium Group’s 2023 Global Outlook finds it very likely that the average global temperature increase will be 2º- 4º Celsius by 2100. Though an improvement over earlier projections, this would exceed the international commitment under the 2015 Paris Agreement to limit global temperature increases to well below 2ºC and blow past current understanding of the need to limit global warming to 1.5ºC.  

CATF’s State Policy Program is primed for the moment. Over the past year, we’ve built a team of experts to lead our work in every region of the country — from Louisiana to Minnesota, and New England to California. We are embedded in local discussions with policymakers, and we help advance state-specific solutions using CATF’s policy and technical expertise. We see that successful deployment of clean energy technologies in U.S. states is key to global decarbonization. Building upon this year’s successes, CATF will deepen our presence in existing states and expand into more states across the country next year. 

2023 policy wins and trends 

States made giant leaps forward in 2023, with the help of CATF and others. 

1. Clean electricity: This year Minnesota and Michigan established clean electricity standards (CESs) that require utilities to provide 100% clean electricity by 2040. New Jersey Governor Murphy announced a goal of 100% clean electricity by 2035, and the legislature is working to pass a similarly ambitious CES. CATF supports CESs for their technology neutral approach to power sector decarbonization, and we testified in support of CESs to Michigan lawmakers. In California, CATF saw recommendations from its Growing the Grid report make their way into maturing legislative discussions about transmission planning and permitting.  

2. Clean transportation: This year Colorado and Maryland adopted the Advanced Clean Trucks (ACT) rule, and CATF testified to Maryland lawmakers in support of this policy. We also released a resource for policymakers that describes how states can utilize over 30 federal funding programs to support ACT implementation. California adopted its groundbreaking Advanced Clean Fleets rule, which compliments the ACT by requiring fleets to transition to zero-emission vehicles. And Minnesota convened a workgroup to recommend a policy design to the legislature for a clean transportation standard that ensures 100% clean transportation fuels by 2025. 

3. Industrial decarbonization: Colorado promulgated a first-of-a-kind methane emission verification standard, which will help limit methane pollution from the oil and gas sector. The state also finalized an innovative rule that places climate pollution limits on refining, microchip production, ethanol plants, and agricultural sources, while providing co-pollutant benefits to nearby communities. Louisiana promulgated a rule that will reduce methane emissions through increased controls and incentives on oil and gas well. Throughout 2023, CATF has worked with lawmakers, state officials, and stakeholders to help them understand sector technologies and policy options, and we’ve provided useful tools, such as the hydrogen hubs map and carbon capture and storage project map. 

4. Climate pollution reduction grants: Nearly all states (and dozens of metropolitan areas) are writing climate plans as part of the Climate Pollution Reduction Grant (CPRG) program. This is an important step in the evolution of state climate planning, as it allows some states to develop climate plans for the first time and others to deepen their climate planning. Significantly, this planning sets states up for access to $4.6 billion in competitive grants to implement priority projects and programs. CATF has offered 10 considerations for states as they proceed with CPRG and developed a framework states can utilize for a holistic approach to CPRG planning and implementation grants.  

5. Nuclear energy: States took significant steps on nuclear energy, in recognition of its important role as a clean, reliable source of electricity. Illinois repealed its nuclear moratorium to allow construction of small nuclear reactors, the California Public Utilities Commission approved Diablo Canyon Power Plant to continue operating until 2030, North Carolina modified its renewable portfolio standard to credit new nuclear energy and fusion energy, and Texas established an Advanced Nuclear Reactor Working Group at the Public Utilities Commission. CATF leveraged its technical expertise and local knowledge in each of these developments. 

6. Carbon capture and sequestration: Companies in Louisiana, Texas, Indiana, Pennsylvania, California, and many other states are advancing carbon capture and storage projects, helping unlock a key tool in industrial decarbonization. Louisiana passed legislation with new requirements for carbon capture and storage projects, including environmental analysis, revenue sharing of carbon storage funds, and local notice. The governors of Wyoming and Colorado partnered in signing a memorandum of understanding regarding direct air capture and economic development. Overall, there currently are carbon capture and storage-related projects in 28 states. 

7. Federal funding: Significant federal funding began flowing to states this year, including CPRG planning grants of $3 million per state, DOE hydrogen hub and Direct Air Capture hub announcements, as well as significant investment in clean energy technologies through tax cuts and other financial incentives. CATF shared resources on the federal funding programs to support Advanced Clean Trucks implementation, the resources needed to produce hydrogen, the carbon management provisions in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, and testimony in various states to support effective use of federal funding. 

2024 look ahead 

2024 offers additional state opportunities in terms of federal funding, legislation, regulatory actions, and community benefits. CATF already is working with states and stakeholders across the country on these topics. 

1. Federal funding: Implementation of federal funding will continue to be a major opportunity for states and the private sector. States will apply to and receive $4.6 billion of CPRG implementation grant awards. Funding and incentives also are available for renewable energy projects, carbon capture and storage, nuclear energy, clean transportation fuels, hydrogen production, manufacturing and industrial processes, communities, and individual and commercial customers. 

2. Legislation: State legislatures are teed up to pass new legislation on critical topics such as clean electricity standards, renewable energy siting, nuclear moratoria repeals, carbon capture and sequestration, clean transportation, and hydrogen production and use.  

3. Executive action: Governors and their agencies also will play a constructive role in advancing the topics mentioned immediately above. In addition, multiple state executives likely will apply to EPA for primacy over permitting Class VI wells, develop strategic plans for key issues (e.g., carbon management and cement decarbonization) promulgate new regulations, and alleviate barriers to the buildout of clean energy infrastructure. States also will take next steps to implement new EPA rules for power plants and oil and natural gas operations. 

4. Community benefits: States and communities will continue ensuring benefits flow to local communities through federal funding (e.g., Community Change Grants and Justice 40 requirements), community benefits agreements, and intentional engagement.  

Conclusion 

State-level action to advance clean energy technologies continues to be critical for securing jobs and economic opportunities in a global marketplace and for paving a path to global decarbonization. CATF’s state-level work helps policymakers advance practical policy and clean technology solutions that are customized for each state’s unique political, policy, economic, and stakeholder environment.