Following litigation and several months of discussions and extensions, on May 26, 2026, NYS Governor Kathy Hochul signed into law the 2027 budget bill, which included significant changes to the state’s landmark Climate Leadership and Community Protection Act (CLCPA). These changes, which are effective immediately, are expected to have major beneficial impacts on businesses seeking approval of new projects and on the operation of existing businesses in New York State.
Key changes to the CLCPA include:
- Instead of the 2030 statewide requirement to reduce statewide greenhouse gas (GHG) emissions by 40 percent, the CLCPA now requires the New York State Department of Environmental Conservation (NYSDEC) to promulgate regulations “designed to achieve” a 60 percent reduction in statewide GHG below 1990 levels by 2040 “to the maximum extent feasible and cost effective.” The change in milestone year is important, but more importantly is the change from a “mandate” to a “target.”
- The NYSDEC’s deadline to promulgate regulations to meet the GHG reduction targets has been extended from December 31, 2024, to December 31, 2028. In doing so, the CLCPA now requires the NYSDEC to consider the following additional factors in developing its regulations, including feasibility, affordability for residents and businesses, the importance of fostering economic growth and competitiveness, available funding, and the development and commercialization of low- and zero-emission technologies. The law also mentions the possibility that these regulations may include cap-and-invest, but it doesn’t guarantee that result.
- Upstream out-of-state emissions from the extraction and transmission of fossil fuels are no longer included in “statewide greenhouse gas emissions” since they have already been accounted for in the originating state.
- The “accounting methodology” used to calculate GHG emissions has changed from a 20-year global warming potential (GWP) to the 100-year GWP used by the US Environmental Protection Agency, other states, and the international community. Biogenic sources of GHGs are now required to be reported separately, consistent with the methodologies of the Intergovernmental Panel on Climate Change.
- The Climate Action Council is required to update the CLCPA scoping plan for how to achieve the new GHG reduction targets in 2028 as well as every six years thereafter.
- The share of overall benefits of spending in disadvantaged communities has been expanded from 40 percent to 45 percent.
Governor Hochul has hinted at these changes for some time and directly called for CLCPA amendments in a March 20, 2026, op-ed in the Empire Report, citing various external factors, including post-COVID-19 inflation, supply chain disruptions, the war in Iran, and the federal government’s reluctance to partner on clean energy endeavors, that require “common-sense adjustments” to the CLCPA. These changes also moot litigation by the environmental community to force cap-and-invest regulations and also strongly appear to respond to the argument Barclay Damon has been making on behalf of clients in permitting efforts and litigation challenges under and to the CLCPA for several years.
The CLCPA changes mark a significant and impactful shift in New York State’s climate regulatory framework and will impact the NYSDEC’s existing GHG regulations, associated litigations, and projects seeking New York State regulatory approvals. Although no changes were made to Section 7(2) of the CLCPA—which requires state agencies to consider the impact of projects seeking permits, approvals, or both on the state’s ability to meet the CLCPA’s GHG emission reduction targets—these significant and material changes to the CLCPA will likely result in the NYSDEC modifying its implementation method.
Barclay Damon will continue to monitor how the state implements these CLCPA amendments and their potential impacts on various sectors of the economy.
If you have any questions regarding the content of this alert, please contact Yvonne Hennessey, Environmental Practice Area chair, at yhennessey@barclaydamon.com; Danielle Mettler-LaFeir, partner, at dmettler@barclaydamon.com; Dan Krzykowski, associate, at dkrzykowski@barclaydamon.com; Matthew Gino, associate, at mgino@barclaydamon.com; or another member of the firm’s Environmental Practice Area.