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2025 Annual State Energy Regulatory Round-Up

by Rhonda Gerson, Oil & Energy Magazine

Oil & Energy’s yearly look at enacted and pending state laws and regulations on biofuels, electrification, emissions, and the broader energy sector

For the last few years, Oil & Energy Magazine has spent December and early January compiling state-level energy-related laws. Each year, we have opened our article with the caveat that the information was current as of the time of writing – in this case, January 2025 – but readers should rely on their state associations or legislatures for the most up-to-date information.

This year, that caveat is more important than ever, as we are finalizing this report during a presidential transition. President Trump has promised to repeal all or parts of the IRA, rollback many of Biden’s regulatory actions, open up the permitting process and increase drilling, rescind California’s Clean Air Act waivers on vehicle emission limits, and many other moves that will directly affect our readers. Concurrently, Trump is (at this moment in time) still considering sweeping tariffs on all products from Canada, Mexico, and China, and has not announced if crude and other fuel products will be exempt. Should these tariffs go into effect, heating fuel supply chains and prices would be affected, which could add additional pressure on states to expedite their electrification campaigns. (Please see our “Federal Policy Update” on page 22.)

Furthermore, the election outcome suggests a marked backlash against policies that would impose expensive and unrealistic clean air and electrification policies on consumers. As Jim Collura, NEFI President and CEO, noted in December’s Front Burner column, “Even in the bluest states and districts where Democrats prevailed, particularly in the Northeast, they did so with historically smaller margins. Exit polls show three-quarters of voters view rising costs as a ‘major hardship’ for their families and a primary motivator in their ballot decisions.”

Collura’s message continued, “Even as federal policy shifts rightward, many blue states, particularly in the Northeast, are likely to continue to pursue aggressive decarbonization policies. However, the election’s clear message about costs and consumer hardship should give state policymakers pause as they consider implementing electrification mandates and other measures that limit choice and lay the highest costs on the most vulnerable among us.”

Oil & Energy spoke with association executives from several of the affected states to gauge their thoughts on the current political landscape and the implications for their members.

Connecticut

According to Chris Herb, President of the Connecticut Energy Marketers Association, the Association’s efforts helped defeat about a dozen bills in 2024. Their challenges were great, with proposed legislation that would ban the sale of diesel trucks and gasoline-powered cars, promote installation of 310,000 heat pumps, and declare a climate crisis, along with a dozen more harmful initiatives that would impact our industry. There was also anti-competitive price gouging legislation, along with the climate resiliency bill, that also failed to pass this year.

More specifically, legislation CEMA killed included those proposing: Declaration of a Climate Crisis; Installation of 310,000 Heat Pumps; Price Gouging; Adopting the California Air Resources Board (CARB) Phase-Out of the Sale of New Gasoline-Powered Cars And Diesel Trucks by 2035; Electrifying all State-Owned Buildings; Collecting Data of Heating Oil and Propane Use by Customer; Moving to Net Zero Emissions by 2050; Creating a Clean Energy Council to Coordinate Clean Energy Deployment and Climate Mitigation Programs; Developing a Plan to Transition Fossil Fuels Workers to Clean Energy Economy Jobs; Increasing Electric Battery Storage by 1,000 Megawatts; Increasing Efficiency Standards for Appliances; Expanding Residential Energy Storage System Deployment; and Expanding Natural Gas Capacity.

CEMA helped to get a favorable energy assistance bill that will require DSS to change the reimbursement to LIHEAP vendors passed in the last hour of the last day of the legislative session. This new law will make necessary changes for dealers participating in the program to be treated more fairly.

PGANE, NECSEMA, CT Motor Transport Assn, Beer Wholesalers Assn, API, and AFPM were vital partners in ensuring CEMA’s successes this year, Herb said.

Maine

In 2023, Maine Energy Marketers Association successfully warded off attempts to force homes and businesses to disconnect existing liquid- or gas-fired heating systems in order to earn rebates for heat pump installations.

Efficiency Maine remains committed to making electricity the primary heat source in homes. In September 2024, Maine launched a $36 million Home Energy Rebate Program funded by the Inflation Reduction Act to help homeowners adopt energy-efficient technologies like heat pumps.

At the start of the new year, Governor Janet Mills announced plans to recast the Governor’s Energy Office (GEO) into a cabinet-level Maine Department of Energy Resources. The Department would be the designated state energy office for Maine, and would undertake the same core duties that GEO currently does as the lead agency on matters related to energy resources, policies, planning, data, markets, energy security, and program implementation.

Maryland

The Maryland Department of Environment has laid out more than 100 priority actions to meet the state’s climate goals, including Governor Wes Moore’s executive order to create a Climate Subcabinet and develop a zero-emission heating equipment standard and a clean heat standard.

Massachusetts

Finalization of a Clean Heat Standard is required by law in Massachusetts. The Act Promoting a Clean Energy Grid, 2024 (CHS – 310-CMR 7.71) was signed into law in November 2024. According to Michael Ferrante, President of the Massachusetts Energy Marketers Association (MEMA), “the ultimate objective is to eliminate the use of fossil fuels for space heating and transportation; modernize the electric grid to operate on renewable energy sources, and electrify all homes using heating oil, propane, and natural gas.”

The original Senate version of the Act would have required retail heating oil and propane companies to report their daily pricing and post that information on their websites. MEMA and its industry partners were able to have that requirement removed from the final bill. However, according to information released by MEMA, under 210 CMR 7.71, retail heating oil and propane companies, and suppliers of natural gas, were required to register with MassDEP by January 31, 2025. Heating fuel storage facilities, the wholesale companies providing heating fuels for the Commonwealth, were also required to register. Following registration, heating oil and propane retailers, as well as suppliers of natural gas, will be required to submit quarterly CO2 emissions reports detailing fuel delivered to customers in Massachusetts. The first report is due on April 30, 2025. Heating fuel storage facilities will be required to provide MassDEP with monthly fuel shipment reports detailing all heating fuels brought into the state.

The official draft of the CHS regulation was originally scheduled for release by the end of 2024, but MassDEP has changed the timeline, noting that a proposed CHS regulation will be released during the winter of 2025, a finalized regulation released by the fall, and that 2026 will be the “first CHS compliance year.”

The CHS will “score” energy pro-viders’ carbon and greenhouse gas emissions. Energy companies will earn credits for annual, increasing reductions of that score or need to purchase alternative credits. “Biofuel blends in heating oil are considered a clean technology,” Ferrante explains. “If retailers don’t install heat pumps or deliver biofuel to earn these credits, they will be required to make alternative compliance payments (ACPs) to comply.”

Those biofuel blend credits will be based on the feedstock. Crop-based bio-fuels will be capped at B20, while waste-based biofuels will be creditable to B99. During MEMA’s November 2024 Legislative Update meeting, it was estimated that the ACPs for heating oil will start at approximately eight cents per gallon (cpg), rising to 21.5 cpg in 2027, and 81 cpg in 2030. Propane is anticipated to reach 45 cpg in 2030.

New York

New York’s biofuel mandate increases to a minimum ten percent (B10) blend in July 2025. While this is a boon for liquid fuel retailers’ cleaner heating message, it is a small consolation in the face of Albany’s electrify-everything activism.

The Empire State Energy Association (ESEA) and New York State Energy Coalition (NYSEC) – represent fuel marketers across New York and often work together, with other industry partners, to address statewide legislation.

In late December, Governor Kathy Hochul signed the Climate Change Superfund Act, which mandates that “companies that have contributed significantly to the buildup of climate change-driving greenhouse gases in the atmosphere to bear a proportionate share of the cost of infrastructure investments and other expenses necessary for comprehensive adaptation to the impacts of climate change in New York state.” This act will assess these “historical polluters” from 2000-2018 for $3 billion per year for 25 years.

One of the largest issues for 2025 is the NY State Energy Plan (SEP), which sets forth the priorities and goals for the state’s energy future. The last fuel SEP was released in 2015 and updated in 2020. The state has begun the planning process that will culminate in a new State Energy Plan by the end of 2025. A Draft Scope was released in September 2024, and ESEA and NYSEC jointly filed comments recommending an “all of the above” approach to addressing climate change, meaning that all carbon reduction strategies should be used and not solely rely on the electrification of the entire state economy. ESEA and NYSEC urged the state to consider renewable liquid fuels (RLFs) as an essential part of the state’s future energy plan.

There were several bills under consideration in 2024 that may be reintroduced in the coming months, including: allowing renewable diesel as well as biodiesel to be used to create bioheating fuels; aligning the state’s GHG accounting system with the Intergovernmental Panel on Climate Change and other jurisdictions; establishing a clean fuel standard; developing a cap and invest program (suspended through 2025 by Governor Hochul in early January); creating climate liability for fossil fuel related activity and a legal right to action; and “fuel switching” programs that provide grants for conversions to heat pumps and prohibit the installation of fossil fuel equipment in existing buildings seven stories or less.

Pennsylvania

If the chart of energy regulations on the preceding pages looks different for Pennsylvania than that of many other regional states, it is because their General Assembly was split for the first time in over a decade in addition to being a significant energy production state, according to Ted Harris, Executive Vice President of the Pennsylvania Petroleum Association. Democrats had, and held for 2025/2026, a one seat majority in the House. Republicans held a larger majority in the Senate, and went into the current term with 27 seats to Democrat’s 22. This creates a scenario where both chambers need to agree on policy, according to Harris, and last year, there was not much agreement.

Looking forward, Harris is anticipating more of the same with regard to environmental and energy policy, but notes that Governor Josh Shapiro’s positions could be a determining factor.

“It will be interesting to see where the Governor lands on the broader political scope for the remaining two years of his initial term. Even in the first few days of this year, Governor Shapiro has voiced concerns over the affordability of energy with a specific focus on electricity costs. It seems there will be more of an energy discussion in our state from a top-down approach, but time will tell. I won’t speculate, but I anticipate there could be more debate and discussion around energy and environmental policies during the 2025 – 2026 legislation session,” Harris concluded.

Vermont

Vermont has been on the front lines among the states considering Clean Heat Standards. The Affordable Heat Act (Act 18) was enacted in 2023, with an 18-month review process that was completed in mid-January 2025. According to the Check Back Report, Vermont’s CHS would cost $955 million over the next decade, and any resident using fuel oil, kerosene or propane for heat and hot water, or gas for cooking, will pay 58 cents per gallon.

Further, most of the economic benefits would come from the sale of biofuels because they are the “least expensive lean heat measures.” The report’s conclusion is that “a Clean Heat Standard is not a good fit for Vermont,” reports the Vermont Fuel Dealers Association.

The road ahead is not completely clear of hurdles for Vermont fuel providers, however. The 2020 Global Warming Solutions Act (GWSA) requires that Vermont have 26 percent fewer greenhouse gas emissions in 2025 than it did in 2005 and 40 percent fewer in 2030 than in 1990, and allows special interest groups to sue the state if these benchmarks are not met. A lawsuit has already been filed, and if a superior court judge rules that Vermont has failed to do its job, the Agency of Natural Resources could be compelled to implement the Vermont Climate Action Plan … which still recommends the Clean Heat Standard and other programs designed to increase the cost of oil and gas in Vermont.

We have provided a brief outline of greenhouse gas targets, renewable fuels policies, electrification initiatives, and other information for states in the Northeast and Mid-Atlantic, as well as California and others with aggressive GHG emissions and/or pro-electrification policies. This information is as accurate as possible as of January 2025, based on reporting from national and local energy and fuel associations; state offices; and news reporting. Please utilize any available statewide resources and consult with legal and tax professionals when developing any business plans related to local legislation and regulations.

State	GHG Targets	Biofuel Laws/Bills/Incentives	Electrification Laws/Bills/Incentives	Other
Connecticut	Zero-Carbon Grid by 2040 45% Carbon Reduction below 2001 levels by 2030 80% Carbon Reduction below 2001 levels by 2040	ACTIVE: B5: 7/1/2022 B10: 7/1/2025 B15, 7/1/2030 B20, 7/1/2034 B50, 7/1/2035 Tax Exemption for biodiesel, low-sulfur dyed diesel, or heating oil made from "agricultural produce, food waste, waste vegetable oil or municipal solid waste," from state gross earnings on the sale of petroleum products	EnergizeCT: up to $15,000 combined incentives for air source or ground source heat pump 66% zero-carbon electricity generation by 2030	Initiative to adopt CARB EV laws was dropped by Governor.
Delaware	26-28% GHG reduction from 2005 levels by 2025 50% Carbon Reduction by 2030 100% Carbon Reduction by 2050		Renewable Energy Portfolio, updated February 2021: 40% renewable by 2035 10% Solar by 2035
Illinois		Tax Exemptions: Biodiesel and Renewable Diesel are exempted from sales tax on fuels as follows: Through 3/31/23: B10/R10 - B100/R100 4/1/24: B13/R13 and above 4/1/25 - 3/31/30: B16/R16 and above All years - December - March, exemption drops to B11/R11 and above	40% renewable energy by 2030 50% renewable energy by 2050 100% renewable energy by 2050
Maine	45% reduction in GHG below 1990 levels by 2030; 80% reduction in GHG below 1990 levels by 2050 Net-Zero Carbon by 2045	Biodiesel Producer Credit of $0.05/gallon/percentage blend	Priority Climate Action Plan (March 2024) 100,000 new heat pump installations by 2025 130,000 using one-to-two heat pumps; 115,000 using a "Whole Home" heat pump system by 2030 Install 15,000 heat pumps in income-eligible households by 2025 Develop "energy efficient building codes" to reach net-zero $36 Million Home Energy Rebate Program from Inflation Reduction Act, another $36 Million to be released in 2025 Efficiency Maine Rebates up to $8,000 for Heat Pumps Homes do not have to disconnect existing heating equipment to get rebate 80% renewable energy by 2030	Biodiesel Producer Credit of $0.05/gallon/percentage blend Recognizes "wood, pellets and wood chips" as well as biodiesel and ethanol as biofuels
Maryland	60% GHG Reduction from 2006 levels by 2031 Net-zero GHG by 2045		50% clean energy by 2030 Net zero grid by 2045	Upon joining the U.S. Climate Alliance, Governor has pledged to explore heat standards like those being developed in Massachusetts and Vermont. Buildings over 35,000 sq ft must report direct emissions from heating by 2025, and reduce emissions 20% by 2030, reach net-zero carbon by 2040
Massachusetts	85% GHG emissions below 1990 by 2030 Net-zero by 2050	Delayed indefinitely: B2 by July 1, 2010; B3 by July 1, 2011; B4 by July 1, 2012; B5 by July 1, 2013	2024: An Act promoting a clean energy grid, advancing equity, and protecting ratepayers is signed into law. 12-month deadline for municipal permitting State permits will be issued by the Energy Facilities Siting Board after 15 months Appeals will be directed to state Supreme Judicial Court CLEAN HEAT STANDARD 310 CMR 7.71: Reporting of Greenhouse Gas Emissions: requires retail heating oil and propane companies, defined as "suppliers" in the regulation, to register with MassDEP by 1/31/25. These companies must also provide quarter emissions reporting and distillate fuel supply data to MassDEP effective January 1, 2025. 310 CMR 7.71 also requires wholesale heating fuel companies, defined as a "heating fuel storage facility" to register with MassDEP by 1/31/25, and report monthly fuel shipments of distillate fuel into Massachusetts to MassDEP. Clean Heat Credits - purchased by fuel providers - will pay for heat pump conversions Credit requirements and costs increase yearly, increasing costs for heating oil, natural gas and gasoline 2050 Decarbonization Roadmap calls for 1 million boilers/furnaces replaced with heat pumps by 2030	Alternative Energy Credits (AEC) for retail heating oil companies for B10 or higher blends 2025 Mass Save program will not provide rebates for fossil fuel heating equipment
Michigan	28% GHG reduction below 2005 by 2025 52% by 2020 Carbon neutral by 2050		60% of the state's electricity from renewable resources and phase out remaining coal-fired power plants by 2030.	Reduce emissions related to heating Michigan homes and businesses by 17% by 2030.
Minnesota	0% GHG reduction from 2005 by 2025 80% by 2030	ACTIVE: B5 Oct 1 - Mar 31 B10 Apr 1 - Apr 14 B20: Apr 15 - Sept 30	55% renewable by 2040	Biodiesel is defined as a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and meets ASTM Standard D6751-11b for pure biodiesel (B100).
New Hampshire				2024 Priority Climate Action Plan includes "Heat Pumps to Improve Energy Efficiency of Space and Water Heating of Buildings" as a priority measure, but does not impose penalties for use of heating oil.
New Jersey	80% GHG reductions below 2006 by 2050
New York	40% GHG reductions from 1990 by 2030 85% by 2050 Net zero statewide by 2050	ACTIVE: B5: 7/1/2022 (implemented 7/1/2023) B10: 7/1/2025 B20: 7/1/2030(Applicable only for space heating blended with biodiesel)	70% of electric generation from renewables by 2030 Zero emissions from statewide demand system by 2040 Cap and Invest Building Decarbonization Program suspended by Governor through 2025	Residential Tax Credit: residential biofuel blends, $0.01/gallon/percentage blend, B6-B20, through January 1, 2026 Biodiesel tax exemptions to B20
North Carolina	40% reduction in GHG emissions by 2025			Alternative fuels exempt from sales & use tax Biofuels distributors must register with Department of Revenue Biodiesel may be splash blended to B20
Oregon	45% GHG reduction below 1990 levels by 2035 80% by 2050	ACTIVE STATEWIDE: B5 in all diesel ACTIVE - PORTLAND B15/R15: 5/15/24 (wholesale), 7/1/24 (retail) B50/R50: 5/15/26 (wholesale), 7/1/26 (retail) B99/R99: 5/15/30 (wholesale), 7/1/30 (retail)	80% reduction by electric utilities by 2030; 90% by 2035; 100% by 2040 State GHG neutral by 2030	Adopted CARB transportation plan - Oregon defines biodiesel as "a motor vehicle fuel derived from vegetable oil, animal fat, or other non-petroleum resources, that is designated as B100 and complies with ASTM Standard D6751."
Pennsylvania	GHG Targets (not legally binding) 26% reduction from 2005 by 2025 80% by 2050	B2 for on-road diesel No active heating oil regulations;	Proposed under 2021 Climate Action Plan (requires additional legislative action) - 100% carbon-free electric by 2050
Rhode Island	45% by 2030 80% by 2040 Net-zero by 2050	ACTIVE: B5: 7/1/2021 B10: 7/1/2023 B20: 7/1/2025 B50: 7/1/2030	100% renewable energy standard	Biodiesel manufactured in RI resulting in employment in RI is exempt from state motor fuel taxes Financing: Affordable long-term financing for renewable energy and energy efficiency upgrades and alternative fuel infrastructure.
Vermont	Mandated by law: 26% reduction below 2005 levels by 2025 40% reduction below 1990 by 2030; 80% reduction below 1990 by 2050		CLEAN HEAT STANDARD as per the Affordable Heat Act (Act 18) VA PUC has determined a cost of $995 over 10 years and that this is "not a good fit for Vermont." Program subject to VT Legislative Review Clean Heat Standard Draft presented in September 2024. All companies selling fuel "into or in Vermont" must register Clean heat credits earned by reducing GHG emissions in thermal sector No payments required unless the Vermont Legislature gives final approval	Global Warming Solutions Act allows parties to sue the state if mandated GHG reductions are not met, and could force a Clean Heat Standard even if Act 18 is repealed.
Virginia	Net-zero by 2045		30% from renewable energy by 2030 100% from carbon-free sources by 2040	Biodiesel Fuel Producers Income Tax Credits up to $5,000/year
Washington	45% below 1990 levels by 2030; 70% by 2040 95% by 2050		80% reduction by electric utilities by 2030 90% by 2035 100% by 2040 State GHG neutral by 2030	Adopted CARB transportation plan Clean Fuel Standard (Jan 1, 2023) -Transportation Fuels - Based on Carbon Intensity (CI) - below standard generates credits; above standard generated deficits - must purchase credits to meet reduction requirement
Wisconsin	26-28% below 2005 levels by 2025		100% carbon-free electricity by 2050	Plan includes "avoiding all new fossil fuel infrastructure"
California	Carbon neutrality by 2045 Reduce GHG 85%			Phase-down of oil and gas extraction operations CARB transportation plan