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Oregon ETS

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Overview
Type: ETS
Status: Implemented
Jurisdiction covered: Oregon
Allocation: Free allocation (some from second compliance), Auctioning
Price Setting: Auction floor + cost containment, plus “Community Climate Investment” credits
Covered Gases:
  • Co2
  • Ch4
  • N2o
  • Sf6
  • Hfcs
  • Pfcs
  • Nf3
Covered Fuels:
  • Diesel
  • Gasoline
  • Lpg
  • Natural gas
Point of Regulation: Mixed (upstream fuels + point sources)
Offsets: Yes, with quantitative limit
Description

Oregon's Climate Protection Program (CPP) was adopted by the Environmental Quality Commission (EQC) in November 2024, following the December 2023 court invalidation of a prior program, and entered into force in January 2025. The CPP is an ETS designed to reduce GHG emissions by 50% below the 2017–2019 average by 2035 and by 90% by 2050. Initially launched in 2022, the CPP aimed to reduce GHGs in the state and deliver benefits to Oregon communities. The CPP established a declining cap on regulated emissions for covered entities, which included natural gas utilities (referred to as "local distribution companies") and non-natural gas fuel suppliers. The 2025 cap is 24.1 MtCO2e and planned to reduce each year, to reach 90% below 2017-2019 emissions levels by 2050. Covered entities were allocated yearly allowances based on their emissions. Additionally, the program permitted these companies to meet up to 10% of their emissions reduction obligations using compliance offset credits sourced from within Oregon, a threshold planned to increase to 20% over time. Emissions-intensive, trade-exposed (EITE) industries and direct-use natural gas (DNG) sources are registered in the program from the start but have compliance obligations only from the second compliance period (2028–2029), once DEQ has established emissions-intensity benchmarks for them. Electricity generation and aviation fuels are explicitly excluded.

Recent Developments

In 2025, Oregon's CPP entered its first compliance period. DEQ oversaw the program's operational launch, including the first annual distribution of compliance instruments to covered entities. As a one-time measure, DEQ also distributed early reduction compliance instruments representing emissions reductions in the fuels market from 2022 to 2024. Throughout 2025, DEQ began preparatory rulemaking to define declining emissions-intensity benchmarks for EITE and DNG sources ahead of their entry into the program in 2028.

Coverage

Not Specified

Pricing and Allocation Approaches

Not Specified

Compliance Approaches

Not Specified

Relation to Other Compliance CPIs

Not Specified

Covered Sectors
COVERED
Industry Industry
Mining and extractives Mining and extractives
Transport Transport
Buildings Buildings
Agriculture, forestry and fishing fuel use Agriculture, forestry and fishing fuel use
Waste Waste
Covered Emissions
50% Jurisdiction Emission
0.05% Global Emission

Covered : Uncovered:
Price

No price data available for this instrument.

Government Revenue

No government revenue data available for this instrument.