New York’s recently enacted Fiscal Year 2027 budget includes significant amendments to the Climate Leadership and Community Protection Act (Climate Act or CLCPA) and State Environmental Quality Review Act (SEQRA). The budget does not repeal the Climate Act’s core framework. However, it materially changes how New York measures emissions and establishes a new deadline for the New York State Department of Environmental Conservation (NYSDEC) to issue implementing regulations, among other measures. The bill also amends SEQRA to create new statutory exemptions and procedural deadlines to streamline reviews for certain projects. The amendments are effective immediately.
The Climate Act amendments are the result of a court order requiring the NYSDEC to promulgate Climate Act regulations by February 2026 (a deadline that was stayed due to an appeal). Governor Kathy Hochul has described these amendments as a “necessity” to balance New York’s long-term climate goals with affordability, while accounting for changed economic and federal policy conditions.
Amendments to the Climate Act
Key changes to the CLCPA’s accounting and implementation framework are described below:
- Implementing Regulations: NYSDEC is required to issue regulations implementing the CLCPA by December 31, 2028 (as opposed to the original target of 2024). In promulgating regulations, NYSDEC must consider, among other factors, (i) the feasibility of regulatory mechanisms, including an economy-wide cap-and-invest program; (ii) affordability for residents, businesses, and other entities; and (iii) economic growth and competitiveness.
- Greenhouse Gas (GHG) Targets: The amendments direct NYSDEC to issue regulations that achieve, “to the maximum extent feasible and cost effective,” a 60% reduction in statewide GHG emissions from 1990 levels by 2040. This is a major change, altering the previous 2030 target of a 40% reduction in emissions. The updated mandate does not change the 2050 target of an 85% reduction.
- GHG Accounting Methodology: The bill redefines “carbon dioxide equivalent”—used in measuring GHGs—as the “amount of carbon dioxide by mass that would produce the same global warming impact as a given mass of another” GHG over a 100-year rather than a 20-year, time frame. This significantly reduces the relative near-term weight of certain GHGs and changes how emissions are calculated.
- Definition of Statewide GHG Emissions: Now excluded from the definition of “statewide greenhouse gas emissions” are GHGs produced outside the State that are associated with the extraction and transmission of fossil fuels imported into New York. The amended definition still includes GHG emissions produced in the State from anthropogenic sources and GHGs produced outside the State associated with imported electricity.
SEQRA Reforms
Procedural and substantive changes to SEQRA, which seek to streamline project reviews, are discussed below:
- “Qualified Actions” Exemptions: The adopted bill identifies new “qualified actions” and exempts them from SEQRA review.
- Housing. For New York City-scale municipalities, qualifying housing actions must meet criteria involving existing public or community water and sewer infrastructure, location on a previously disturbed site, zoning limitations, limits on nonresidential floor area, and unit caps, among other conditions. For municipalities with populations under one million, qualifying housing actions must also connect to existing public or community water and sewer systems, be located on a previously disturbed site, comply with non-residential-use limits, and satisfy unit caps that vary depending on local zoning and whether the site is in an urban area.
- Parks, trails, public schools, water infrastructure, and green infrastructure: Exemptions include public parks on previously disturbed sites; multi-use bicycle and pedestrian trails on previously disturbed sites; municipal water and sewer replacement, rehabilitation, or reconstruction projects, including lead service line replacement; sewer projects serving disadvantaged communities with inadequate sewage treatment systems; and retrofits of existing structures and appurtenant areas to incorporate green infrastructure.
- Hazardous-materials and Phase I Environmental Site Assessment certifications: This new exemption applies to certain housing and public school actions involving hazardous materials and environmental site reviews. It requires certifications relating to remediation or the absence of recognized environmental conditions in specified circumstances.
- “Previously Disturbed Site” Defined: The bill defines “previously disturbed site”—a lynchpin for a number of changes—to include sites substantially altered by existing, former, or demolished buildings or other specified uses, but it contains exclusions or limitations involving certain adjacent properties, floodplains, agricultural areas, and coastal erosion hazard areas.
- Deadlines: The amendments clarify deadlines for agency action.
- For applications seeking treatment as a qualified action, the agency responsible generally must determine eligibility within 120 days after receiving the application.
- Agencies must make a determination of significance as early as possible, but no more than one year after establishment of a lead agency.
- For actions involving permit or authorization applications, agencies must prepare and make available the environmental impact statement (EIS) within two years after an agency determines that a draft EIS is required, unless the agency extends the deadline in writing for only the additional time necessary.
- Statute of Limitations: The bill seeks to clarify the timing of SEQRA challenges, specifying that the statute of limitations begins to run when the agency determination approving or disapproving the action becomes final and binding.
Takeaways
When NYSDEC proposes regulations to implement the CLCPA, it may include expansive cap-and-invest provisions that will have material consequences for several industry sectors. Regulated entities and other stakeholders should review pending and planned permit applications, GHG analyses, project schedules, and SEQRA strategies considering the amendments to the Climate Act and SEQRA.
