2025 wins and emerging trends in state climate policy

While much of the climate and energy conversation in 2025 focused on federal action, some of the most consequential progress occurred at the state level. In our recent webinar, “2025 Wins and Trends in State Climate Policy,” Clean Air Task Force (CATF) staff from across the country shared insights on where states are making progress, the headwinds they face, and what opportunities lie ahead in 2026.

Below are key takeaways from that conversation, drawing on examples from each region of the United States.

State climate action is critical

State governments make daily decisions that shape both near-term and long-term emissions outcomes—through legislation, permitting, regulatory implementation, and grant programs. States develop policy innovations that can spread to other states and scale to the federal level.

State leadership is especially critical during periods of federal uncertainty and gridlock. State policy supports market stability, provides long-term signals for investment in clean technologies, and continues progress on emissions reductions. U.S. states also have an important role internationally through collaborations with national and subnational governments, participation and presence in international climate conferences, and demonstration of continued progress on emissions reductions.

Dynamics affecting state climate policy

Across the country, several dynamics are shaping state climate and energy policy:

• Affordability: Rising costs for electricity, housing, healthcare, and food have made affordability a central household and political issue.
• Rapid load growth: Data centers, AI, and electrification are driving unprecedented demand for electricity, requiring additional generation and transmission.
• Federal uncertainty and funding cuts: Legal challenges to regulations, funding cuts, and potential limits on state authority are complicating long-term planning across industries.
• Political polarization: Climate and energy policy must contend with an environment of ongoing political polarization and strengthened skepticism toward government and institutions.

National trends in state climate policy

Despite these challenging dynamics, states continue to act, and in many cases, lead. Several trends emerged across regions in 2025, which provide a strong foundation for climate policy in 2026.

• Continued state leadership, as many governors and legislatures continue to advance policies that reduce emissions.
• Deployment of innovative technologies, with many state leaders in both parties supporting zero- or low-emission technologies such as nuclear, geothermal, and carbon capture.
• Growing support for clean firm power, including nuclear, geothermal, and carbon capture, as states confront reliability and affordability challenges.
• Increased focus on renewable energy deployment, through improved state/local siting frameworks, permitting reform, and pushes to utilize expiring federal tax credits.
• Renewed momentum on nuclear energy, including repealing moratoria, increasing state funding, investing in workforce development, and planning new projects.
• Affordability-centered climate framing, with climate policies framed in the context of affordability, reliability, and economic competitiveness.
• Budgetary challenges, resulting from federal funding cuts to states, which may limit new state funding and jeopardize traditional funding streams.

Regional highlights

The following regional highlights cover topics that CATF or CATF Action was involved in. These highlights are meant to be illustrative, not comprehensive, as there have been important state policy actions on building efficiency, electric vehicles, resilience, and other topics not discussed here.

Northeast: Recalibration and clean firm focus

In New York, ambitious climate targets collided with cost pressures and federal barriers to offshore wind. While the state is now expected to miss its 2030 renewable target, the state’s latest energy plan shows it remains on track for a 100% clean grid by 2040—largely due to a renewed emphasis on nuclear power. For the first time, New York explicitly assessed nuclear power in its power system modeling, and it found that adding additional nuclear capacity could make it easier and less costly to meet the 2040 target. The state is supporting existing reactors, planning new nuclear capacity, investing in workforce development, and developing a statewide nuclear master plan that will be finalized by the end of 2026.

Pennsylvania faced legislative gridlock and ultimately withdrew from the Regional Greenhouse Gas Initiative, leaving a policy gap for grid decarbonization. The state environmental agency launched a federally funded $396 million industrial decarbonization grant program that may catalyze one of the largest industrial clean energy clusters in the country.

2025 saw increased interest in nuclear power in many states across the Northeast. For example, New Jersey worked on legislation to advance nuclear and other clean technologies and newly elected-Gov. Mickie Sherril has indicated she will continue to pursue those goals; Massachusetts is developing a nuclear roadmap that will be finalized in April 2026; and several states are engaged in a multistate coordination effort on advanced nuclear, led by the National Association of State Energy Officials.

Southeast: Load growth drives the conversation

Climate and clean energy policy in Virginia and North Carolina, much like the rest of the region, was shaped by projections of surging load growth. Forecasts of increased electricity demand, driven largely by data centers, have made reliability and system planning central policy concerns. Across the region, policymakers are increasingly open to clean firm resources as part of a balanced, affordable clean energy mix. At the same time, utilities like Duke Energy and Dominion are pushing for new natural gas peaker plants to meet demand.

Virginia took steps to classify fusion energy as carbon-free and reformed utility rate structures to better allocate costs from large energy users. North Carolina, however, passed a law eliminating the state’s requirement for 70% carbon dioxide emissions reductions by 2030, while preserving the 2050 carbon neutrality requirement.

Gulf Coast: Economic leadership on innovation

In Louisiana and Texas, clean energy policy is driven by economic competitiveness, industrial leadership, and reliability interests. In both states, political and local opposition to various clean energy technologies continues to impact the energy discourse. Often this opposition is premised around safety concerns, property rights, and public trust, which has led to several state policies that are more restrictive of some clean technologies such as solar, wind, and carbon capture and sequestration. But there has still been meaningful progress.

Louisiana advanced clean hydrogen policy through a bipartisan task force, issued its first Class VI CO₂ storage permit, reorganized energy governance, and moved to streamline permitting for advanced nuclear projects.

Texas enacted one of the most ambitious nuclear policy packages in the country, establishing a dedicated nuclear office, permitting officer, and a $350 million deployment fund. The state also made major progress on geothermal policy through financial and regulatory support, and Texas recently was granted primacy over Class VI carbon sequestration wells from the EPA.

Midwest: Nuclear resurgence and industrial decarbonization

Illinois saw nuclear energy become politically viable again, driven by affordability, reliability, and a 100% carbon free energy requirement by 2050. The state fully lifted its nuclear moratorium, passed a major grid reliability and affordability package, invested heavily in public transit, and advanced protections for critical aquifers amid carbon capture debates.

Michigan experienced slower legislative progress due to divided government, but nuclear and carbon capture gained bipartisan traction. The restart of the Palisades nuclear plant – the first reactor restart in U.S. history – symbolized the region’s renewed nuclear momentum. The legislature also began considering a low carbon fuels standard.

West: Implementation and infrastructure take center stage

Colorado passed several clean energy-related bills during the 2025 session. This includes legislation to support the deployment of advanced nuclear technology to meet the state’s clean electricity goal and to modernize state regulation to accommodate next-generation geothermal and carbon capture technologies. Another new law seeks to accelerate transmission buildout by co-locating new transmission lines along existing rights of way, like highways, to avoid potential conflicts with private landowners and wildlife habitat.

New Mexico passed bills during its 2025 legislative session that advanced carbon capture rules, increased geothermal funding, modernized the grid, and leveraged its energy revenues to fund climate programs, including a newly established $210 million Community Benefit Fund for climate projects.

Washington’s new governor hit the ground running by signing bills that streamlined permitting for fusion and updated the state’s low-carbon fuel standard. Washington has a 100% by 2045 clean electricity standard but is facing budget constraints and other obstacles such as transmission bottlenecks and other grid infrastructure issues. The state advanced important administrative steps on sustainable aviation fuel, forest carbon offsets, and a geothermal energy collaborative process.

California: Balancing climate ambition and affordability

California had one of its most consequential climate years in recent memory, despite intense federal pressure and scrutiny of its climate programs and regulatory frameworks. This year’s legislative session was defined by efforts to pair climate ambition with affordability, with major bills aimed at cutting costs, stabilizing markets, and advancing clean energy deployment. Policy wins included transmission financing reform to lower costs, regional grid coordination, reauthorization of the cap-and-invest program through 2045, streamlined geothermal permitting, and lifting the moratorium on intrastate carbon dioxide transport. The 2025 legislative session showed that California can sustain climate progress even in a challenging political and economic environment.

What to watch in 2026

As we look ahead to 2026, states will face a mix of headwinds and tailwinds when approaching climate and clean energy policy.

• Ongoing concerns about affordability and the need to address it directly when discussing existing and new climate and clean energy policies.
• Impacts of AI on load growth, electricity costs, and local economies, as well as public sentiment about AI.
• Momentum gained by increased deployment of innovative technologies with bipartisan support (e.g., geothermal, nuclear, fusion, and transmission/grid upgrades) tempered with uncertainty for those technologies created by federal legislative and regulatory actions.
• 2026 elections, including 36 governors, thousands of state legislators, federal House and Senate, and utilities commissioners across nine states, including Louisiana.
• Efforts to weaken state authorities for energy and climate policy.

Across regions, states are demonstrating that climate progress does not require uniform politics or unlimited budgets. Progress can be made with clear priorities, durable policy signals, and a willingness to innovate.