Vermont, the state with the lowest overall carbon emissions in the country, has become a national leader in efforts to address climate change. But this year, lawmakers were subdued about further efforts to lower greenhouse gas emissions.

One reason was that the political climate had changed.

Democrats lost more seats in Vermont than anywhere else in the country last November. The state faced multiple lawsuits against its landmark plan to hold fossil fuel companies accountable for their contributions to a warming world. Gov. Phil Scott, a legion of heating fuel dealers and a media campaign run by a conservative super PAC convinced voters that the state’s plan to reduce its second largest source of fossil emissions — heating — was too expensive to be implemented.

“Everyone knew the plan was dead the day after the election,” said Matt Cota, a member of the Public Utility Commission’s Clean Heat Technical Advisory Group that studied the proposal, known as the clean heat standard.

At the national level, fossil fuels like coal, oil and gas — the largest drivers of climate change and increasingly expensive energy sources to produce and burn — strengthened their foothold in the U.S. economy when President Donald Trump declared an energy emergency on the first day of his second term.

In Vermont, meanwhile, action on climate quieted, and perhaps the state’s most comprehensive plan under consideration to reduce emissions entered a state of limbo. The clean heat standard, half a decade in the making, would have established a wonky credit market to regulate the heating of air and water in buildings like homes and hospitals. But it was neither adopted as law nor formally repealed this legislative session.

Instead, key lawmakers shuffled the plan into the dusty corners of committee. Advocates and lawmakers do not expect it to reemerge.

The program’s failure could leave the state with fewer options to reach the goals of the 2020 Global Warming Solutions Act, which legally mandates reducing emissions by 80% below 2005 levels by the midcentury. Critics say the state already missed the first deadline, and the first lawsuit against the state has already been filed.

Under the shadow of that deadline, why did the clean heat standard fail, and what might Vermont do next?

An incentive structure

Vermonters are among more than 10 million households, largely in New England and the Midwest, still dependent on heating fuels, like oil or propane, according to a May 2025 national report from RMI, an energy think tank. Most of the households that use heating fuels live in single-family homes and skew more rural, older and more likely to live on a fixed income.

The clean heat standard, also known as the Affordable Heat Act, was compelling because it relied on incentives. Instead of a simple tax, or fee, on heating bills, like the charge Vermonters see on their electric bills to fund efficiency programs, the program attempted to promote efficiency through a credit system.

“The first conversation was, how can we reward these heat fuel dealers performing this efficiency work, this good work to reduce greenhouse gas emissions, by creating an incentive structure?” Cota said.

Fuel dealers have long delivered the fossil fuels to heat individual homes through Vermont’s long winters. But these fuels and the people who distribute them are less regulated than other forms of energy like electricity. The standard would have created a registry that tracked fuel dealers and worked to help them acquire credits.

Each “clean heat credit” represented a unit of greenhouse gas emissions eliminated because of actions taken by fuel dealers. Details like how fuel dealers could earn such credits were still in the works, but the intention was to push fuel dealers to promote weatherization and more efficient heating systems like cold-weather heat pumps. Then customers could access state incentives to help pay for them. (Additional incentives of up to $2,000 for heat pumps once available through the 2022 Inflation Reduction Act are now on the Trump administration’s chopping block.)

Switching to more efficient heat pumps could reduce energy bills by an annual average of $990 in Vermont, according to the RMI report on heating fuels. Across the country, customers could save an average of $15,000 over the life of the heat pump. If all delivered fuels were replaced with heat pumps, the country would save nearly $8 billion in energy costs, according to the report.

But program expenses rose because of possible subsidies prioritizing low- and middle-income Vermonters. As fuel dealers looked at taking on the costs of the program, it seemed clear that some of those costs would have to be passed onto customers, according to a January report submitted by the Public Utility Commission. The kind of credit system had also never been done before, and Vermont would have had no other state’s model to rely upon, which also increased overhead costs.

“Modeling a complex sector-wide program is extremely difficult and relies on a number of assumptions that could vary widely from real-world implementation,” wrote the public utility commissioners in the January report to the Legislature. They told lawmakers their estimates should be taken as “very rough.”

Customers would pay approximately $0.08 more per gallon of fuel oil in 2026, according to the report, or about $56 for residents who bought an average of 700 gallons to heat their home. If customers continued to use fossil fuels instead of taking advantage of incentives to switch to other options, the cost could rise to $0.58 per gallon, or about $406 more by 2035 for the same amount of fuel.

For the first decade, the commission’s report estimated the program could cost the state, including those costs to customers, as much as $956 million. The commission did not recommend implementing it.

‘They just parked it’

While that number is large, whether it’s considered affordable depends on a number of factors like how Vermonters heat their homes, the flexibility of their spending, and whether they use state incentives to lower their fossil fuel use.

But the governor took the position that the plan was unaffordable no matter what. In 2022, Scott vetoed the bill’s first version, H.715, and that veto was sustained by a single vote in the House.

A year later, in May 2023, it became the Affordable Heat Act, or S.5, a bill that set up the clean heat standard for further study but did not implement the program. Scott again vetoed the bill, but this time he was overruled by the then Democratic supermajority in both chambers.

That new law, Act 18, gave the Public Utility Commission and two advisory groups 18 months to figure out the details. In the 2025 legislative session, once the commission issued its January report, little action was taken. Another bill, S.65, would have repealed the clean heat standard completely but never made it out of committee.

While the commission’s final report was in development, the conservative super PAC Americans for Prosperity, funded by the Koch brothers, launched a $60,000 digital and mailer campaign claiming the standard would “skyrocket” Vermonter’s utility bills and “wreak havoc on Vermonters’ wallets.”

That campaign skewed the definition of affordability and promoted misinformation, according to advocates of the law. But the Green Advocacy Project, a pro-clean heat group, contributed three times that — $180,000 — to a Vermont super PAC to boost candidates supporting the program.

But even that didn’t help incumbents like Chris Bray, the former Democratic chair of the Senate Committee on Natural Resources and Energy who served in the Legislature for more than a decade. He lost his November race. In early June, Bray said part of that loss had to do with the campaign against the clean heat standard.

“The fossil fuel industry was vehemently opposed,” Bray said. “It would’ve been the country’s first assessment on fossil fuels designed to look at their emissions impact and translate that into a variable fee.”

Bray had pushed back against the argument that the program was unaffordable. He asked lawmakers to consider not just the climate impacts but the volatile pricing of fossil fuels. During the winter of 2020 through the winter of 2023, the cost of heating oil more than doubled, according to numbers Bray compiled from the Department of Public Service and Joint Fiscal Office.

While the governor often cited a potential $4 per gallon increase in fuel costs, far more than what the final commission report concluded.

If he’d continued on as chair, Bray wanted to see his committee push the standard forward by working out wonky details like how much a credit would cost and how they could be obtained. But too many Democrats lost, he said, and the ones who remained were chastened by the governor’s claims that the program was unaffordable.

“They just parked it,” Bray said of Democrats.

There wasn’t enough movement on climate and environmental work this session because legislators were playing defense rather than going on the offensive and continuing to try and make progress, Bray added.

Sen. Anne Watson, D/P-Washington, who took over as chair of the Natural Resources and Energy Committee after Bray lost his seat, said the standard wasn’t a great fit for Vermont at this time. Because Vermont would be starting the standard from scratch, there were high overhead costs, and it would be easier if another state enacted the law first, she said.

“Nobody wanted to move forward with implementing it this session,” Watson said. But she largely blamed state leadership.

“It’s unfortunate that we’re limited by a governor who doesn’t want us to do the hard work of getting Vermonters off of expensive, price-volatile fossil fuels,” Watson said.

At a conference in June at the University of Vermont, Lt. Gov. John Rodgers repeated these talking points, claiming that consumers, not oil companies, would have to pay for the clean heat standard.

“Every oil company has said, ‘This is our business. If we have extra cost we have to pass it on to the consumer,’” Rodgers said in an interview afterward. “But there are people in the Legislature that are saying ‘oil companies are going to pay for it,’ and it’s just a false narrative.”

He said the Affordable Heat Act should be repealed because Vermonters couldn’t afford it.

When asked if paying roughly $50 a year on heating oil was unaffordable — which Vermonters would pay in 2026, according to the PUC — Rodgers said he would have to go back to the report.

“I thought it was much more than $0.08,” Rodgers said, adding that if there was a real benefit from the standard, he might consider $0.08 a gallon affordable.

‘There isn’t currently an active plan’

As Vermont creeps toward its self-imposed, legally binding emissions deadlines, pieces of its first plan to mitigate its contribution to climate change continue to fall away.

In 2021, a multistate pact to create a cap-and-invest program that would have reduced emissions from transportation, called the Transportation and Climate Initiative Program, crumbled. Another plan to phase out the use of gasoline-powered cars and trucks is under direct threat from the Trump administration. Now, the clean heat standard appears to be scratched off the list.

Last Tuesday, in a courthouse in Montpelier, Vermonters began to see the first skirmishes in what could be a long, drawn-out battle if the state doesn’t come up with new ideas for meeting its goal.

“There’s a mechanism in the Global Warming Solutions Act where there’s accountability for exactly this, where you have a governor obstinate against climate goals,” Sen. Watson said. “It’s played out in Massachusetts and maybe it needs to play out here.”

That mechanism is a citizen lawsuit.

Jenny Rushlow, an attorney in the clean energy and climate change program at the Conservation Law Foundation, successfully litigated that Massachusetts case.

Now, her group is in the first stages of a suit filed against Vermont’s Agency of Natural Resources, the state body in charge of implementing those reductions. The suit, filed in September 2024, alleged that the state was on track to miss the January 1, 2025, target to reduce emissions by 26% below 2005 levels.

The agency sought to dismiss that suit, and now both parties await the judge’s decision. If he denies that motion, the Conservation Law Foundation’s case — which argues that the review was so insufficient it was rendered invalid — would proceed, according to Elena Mihaly, the vice president for the organization in Vermont, after oral arguments on the motion.

There isn’t currently an active plan for how to reduce greenhouse gas emissions from the thermal sector at the level that’s required,” Rushlow said. “The clean heat standard was the focal point for reducing emissions from that sector, and it died under pressure from outside fossil fuel interests and misinformation about the cost of the program.”

But Mihaly said no part of this lawsuit hinges on whether the clean heat standard passed, nor could a judge siding favorably with her foundation force the Legislature to pass the standard or the Agency of Natural Resources to adopt it.

Instead, the latest focal point in the Global Warming Solutions Act is the new Climate Action Plan set to be published on July 1, which will reset the state’s priorities in reducing emissions. That plan is developed by a 23-member Climate Council legally obligated to produce the plan every four years. Now the council is considering a modified clean heat standard, according to Cota, who serves on the council.

While the clean heat standard could have been a key mechanism to help them meet the emissions goals of the Global Warming Solutions Act, “it was not ever going to be the silver bullet,” Watson said.