Power plant emissions are a significant contributor to greenhouse gas (GHG) emissions and a significant threat to the environment, public health, and the economy. In the US, electricity generation produces approximately 25% of the nation’s greenhouse gasses each year—about 1.5 million metric tonnes of CO2. A proposed Environmental Protection Agency (EPA) rule on power plant emissions will likely play a crucial role in reducing GHG emissions and protecting the environment.

Aside from the climate impacts, GHG emissions have a significant impact on public health. Power plant emissions, including particulate matter (PM), nitrogen oxides (NOx), sulfur dioxide (SO2), and mercury, are associated with a wide range of health problems, including asthma, lung cancer, heart disease, and premature death. These emissions disproportionately affect low-income communities and communities of color, where power plants are often located.

How the EPA Currently Regulates Power Plant Emissions

The EPA already plays a significant role in regulating power plant emissions. Under the Clean Air Act, the EPA has authority under two different sections to regulate power plant emissions: Section 111(b) for new sources and Section 111(d) for existing sources.

Under Section 111(b), the EPA is directed to develop federal “standards of performance” for new, modified, and reconstructed stationary sources of air pollution, called New Source Performance Standards. Once EPA promulgates the New Source Performance Standards, Section 111(d) requires the EPA to promulgate regulations for existing sources. It also lays out procedures for states to submit plans establishing performance standards for existing sources that would otherwise be subject to New Source Performance Standards if they were new, barring an exclusion under Section 111(d).

What is the purpose of the proposed EPA rule?

The new proposed rule is designed to effectively zero out power-sector emissions by 2040 while giving the operators of coal and gas plants options on how to reduce the emissions. The proposed rules follow previous attempts at regulating emissions from the power sector, including the Obama-era Clean Power Plan as well as the Trump-era Affordable Clean Energy rule—both of which faced legal challenges and never went into effect. Ultimately, the challenge to the Clean Power Plan reached the Supreme Court last year in West Virginia v. EPA, where the court struck down the rule.

In West Virginia vs. EPA, the court’s majority held that the manner of regulation in the Clean Power Plan exceeded the EPA’s authority under the Clean Air Act by focusing on sector-wide emissions caps. Some critics of the Clean Power Plan cried foul on this approach, characterizing it as overly strict “command and control” regulation. In response to that ruling, the new proposed rules focus on technologies that regulate emissions "within the fenceline" of each individual facility, rather than treating the power sector as a single system.

The technology options detailed in the new draft ruling include installing carbon capture equipment, cofiring hydrogen, or reducing capacity factors. Existing plants may also choose to permanently cease operations by certain dates in lieu of installing pollution-control measures.

The options set forth in the proposed rule have become much more affordable and available because of technical advancements, commercial developments, and policy interventions in recent years. The U.S. Department of Energy has invested billions of dollars in research, development, and demonstration efforts focused on carbon capture, utilization, and storage. These substantial investments have provided compelling evidence of the safe and effective application of carbon capture, utilization, and storage in power generation. Those investments and incentives have been further accelerated with laws like the Energy Policy Act of 2020, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act.

These advancements have led to carbon capture performance improvements and price decreases, and allow an effective carbon capture mandate that is much more reasonable and consistent with the Clean Air Act—a contrast from the 2015 Clean Power Plan, when carbon capture technology hadn't yet been proven to the point it could be required as a “best system of emission reduction.”

Potential obstacles facing the new EPA rules

While many questions remain, one critical question is: Will the expense of installing carbon capture or hydrogen technology be deemed eligible for cost recovery? State public utility commissions have to balance consumer cost concerns with legislative and regulatory requirements, and the new EPA rule could allow regulated utilities, municipal power generators, and rural power co-ops to recover the capital and operating costs of compliance. The actual costs to ratepayers are expected to be modest given the price declines we’ve seen for the technology and the fact that industry analysts expect prices to continue to come down in the coming years as the price of capture drops and storage infrastructure expands.

Costs and viability will also depend on whether new CO2 pipeline and storage infrastructure is permitted and built. Once operators have captured CO2, it must be moved to locations where it can be safely sequestered or put to beneficial use. Recent Congressional action, including the Infrastructure Investment and Jobs Act, has supercharged the growing carbon management industry and the US Department of Energy continues to make investments in the space. Congress will need to ensure the EPA has the staff and resources necessary to review permit applications for Class VI carbon sequestration wells, as well as work with states that wish to seek Primary Enforcement Authority for the Underground Injection Control.

Beyond ensuring our permitting agencies have the resources necessary to review and process applications, we should ensure clarity around the responsibility of the permitting of carbon dioxide pipelines, including clearly assigning jurisdiction to the Federal Energy Regulatory Commission or another appropriate agency (e.g., the U.S. Department of Energy, Bureau of Land Management, or the U.S. Department of Transportation).

Ultimately, if policymakers fail to implement smart and comprehensive carbon management policies, the U.S. power sector risks missing climate goals. The urgency of addressing climate change demands a proactive and comprehensive approach to carbon management.

Positive impact of the new EPA rules

The downstream benefits of decarbonizing the power sector include a projected cut of 617 million metric tons of CO2 through 2042, along with a substantial reduction of conventional pollutants, such as particulates, mercury, and sulfur dioxide. Aside from the environmental benefits of reduced CO2, the EPA expects the rule to have a positive impact on public health, including reduced asthma rates, hospitalizations, and premature deaths. Decarbonizing the power sector also helps companies achieve carbon neutrality by reducing their scope 2 emissions (indirect emissions generated from electricity purchased for business operations). By easing the burden of emission reductions, companies can more easily align their operations with sustainability goals and reduce their overall carbon footprint.

The EPA's new rule on power plant emissions is critical for protecting public health, the environment, and the economy. The rule will play a crucial role in reducing GHG emissions and is part of a larger transition to a clean energy economy. By regulating power plant emissions in this manner, the EPA can help address the urgent threat of climate change and protect the health and well-being of all Americans.