(Paper updated May 10, 2024)
On April 25, 2024, EPA finalized its rule establishing greenhouse gas (GHG) standards for power plants under section 111 of the Clean Air Act (CAA). The rule includes four separate and severable components:
- Existing coal-fired power plants: CO2 emission standards for existing coal-fired boilers operating long-term or medium-term (retiring units exempted), and natural gas and oil-fired boilers (based on subcategories of low, intermediate, and baseload);
- New gas-fired plants: CO2 emission standards for low, intermediate, and baseload subcategories;
- New, modified, and reconstructed coal-fired plants: Revised CO2 emission standards for coal-fired units that undertake a large modification (i.e., increases hourly emission rate by more than 10%) to mirror the emission guidelines for existing coal-fired steam units;
- Repeal of Affordable Clean Energy (ACE): Repeal of the Trump era rule, which had emission guidelines based on heat rate improvements.
Fossil fuel-fired power plants are the largest stationary source of GHG pollution in the US. EPA estimates that the rule will reduce 1.38 billion metric tons of CO2 emissions through 2047 along with PM2.5, SO2, and NOx, resulting in climate and public health net benefits of up to $370 billion.
EPA explains that the final standards are “based on available and cost-effective technologies that directly reduce GHG emissions from these sources.” EPA notes that the power sector has “a range of cost-effective technologies and approaches” to reduce GHG emissions available, “including carbon capture and sequestration/storage (CCS), co-firing with less GHG-intensive fuels, and more efficient generation.” The final rule sets an emission rate for each subcategory, which enables power plants to use any alternative fuel or technology provided it meets the applicable emission rate.
In this analysis, we review the legal basis for the final rule and summarize the final standards focusing on the standards for existing coal-fired power plants and new natural gas-fired power plants, their compliance pathways, and the regulatory mechanisms included in the final rule in response to reliability concerns by stakeholders. We also look at how EPA responds to West Virginia v. EPA and anticipated legal challenges to the final rule.