EPA Proposes Repeal of Power Plant GHG Emissions Standards

If finalized, the rule would eliminate both Obama- and Biden-era limits on GHG emissions from fossil fuel-fired power plants.

By Karl A. Karg, Stacey L. VanBelleghem, Nikki Buffa, Devin M. O’Connor, and G. Jack Mathews

On June 11, 2025, the US Environmental Protection Agency (EPA) released a proposed rule under the Clean Air Act (CAA) titled “Repeal of Greenhouse Gas Emissions Standards for Fossil Fuel-Fired Electric Generating Units” (the Proposed Repeal).

Under the current Obama- and Biden-era greenhouse gas (GHG) regulations, new fossil fuel-fired electric generating units (EGUs) are subject to GHG emissions standards. Certain existing fossil fuel-fired EGUs must reduce their GHG emissions rates by specific amounts over a period of years leading to 2032, and in some instances, these requirements depend on their planned retirement date.¹ (For more details, see this blog post.)

The current GHG regulations are subject to ongoing litigation in the US Court of Appeals for the District of Columbia, but those cases have been paused, pending EPA’s reconsideration of the challenged rules. In the interim, the Trump administration issued the Proposed Repeal to revoke the Obama and Biden administrations’ GHG emission rules.

The Proposed Repeal

The Proposed Repeal outlines and seeks comment on alternative grounds for repeal. The primary approach would repeal both the Obama and Biden administrations’ GHG emissions rules for new and existing EGUs. A secondary, alternative approach would repeal the emissions guidelines for existing coal-fired power plants, the emissions standards for coal-fired power plants undertaking a large modification, and the emissions standards for new base load combustion turbines (i.e., natural gas-fired EGUs), while leaving in place certain other standards for new sources. The Proposed Repeal’s inclusion of these options will provide EPA some flexibility on how to proceed after gathering public comment.

Primary Approach

Under the primary approach, EPA would make a finding that GHG emissions from fossil fuel-fired power plants “do not contribute significantly to dangerous air pollution.” In contrast to previous GHG power plant rules, EPA now interprets CAA Section 111 to require EPA to make this finding specifically for a source category before EPA can regulate GHGs for that category.² EPA proposes this interpretive change, pointing to contextual arguments regarding certain provisions of the CAA and prior EPA practice. EPA also notes and seeks comment on certain potential legal considerations for its reinterpretation, including reliance interests on prior interpretations, the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo,³ and the major questions doctrine.

After describing this statutory interpretation in the Proposed Repeal, EPA explains its proposed finding that fossil fuel-fired EGUs do not significantly contribute to dangerous air pollution. As an initial matter, in a nod to Loper Bright, EPA states that CAA Section 111 delegates authority and confers discretion to EPA to consider policy issues in determining the meaning of “significantly contributes,” including cost and effectiveness of emissions controls, impacts on industry, and impacts of emissions on public health and welfare.

EPA’s proposed findings include that GHGs are global pollutants and that US power plants’ emissions are low in comparison to global concentrations of GHGs.⁴ EPA proposes finding that fossil fuel-fired EGUs do not significantly contribute to dangerous air pollution, and therefore proposes to “repeal all [GHG] emission standards for fossil fuel-fired power plants.”⁵

Secondary Approach

As an alternative, the Proposed Repeal would revoke a more specific set of requirements that are based on 90% carbon capture and sequestration/storage (CCS) as a Best System of Emission Reductions (BSER)⁶ at existing fossil fuel-fired steam EGUs that intend to operate in the longer-term, coal-fired steam EGUs undertaking large modifications, and new base load stationary combustion turbines. EPA concludes that 90% CCS is not BSER for the relevant EGUs because “it has not been adequately demonstrated and because the costs are not reasonable.”⁷

EPA also proposes that 40% co-firing of natural gas is not BSER for coal-fired power plants that intend to operate in the medium term.⁸ EPA determines that coal-fired power plants co-firing natural gas are an inefficient use of natural gas and constitute generation shifting, which the Supreme Court has previously found to exceed EPA’s statutory authority under CAA Section 111.⁹ Therefore, EPA is proposing to repeal the previous BSER determinations along with any emissions guideline requirements and associated presumptive performance standards.¹⁰ EPA would repeal existing emissions guidelines related to natural gas- and oil-fired steam EGUs as well, because they “comprise a relatively small part of the source category” such that any benefit from reductions would be offset by the cost of preparing state plans.¹¹ This would eliminate or reduce most of the performance targets for the power sector.

Under either approach, EPA’s regulation of GHGs at power plants would be curtailed. The primary approach is a more absolute declaration that the requirements of CAA Section 111 have not been met and that EPA’s previous attempts to regulate GHGs in the power sector were invalid. The secondary approach does not make the same statutory declaration, but it does eliminate much of the practical impact by declaring that CCS and forcing natural gas co-firing at coal-fired plants are not BSER and may exceed EPA’s authority Section 111 as well. The secondary approach would eliminate or reduce most of the performance targets for the power sector with no clear indication from EPA that they would replace them in the near term.

Potential Impact

The Proposed Repeal follows the Trump administration’s January 20, 2025, executive order titled “Unleashing American Energy,” which directs all federal agencies to review and identify actions that may impose undue burdens on domestic energy production.

If enacted, the Proposed Repeal will have a significant impact on many existing and future power-generation facilities that are otherwise facing significant compliance obligations to reduce their operations, offset their emissions, and/or implement new technologies such as CCS. EPA estimates that the Proposed Repeal will create compliance cost savings of up to $19 billion.¹² EPA’s regulatory impact analysis also includes an assessment of estimated foregone health co-benefits associated with anticipated criteria pollutant reductions related to the rules EPA proposes to revoke.¹³

EPA’s economic and other technical considerations, along with the proposed interpretive findings, are likely to face extensive public comment and litigation challenges if they are finalized.

Next Steps

EPA will hold a public hearing 15 days after the Proposed Repeal is published in the Federal Register and will accept comments on the proposal until 45 days after publication in the Federal Register.¹⁴

Latham & Watkins will continue to monitor developments around the Proposed Repeal.

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