The decision clears a path for President Biden’s climate priorities, striking down a Trump Administration rule that had repealed the Obama Administration’s power plant greenhouse gas regulations.
On January 19, 2021, on the eve of President Biden’s inauguration, in American Lung Association, et al. v. EPA, the US Court of Appeals for the District of Columbia Circuit overturned the Environmental Protection Agency’s (EPA’s) Affordable Clean Energy (ACE) Rule, which sought to replace the Obama Administration’s Clean Power Plan (CPP). Both rules would regulate carbon dioxide (CO2) emissions from existing electric generating units (EGUs) under Section 111(d) of the Clean Air Act (CAA).
The ACE Rule (summarized in this Latham blog post), took three key actions:
- It formally repealed the Obama Administration’s CPP, finding that the CPP exceeded the EPA’s statutory authority by employing generation-shifting (shifting electric generation from higher to lower emitting sources) as a Best System of Emission Reduction (BSER). In the ACE Rule, the EPA concluded that the agency’s authority to define BSER is limited to measures that can be applied “to or at” an individual stationary source, that generation-shifting conflicts with the CAA’s unambiguous statutory requirement, and the ACE Rule interpretation is the only permissible reading of the statute.
- It established EGU heat rate improvements as the BSER for CO2 emissions, identifying much weaker targets for these existing sources.
- It updated the foundational implementing rules for existing source emissions guidelines under Section 111(d) by extending compliance timelines.