EPA’s long-awaited proposal would set aggressive emission reduction targets with many different approaches and timelines to achieve them.

By Stacey L. VanBelleghem and Jennifer Garlock

On May 11, 2023, the US Environmental Protection Agency (EPA) released its proposed rule[1] to regulate carbon dioxide (CO2) emissions from electric generating units (EGUs) at power plants under Section 111 of the Clean Air Act (CAA) (the Power Plant GHG Rule or the Proposed Rule).

The Power Plant GHG Rule consists of five proposed actions:

  1. determinations and updates to current CO2 standards of performance (promulgated in 2015) for new and reconstructed stationary combustion turbines (generally natural gas-fired) pursuant to Section 111(b) of the CAA;
  2. determinations and updates to current CO2 standards of performance (promulgated in 2015) for modified fossil fuel-fired steam-generating EGUs (generally coal-fired) pursuant to Section 111(b) of the CAA;
  3. determinations and CO2 emission guidelines for existing fossil fuel-fired steam-generating EGUs (generally coal-fired) pursuant to Section 111(d) of the CAA;
  4. determinations and CO2 emission guidelines for large, frequently used existing fossil fuel-fired stationary combustion turbines (generally natural gas-fired) pursuant to Section 111(d) of the CAA; and
  5. a repeal of the Trump-era Affordable Clean Energy (ACE) Rule.

EPA is also soliciting comment on a number of topics, including potential options and emission guidelines for existing fossil fuel-fired stationary combustion turbines not otherwise covered by the Proposed Rule (generally natural gas-fired units that are either smaller or less frequently used).

The decision will limit EPA’s options for future regulation of existing power plant GHG emissions and may have broader implications for other federal agency rulemakings.

By Stacey L. VanBelleghem, Karl A. Karg, and Malorie R. Medellin

On June 30, 2022, the US Supreme Court issued its long-awaited ruling in West Virginia v. EPA — the consolidated petitions addressing EPA’s authority to regulate existing power plant greenhouse gas (GHG) emissions under Section 111(d) of the Clean Air Act (CAA). In a 6-3 opinion drafted by Chief Justice Roberts, the Court ruled against EPA, holding that EPA’s attempt to force an overall shift in power generation from higher-emitting to lower-emitting sources exceeded EPA’s statutory authority. Indeed, the Court noted that such a sweeping transformation of the nation’s power sector implicated a “major question” requiring explicit congressional authorization, that the Court argued the CAA did not provide.

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.

By Stacey L. VanBelleghem and Devin M. O’Connor

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).[1]

The ACE Rule (summarized in this Latham blog post), took three key actions:

  1. 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.
  2. It established EGU heat rate improvements as the BSER for CO2 emissions, identifying much weaker targets for these existing sources.
  3. It updated the foundational implementing rules for existing source emissions guidelines under Section 111(d) by extending compliance timelines.

By Claudia O’Brien, Bob Wyman, Joel Beauvais, Stacey VanBelleghem, Bridget Reineking, and Kimberly Leefatt

On March 28, 2017, President Donald Trump signed an executive order (EO) directing executive departments and agencies to review regulations that potentially burden the development or use of domestically-produced energy resources. This EO sets the stage for what could become a series of sweeping reversals of the Obama Administration’s greenhouse gas (GHG) reduction and climate change polices. In particular, the order lays the groundwork for reform of the Clean Power Plan (CPP) and the new source pollution standards for new, modified and reconstructed power plants (NSPS).

The issuance of this EO kicks off a long and complex process for EPA to review both the CPP and NSPS, draft and publish proposals to revise or rescind the rules, accept notice and comment on the proposals, address comments on the proposals, and then issue final rules. Regardless of whether EPA proposes to suspend, revise, or rescind the rules, legal challenges are sure to follow. The outcome of these rulemakings and subsequent litigation will be consequential for the future of federal regulation of GHGs under the Clean Air Act (CAA).

By Jean-Philippe Brisson, Josh Bledsoe, Michael Dreibelbis and Andrew Westgate

On July 12, 2016, the California Air Resources Board (CARB) proposed amendments to the California Cap-and-Trade Program (17 CCR 95800 et. seq.) for the first time since 2014. The amendments include major substantive changes to compliance requirements as well as new program initiatives such as post-2020 caps, additional linking, and Clean Power Plan (CPP) compliance provisions.

In an unusual move, CARB has provided a “Preliminary Draft Proposed Regulation Order and Staff Report” prior to formally initiating the rulemaking. CARB will release a draft of the formal regulatory package on July 19 for Office of Administrative Law review prior to opening the formal comment period. “Final” draft documents will be posted on August 2, and the formal public comment period will begin on August 5.

2021-2031 Emission Cap

CARB has proposed to set emissions caps for 2021 to 2031. The caps decline annually at a linear rate from 2020 to 2030. CARB set the post-2020 caps by calculating the ratio of the 2020 cap in the current regulation (334.2 MMTCO2e) to the statewide GHG target for 2020 (431 MMTCO2e) as set forth in the Scoping Plan. CARB then extrapolates that ratio—77.5 percent—using the goal of 258.6 MMTCO2e established by Governor Jerry Brown in Executive Order B-30-15. The final cap for the 2030 using this methodology is 200.5 MMTCO2e.