EPA Proposes Repeal of Greenhouse Gas Standards for Power Plants

The US Environmental Protection Agency recently issued a proposed rule and accompanying press release announcing its intent to repeal both the 2015 greenhouse gas emissions standards for new fossil fuel-fired power plants issued during the Obama administration and the 2024 rule for new and existing power plants issued during the Biden administration.

Grounded in a reevaluation of the Clean Air Act (CAA) and recent US Supreme Court precedent, the US Environmental Protection Agency’s (EPA’s) proposal would rescind the 2015 New Source Performance Standards (NSPS) and the 2024 Carbon Pollution Standards (CPS), potentially redefining the scope of federal authority to regulate carbon dioxide emissions from the power sector. If finalized, this action would constitute a significant rollback of federal climate regulations impacting fossil fuel-based electricity generation.

According to EPA estimates, the proposed repeal would yield approximately $19 billion in regulatory cost savings over a 20-year period, or roughly $1.2 billion annually beginning in 2026. These savings are largely attributed to reduced compliance costs, the elimination of carbon capture and storage (CCS) requirements, and the avoidance of operational modifications to meet stringent emissions targets.

BACKGROUND AND LEGAL CONTEXT

Greenhouse gas (GHG) regulation for the power sector has long been a flashpoint in environmental and administrative law. The EPA first sought to limit power plant GHG emissions through the 2015 Clean Power Plan (CPP), which was subsequently struck down in West Virginia v. EPA, 597 US 697 (2022). There, the Supreme Court held that the EPA had overstepped its authority by attempting to restructure the nation’s electricity generation mix—a matter of “major questions” requiring clear congressional authorization.

Following this decision, the Biden administration promulgated the 2024 CPS, imposing more targeted but still stringent GHG standards on both new and existing fossil fuel-fired power plants, relying heavily on CCS and fuel-switching mandates.

In response to President Trump’s executive orders promoting energy independence and regulatory streamlining, EPA Administrator Lee Zeldin is now seeking to repeal the regulatory framework for GHG emissions from the power sector.

KEY ELEMENTS OF THE PROPOSED REPEAL

The EPA’s June 2025 proposal outlines several major regulatory actions and interpretive shifts, including the following:

• Repeal of the 2015 and 2024 GHG Standards: The EPA proposes to rescind both the 2015 NSPS and the 2024 CPS for fossil fuel-fired power plants, eliminating existing federal GHG emissions limits for new, modified, and existing units.
• Withdrawal of CCS-Based Requirements: The proposal eliminates requirements for CCS on new combustion turbines and modified coal-fired units. The agency cites concerns regarding CCS’s technological readiness, cost-effectiveness, and legal defensibility.
• Repeal of Emission Guidelines for Existing Units: The EPA proposes to remove emission guidelines targeting existing steam-generating units, particularly those encouraging or requiring fuel-switching (e.g., from coal to natural gas). The agency argues that such measures may violate the Supreme Court’s limitations on generation-shifting.
• Reevaluation of Statutory Authority: The EPA asserts that regulation of GHG emissions under CAA Section 111 requires a finding that emissions from the source category “contribute significantly to dangerous air pollution.” The agency proposes that fossil fuel-fired power plants do not meet this threshold, noting their declining share of global GHG emissions and the limited domestic public health impact attributable to them.
• Efficiency-Based Alternative Standards: As an alternative, the EPA seeks comment on an efficiency-based regulatory approach for new natural gas-fired power plants, which would forgo CCS mandates while maintaining some performance-based criteria.

These proposed repeals collectively roll back the efforts of prior administrations to reduce GHG emissions from the power sector, reduce operating costs of existing fossil-fuel power plants, and reduce regulatory obstacles to the construction of new fossil-fuel power plants.

STATUTORY REASONING

The agency states that Section 111 of the CAA requires a specific finding that a source category “contributes significantly to dangerous air pollution” as a prerequisite for regulation. The EPA is formally proposing that GHG emissions from fossil fuel-fired power plants do not meet this threshold, citing the following:

• The relatively small and declining share of GHG emissions from the US power sector
• Limited public health benefits attributable to marginal domestic reductions
• The lack of adequately demonstrated, cost-reasonable emissions controls
• National policy priorities favoring domestic energy production and grid reliability

COMMENTS

Stakeholders are encouraged to review the full proposal and submit public comments by 45 days after the date of publication in the Federal Register. The EPA has indicated that it is particularly interested in feedback on:

• The feasibility and merits of efficiency-based alternatives
• The role of CCS
• The agency’s statutory interpretation regarding “significant contribution” under the CAA

HOW WE CAN HELP

We expect additional executive, regulatory, and legislative action in the next few weeks and months to implement the US administration’s energy policy. Morgan Lewis will provide additional analysis and guidance as these policies are being formed and once implemented. Please visit Morgan Lewis’s energy blogs Power & Pipes (FERC, CF, DOE, State), Up and Atom (Nuclear), and our subscriptions page for updates on the US administration’s energy policies or contact Juliana Israel to be added to Morgan Lewis’s energy and project development distribution list.

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