EPA Set to Roll Back Power Plant Emissions Rules, Signaling Major Shift in Air Policy

On June 6, the White House Office of Management and Budget completed its interagency review of two major EPA rule proposals. This clears the way for EPA to publish new rules that would reverse key portions of the Biden administration’s air quality regulations affecting the power sector.

GHG Rule: Limits on Stationary Sources in Jeopardy

The first proposal would eliminate greenhouse gas limits for coal and gas-fired power plants. It reportedly argues that GHG emissions from these facilities do not “significantly” endanger public health, a legal threshold used to justify Clean Air Act regulation. If adopted, this interpretation could block EPA from setting any future GHG standards for stationary sources under Section 111.

Legal experts and environmental groups are warning that this approach breaks with longstanding precedent. Since the 1970s, EPA has regulated emissions from listed source categories without requiring pollutant-by-pollutant significance findings. Power plants remain the largest stationary source of GHG emissions in the U.S., making this policy shift particularly consequential.

MATS Rule: Mercury Standards Also Under Review

EPA is also preparing to roll back the Biden-era update to the Mercury and Air Toxics Standards (MATS). That rule had tightened emissions standards for lignite coal units and required continuous monitoring of mercury and other toxic emissions.

Critics of the rollback argue that EPA justified the 2023 rule with both improved control technologies and public health data. However, industry groups have questioned the reliability and cost-effectiveness of the required technologies. Many also dispute whether the rule is necessary without a formal finding of “residual risk” to public health.

Exemptions Already Granted to Dozens of Units

Even before these formal rollbacks, the administration has already exempted nearly 50 coal-fired units from complying with the stricter MATS rule. The exemptions, affecting both major utilities and rural cooperatives, were granted based on energy security concerns. The White House cited risks of plant shutdowns, grid instability, and job losses if compliance moved forward on the original timeline.

What to Expect: Legal and Regulatory Uncertainty Ahead

Both rulemakings are expected to face legal challenges. Environmental advocates are likely to argue that the proposals violate the Clean Air Act and deviate from decades of agency practice. Meanwhile, any attempt to reopen EPA’s original “endangerment finding” could have ripple effects across other emissions rules, including those affecting mobile sources.

For the power sector, these proposed changes represent a significant shift in regulatory posture. While they may ease compliance burdens in the near term, they also introduce uncertainty that could complicate investment planning and long-term carbon strategy. Stakeholders should follow these developments closely as the proposals move into the public comment phase.