Regulatory Shift Underway: EPA Moves to Roll Back Key Climate and Air Toxics Standards.

On June 11, the Environmental Protection Agency announced two major rule proposals that would undo cornerstone climate and air toxics regulations for fossil fuel-fired power plants. These proposals would repeal both the Biden-era greenhouse gas (GHG) standards issued in 2024 and recent amendments to the Mercury and Air Toxics Standards (MATS).

According to EPA estimates, the changes could reduce regulatory costs for the power sector by over $20 billion across the next two decades. The agency frames the move as a course correction aimed at reducing energy costs and supporting reliable electricity generation. The proposals come after the Supreme Court’s West Virginia v. EPA decision limited the agency’s authority to enforce broad energy transitions through the Clean Air Act.

Greenhouse Gas Standards: Section 111 Reconsidered

EPA is proposing to repeal the 2024 rule that placed GHG limits on new and existing fossil fuel-fired power plants. The agency also seeks to withdraw the 2015 standards adopted during the Obama administration. Both sets of rules were grounded in Section 111 of the Clean Air Act.

EPA now argues that emissions from fossil fuel-fired power plants do not "significantly contribute" to dangerous air pollution within the meaning of the statute. The agency also says that the Clean Air Act requires a formal finding of harm before regulating GHGs in this sector. Under this interpretation, EPA would no longer pursue carbon capture mandates or fuel-switching requirements for new or modified combustion units.

If finalized, the repeal would eliminate GHG-related compliance burdens that many utilities have cited as costly and legally uncertain. Estimated savings could reach $1.2 billion annually starting in 2026. However, legal observers expect swift legal challenges to any finalized repeal.

MATS Amendments: A Return to 2012 Standards

EPA is also proposing to undo specific changes to the MATS rule that were finalized in 2024. These changes had tightened standards for mercury, filterable particulate matter, and monitoring requirements. They applied to coal and oil-fired electric utility steam generating units and were intended to further reduce hazardous air pollutants.

The agency points to industry progress since 2012, noting that mercury emissions from coal plants have dropped by 90 percent and other air toxics have seen similar reductions. EPA now says the additional requirements imposed in 2024 are not warranted and would impose unnecessary costs without producing significant public health gains.

This repeal would restore the original 2012 standards and remove new monitoring obligations. EPA estimates that the rollback could save power producers $1.2 billion over the next ten years.

What Industry Should Know

EPA’s proposals represent a decisive shift in environmental policy. Supporters of the rollback cite high compliance costs and strained grid reliability. Critics argue that the move undermines environmental protections and may expose the agency to new rounds of litigation.

These proposals will undergo public comment and likely face legal scrutiny. In the meantime, regulated entities should closely monitor the rulemaking process and prepare for possible transitions in compliance planning.