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Environmental Protection Agency Issues New Emissions Guidelines and Performance Standards for Fossil Fuel-Fired Power Plants

on Thursday, 6 June 2024 in Dirt Alert: David C. Levy, Editor

On May 9, 2024, the Environmental Protection Agency (“EPA”) published new emissions guidelines and performance standards for fossil fuel-fired power plants. A copy of the guidelines and standards is online here.

In this rule, the EPA created a new suite of best systems of emission reduction (“BSERs”) for different categories of power plants. We summarize these categories and the resulting regulations as follows:

  1. Coal-fired power plants. Guidelines for coal-fired power plants depend on each plant’s expected date of retirement.

For plants ceasing operation before January 1, 2032, states need only submit proof to the EPA of the plant’s retirement before said date.   

Plants ceasing operation after December 31, 2031, but before January 1, 2039 must reduce coal usage by instead using natural gas at a level equivalent to 40 percent of the plant’s heat input. Plants must co-fire natural gas with coal at the required level by January 1, 2030. This BSER may reduce CO2 emissions by up to 16 percent from a unit-specific baseline.  

Plants that will retire after January 1, 2039 must implement carbon capture and storage (“CCS”) able to capture 90 percent of carbon dioxide emissions. The EPA expects this BSER to reduce carbon dioxide emissions by 88.4 percent from a unit-specific baseline.

  1. New or modified oil or natural gas-fired power plants. The EPA set different guidelines for plants based on the amount of electricity each plant generates relative to their annual capacity. For low and intermediate-load plants, the EPA requires the use of lower carbon-emitting fuels and the adoption of “highly efficient generating technology,” respectively. Highly efficient generating technology refers to a variety of efficiency improvements, including: “increasing firing temperature, increasing pressure ratios, using intercooling on the air compressor,” and the use of highly efficient heat recovery steam generators.[1]

For higher-load plants, also known as base load plants, the EPA has created two phases of BSERs. The first phase, with an immediate compliance date, requires base load plants implement the aforementioned highly efficient generating technology in their construction or modification.  

In the second phase, starting January 1, 2032, base load plants must adopt CCS able to capture 90 percent of carbon dioxide emissions. In accordance with the adoption of CCS, the EPA set highly restrictive CO2 emission standards for plants in this phase.  

  1. Existing oil or natural gas-fired power plants. The EPA has declined to create BSERs for this category outside of proper maintenance and repair, pending further review.

The EPA issued these guidelines to replace the now-defunct Clean Power Plan (“CPP”) and Affordable Clean Energy (“ACE”) rules. The Supreme Court rendered the CPP defunct in 2022, when the majority held that the EPA far exceeded the agency’s delegated authority by using “generation shifting” as the BSER.[2] The EPA themselves rendered ACE defunct after the agency discovered heat rate improvements, the BSER used in ACE, could result in an increase of CO2 emissions. 

Attorneys at Baird Holm LLP have experience assisting clients with these matters and others similar. If you have any questions about these regulations or would like to discuss the potential applicability to your entity, please contact the firm.

Hannes D. Zetzsche
Steven M. Winston, Summer Associate

[1] New Source Performance Standards for Greenhouse Gas Emissions From New, Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emissions Guidelines for Greenhouse Gas Emissions from Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean Energy Rule, 89 Fed. Reg. 39798, 39919 (May 9, 2024) (to be codified at 40 C.F.R. pt. 60).

[2] See West Virginia v. Environmental Protection Agency, 597 U.S. 697 (2022).

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