EPA Repeals Key Carbon Standards for US Coal and Gas Power Plants
The US Environmental Protection Agency has finalized a major rollback of federal greenhouse gas requirements for fossil fuel-fired power plants, removing most of the carbon standards adopted under the Biden administration and proposing the repeal of the remaining federal requirements.
EPA Administrator Lee Zeldin signed the final partial repeal on September 14, 2026, alongside a supplemental proposal that would rescind the remaining greenhouse gas standards for fossil fuel power plants regulated under Section 111 of the Clean Air Act.
The action follows a June 2025 proposal in which the EPA set out two approaches. One would eliminate all federal greenhouse gas standards for the power sector, while an alternative would remove the principal requirements introduced through the 2024 Carbon Pollution Standards. The agency has now finalized the alternative approach while continuing to pursue the broader repeal through a separate proposal.
The regulatory shift affects one of the largest sources of US carbon dioxide emissions and could materially change investment decisions involving coal generation, new natural gas capacity, carbon capture and storage, and plant retirement schedules.
2024 Carbon Requirements Largely Removed
The 2024 standards established emissions requirements for existing coal-fired generators and new natural gas-fired combustion turbines, using carbon capture and storage, or CCS, as a central compliance technology for some of the longest-running and most heavily utilized plants.
Under those rules, existing coal units planning to continue operating from 2039 onward were required to meet an emissions rate based on capturing 90% of their carbon dioxide by January 2032. Coal plants intending to close between 2032 and 2039 faced a separate standard based on replacing 40% of their heat input with natural gas by 2030. Plants scheduled to close before 2032 did not face additional carbon reduction obligations under the rule.
New baseload natural gas turbines operating above a specified capacity threshold were also expected to move toward a standard based on 90% carbon capture by 2032.
The September repeal removes the emission guidelines for existing coal, oil and gas-fired steam generating units, as well as CCS-based standards applying to certain modified coal plants and new baseload natural gas turbines.
EPA said it no longer considers 90% CCS to be an adequately demonstrated and reasonably priced system of emissions reduction at the scale and within the timetable required by the 2024 regulation. The agency also concluded that the infrastructure needed to meet the 2032 deadline would be unlikely to be available in time.
For the natural gas co-firing requirement, EPA argued that the approach amounted to impermissible generation shifting and could require pipeline infrastructure that would not be available by the January 2030 compliance deadline.
These findings reverse the EPA's position when it adopted the standards in 2024. At that time, the agency concluded that CCS was adequately demonstrated and economically reasonable, taking into account technology development and federal tax incentives supporting carbon capture projects.
EPA Seeks Broader Removal of Power-Sector GHG Regulation
The administration is also pursuing a more extensive regulatory change.
Alongside the final partial repeal, the EPA proposed rescinding the greenhouse gas findings underpinning regulation of fossil fuel-fired power plants under Section 111 of the Clean Air Act and eliminating the remaining greenhouse gas standards for the sector.
The agency's proposed legal interpretation argues that it must determine that emissions from a source category contribute significantly to dangerous air pollution before imposing greenhouse gas standards. EPA is proposing to conclude that greenhouse gas emissions from fossil fuel-fired power plants do not meet that threshold under its interpretation of the statute.
If finalized, this approach would extend beyond reversing the 2024 regulation. It would also remove remaining standards dating from earlier federal climate regulations, including requirements applying to certain new fossil fuel power plants.
EPA has said the final partial repeal could produce approximately $310 billion in savings, while its broader proposal could reduce direct compliance costs by another $370 million. Those figures are agency estimates and depend on assumptions about future electricity generation, plant operations, investment and compliance behavior.
Environmental organizations and other opponents of the rollback argue that eliminating federal carbon limits will increase emissions and weaken the country's ability to reduce power-sector climate pollution. Legal challenges to the regulatory changes are expected.
Implications for the US Power Sector
The decision comes as electricity demand is increasing in several US markets, partly because of new data centers, manufacturing facilities and broader electrification.
Fossil fuels remain central to the US electricity system. In 2025, natural gas generated approximately 41% of US utility-scale electricity, while coal supplied about 17%. Together with petroleum, fossil fuels accounted for roughly 58% of utility-scale generation.
Preliminary Energy Information Administration data show that the electric power sector produced about 1.49 billion metric tons of energy-related CO2 emissions in 2025, including around 750 million metric tons from coal and 712 million metric tons from natural gas.
The rollback could give operators of some coal plants greater flexibility to continue operating without making CCS investments or converting part of their fuel supply to natural gas solely to satisfy the federal carbon rule.
It may also affect the economics of proposed gas generation. Developers of new baseload gas plants covered by the 2024 standards had faced the prospect of installing carbon capture systems or structuring projects and operating strategies around the emissions requirements. Removal of those standards reduces that federal compliance constraint.
However, the regulatory change does not necessarily reverse broader changes in the US generation mix. EIA data show that coal's share of electricity generation has declined substantially over recent decades as natural gas and renewable generation have expanded. The agency's January 2026 outlook projected continued growth in solar generation and further coal retirements through 2027 under then-current market conditions and announced plant retirement plans.
Utilities also remain subject to other federal and state environmental requirements, state clean-energy policies, electricity market economics, fuel prices, transmission constraints and corporate emissions commitments. The effect of the federal carbon rollback will therefore vary considerably by region and plant.
Greater Uncertainty for Carbon Capture Investment
One of the most significant consequences could be for power-sector carbon capture.
The 2024 rules were designed to create a regulatory incentive for CCS deployment at long-running coal plants and heavily utilized new gas facilities. Removing those obligations reduces one potential source of guaranteed demand for carbon capture equipment, transport networks and geological storage infrastructure.
CCS projects may still proceed where tax incentives, commercial arrangements or corporate decarbonization strategies make them economically viable, but developers can no longer assume the same federal regulatory requirement will drive adoption at covered power plants.
The longer-term regulatory picture remains unsettled. The partial repeal is final agency action, while the proposed elimination of the remaining power-sector greenhouse gas standards must proceed through the federal rulemaking process. EPA said the proposal will include a public hearing and a 45-day public comment period following publication.
Legal challenges could further shape the outcome.
For utilities and investors, the September decision therefore provides immediate relief from several major requirements of the 2024 standards while introducing a different form of uncertainty over how federal greenhouse gas regulation of the power sector will evolve.
The result is a substantially changed federal policy environment for coal, natural gas and carbon capture projects, even as market forces, state regulation and rising electricity demand continue to reshape the US generation mix.
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