On March 27, the U.S. Environmental Protection Agency (“EPA”) proposed a rule limiting carbon dioxide (“CO2”) emissions from new power plants fired by fossil fuels such as coal or natural gas.
- The rule applies to new fossil fuel-fired electric utility generating units in the continental United States; it does not apply to existing units or new “transitional” units that already have received preconstruction air emission permits and that start construction within 12 months of the proposed rule’s publication in the Federal Register.
- Covered power plants would be required to meet an output-based standard of 1,000 pounds of CO2 per megawatt-hour.
- This standard is expected to favor natural gas over coal. EPA states that “[n]ew natural gas combined cycle power plant units should be able to meet the proposed standard without add-on controls.” By contrast, coal-fired power plants would not be able to meet this standard without carbon capture and storage technology, which is still under development and is expected to be quite costly.
The proposed rules (New Source Performance Standards under Section 111 of the Clean Air Act) result from a settlement between EPA and a group of states and environmental organizations. These plaintiffs sued EPA in opposition to the agency’s refusal, in 2006, to establish greenhouse gas emission standards for new and modified power plants. EPA was required to revisit this decision in the aftermath of the U.S. Supreme Court’s landmark decision in Massachusetts v. EPA, which affirmed EPA’s statutory authority under the Clean Air Act to regulate greenhouse gas emissions.
Under the settlement giving rise to the standards proposed last week, EPA had also agreed to establish CO2 emissions guidelines for existing fossil fuel power plants. EPA has yet to propose such standards, and the time frame for its doing so is uncertain; EPA Administrator Lisa Jackson recently stated, “[w]e don’t have plans to address existing plants.”
The full text of the proposed rule is available here. Public comments are being accepted under Docket ID No. EPA‐HQ‐OAR‐2011‐0660 at www.regulations.gov for 60 days after the proposed rule’s publication in the Federal Register.