Existing Power Plants
EPA has previously issued greenhouse gas regulations under Section 111(d) of the Clean Air Act for existing power plants, but these rules have not gone into effect. Section 111(d) allows EPA and the states greater flexibility in crafting and implementing a standard.
In May 2023, EPA proposed new greenhouse gas standards for existing coal and natural gas power plants. The proposed standards are based on the use of carbon capture and storage (CCS) and cofiring with clean hydrogen, and would repeal the Affordable Clean Energy (ACE) Rule.
For existing coal plants that plan to operate beyond 2040, the proposed rule requires these plants to install and operate CCS with 90 percent capture of carbon dioxide by 2030. Recognizing that coal plants may have varying operational life and capacity factors, EPA proposed three subcategories:
- For coal plants that plan to retire before 2040, EPA recognizes CCS would be less cost-effective for these plants and instead proposes these plants cofire 40 percent natural gas on a heat basis.
- For coal plants that plan to retire before 2035 and commit to operating with an annual capacity factor of 20 percent, EPA recognizes these plants may operate as peaking units and proposes the best system of emission reduction here would be routine maintenance and operation that maintains the current emissions rate.
- For coal plants retiring before 2032, EPA similarly proposes the best system of emission reduction for these plants would be routine maintenance and operation that maintains the current emissions rate.
For existing gas plants, with combustion turbines larger than 300 megawatts (MW) with a capacity factor greater than 50 percent, the proposed rule requires these plants to install and operate CCS with 90 percent capture of carbon dioxide or cofiring 30 percent by volume clean hydrogen starting in 2032 and increasing to 96 percent by 2038.
As part of the rulemaking process, EPA is seeking comments on how they should regulate fossil fuel turbines not covered by the proposed rule, including smaller, frequently used turbines and less frequently used turbines.
In January 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE Rule and remanded it to EPA. The appeals court ruled that EPA misinterpreted the Clean Air Act when crafting the ACE to regulate greenhouse gas emissions from power plants. The rule was sent back to EPA, which has proposed a new rule in May 2023 that includes repealing the ACE Rule.
The 2019 ACE Rule would have directed states to require existing coal-fired power plants to use prescribed technologies to improve their heat rate (i.e., increase efficiency), as a best system of emission reduction (BSER) for carbon dioxide. The ACE Rule was not expected to reduce power sector emissions. The ACE Rule replaced the 2015 Clean Power Plan, which set state-specific emission rates and provided various market-based flexible compliance provisions to reduce carbon dioxide emissions from existing power plants.