Climate Cutback: US EPA to Scrap GHG Emission Limits
June 13, 2025
The US Environmental Protection Agency (EPA) has proposed overhauling two Biden-era regulations that cap greenhouse gas (GHG) emissions generated by power plants.
The two rules in the EPA’s crosshairs are the Clean Air Act (CAA) and the Mercury and Air Toxics Standards (MATS). Specially, the agency has taken aim at Section 111 of the CAA which created stricter emissions standards for the power sector and amendments to MATS which have “directly result[ed] in coal-fired power plants having to shut down”.
The EPA is proposing scrapping the 2015 emissions standards for new fossil fuel-fired power plants issued during the Obama-Biden administration, as well as the 2024 rule for new and existing fossil fuel-fired power plants implemented during the Biden-Harris administration.
The Biden-led 2024 CAA aimed to strengthen clean air standards, reducing toxic air pollution by 6,200 tonnes each year. The aforementioned Section 111 of the act required new and modified sources of methane emissions to comply with more stringent guidelines and for US states to have similar standards for existing sources of GHG emissions.
In its statement outlining its rationale to remodel the rules, the EPA argued that potential public health harms from greenhouse gases have “not been accurately attributed” to emissions from the US power sector. It added that greenhouse gas emissions from fossil fuel-fired power plants “do not contribute significantly to dangerous air pollution”.
The agency also claimed that repealing the rules could save the power sector as much as U$1.2 billion per year in regulatory costs over a 20-year period beginning in 2026, amounting to U$19 billion in total by 2046.
The EPA has proposed repealing the “most burdensome” requirements for new and existing fossil fuel-fired steam generating units. This includes emission guidelines for existing power plants, and carbon capture and sequestration requirements for new combustion turbines and modified coal plants.
When the 2024 Biden-Harris rule was introduced, the EPA’s regulatory impact analysis had estimated that 1.38 billion metric tonnes of total carbon dioxide would be avoided systemwide between 2028-2047. It had also projected that from 2024-2047 the regulation would galvanise net climate and public health benefits totalling more than U$370 billion, comprising U$270 billion in climate benefits, U$120 billion in health benefits, and U$19 billion in compliance costs.
While the EPA does not intend to eliminate the MATS, it intends to repeal amendments made in May 2024 which would see the standard revert to how it was in 2012.
The amendment had been made to addresses hazardous air pollutant emissions from coal-fired power plants by strengthening the mercury standard for lignite-fired plants.
The EPA claimed that the 2012 MATS saw mercury emissions from coal-fired power plants in 2021 be 90% lower than levels before the standard was introduced. The agency added that it estimates the proposed repeal of the 2024 MATS amendments would save U$1.2 billion in regulatory costs over a decade, around U$120 million per year.
The EPA had previously reported that the power sector was responsible 25% of GHG emissions in the US in 2022, the second most polluting sector behind only transport which generated 28% of such emissions.
EPA Administrator Lee Zeldin, who was selected to lead the agency by Donald Trump in November, had initially announced intentions to “reconsider” the two rules in March.
Data from the World Resources Institute previously showed that the US was the world’s second largest GHG emitter behind only China. The US, India and China, the world’s three largest GHG emitters, were collectively responsible for 42.6% of such emissions.
Tackling emissions is a key priority for investors. In November, Minerva Analytics reported that a coalition of 35 institutional investors representing more than U$2 trillion in assets had called on US states to develop, implement and enforce plans that meet or exceed the EPA’s federal methane standard to substantially reduce methane emissions from the country’s oil and gas sector.
This is the latest in a series of attacks on ESG under Trump’s administration. Last week, Minerva Analytics reported that the US Department of Labor was working to axe a Biden-era rule which permitted retirement plans to consider ESG factors when selecting investments.
The creation of a new rule on retirement plan fiduciaries being able to consider ESG factors when selecting plan investments is expected to be fast tracked by the DOL. Further details are anticipated in the Trump administration’s spring regulatory programme.
Further details are also imminently expected on a report from the US Attorney General Pam Bondi outlining actions taken against state-level ESG-related energy laws. Trump’s ‘Protecting American Energy from State Overreach’ Executive Order issued on April 8 stated that a report would be submitted to the President within 60 days, meaning the report should have been filed by June 7.
The order demanded the Attorney General identify and take “all appropriate action” against state laws that aim to address climate change or involve ESG initiatives, environmental justice, carbon or GHG emissions, and funds to collect carbon penalties or carbon taxes.
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Last Updated: 13 June 2025