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5 Ways the EPA Can Strengthen Carbon Standards for Power Plants
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5 Ways the EPA Can Strengthen Carbon Standards for Power Plants

The Environmental Protection Agency must strengthen the standards for carbon emissions from fossil fuel-fired power plants.

Photo shows smoke rising out of smokestacks at a power plant nestled among green hills against a cloudy sky
Smoke billows out of smokestacks at a coal-fired power plant in Winfield, West Virginia, May 2023. (Getty/Visions of America/Joseph Sohm/Universal Images Group)

Power plants are an enormous source of carbon pollution, producing more than 25 percent of the United States’ total greenhouse gas (GHG) emissions. Now—backed by the transformative power of the new clean electricity investments of the Inflation Reduction Act, which also affirmed the strength of the Clean Air Act to tackle climate change—the Biden administration has a rare opportunity to set the first-ever carbon pollution emissions standards for fossil fuel-fired power plants.

How do the EPA’s emissions standards work?

The EPA’s proposed rule follows a narrow but defined course set for the agency by the U.S. Supreme Court. In the recent West Virginia v. EPA case, the Supreme Court created a “major questions doctrine” that mandates that the EPA can require pollution reduction technologies only on individual fossil fuel-fired power plants, not on the electricity system in which they operate. However, as industry has long advocated, the installation of carbon capture technology or the addition of hydrogen to the fuel mix could cut as much as 90 percent of the emissions from fossil fuel power plants. Since the Clean Air Act stipulates that the EPA must find the best system of emissions reductions, this means that all new and existing fossil fuel power plants should be required to meet very strict emissions rates. However, the law gives states and utilities the flexibility to comply with the emissions standard through many means, including by deploying renewable energy and batteries.

Earlier this summer, the EPA proposed new carbon pollution limits for coal and natural gas power plants, but the draft rule does not yet match the scale of fossil fuel-fired power plants and their harm to public health and the global climate.

Here are five ways the EPA can strengthen the rule and ensure robust carbon emissions reductions.

1.  Expand the scope of existing gas plants covered by the rule

The EPA’s proposal requires pollution cuts from less than one-quarter of current natural gas power plants. Any facility that runs at less than half of its full capacity, described as 50 percent capacity factor, is effectively unregulated. And though power plants often have multiple units operating together, the EPA proposes to apply its regulatory approach only to the largest individual units, those larger than 300 megawatts (MW), leaving out some of the largest plants that use several smaller units. According to the EPA’s analysis, this leaves the vast majority of carbon emissions from existing gas plants untouched, which is unacceptable given the abatement technologies available today. Fortunately, the EPA has invited public comment on whether to lower the threshold to 100 MW and a 40 percent capacity factor, which it should do to increase the share of the gas fleet subject to emissions standards. The EPA should also set the emissions standard at the plant level, instead of the unit level, which would cover large multiunit gas plants that would otherwise escape meaningful regulation.

2.  Increase the stringency of the emissions standards for new gas plants 

Under the EPA’s proposal, newly built natural gas power plants will be required to cut carbon pollution by 90 percent, but only if they plan to operate as baseload power plants—those operating at around 50 percent capacity factor or more. Less frequently run plants, or intermediate-load plants, would be required to cut emissions by only 12 percent. This emissions standard is far too low and fails to anticipate how the grid is evolving. Already today, the average monthly capacity factor for natural gas power plants is 48 percent, which isn’t enough to qualify as baseload under the EPA’s new proposal. As the EPA acknowledges, the power system is evolving toward power plants that run even less frequently in order to provide support for the growing role of wind and solar. The EPA can take several steps to mitigate this problem. First, the agency should consider any plants running at more than 40 percent capacity factor as a baseload plant, subject to the strictest emissions standards. It should also increase the emissions reductions required for intermediate-load plants and gradually raise the emissions reduction requirement to the full 90 percent to align with its requirement for baseload plants.

3.  Strictly enforce compliance timelines and incremental progress

The EPA provides long timelines for plants to comply with its emissions standards—in certain cases, as late as 2035 or 2038. The EPA must require power plants to take action to reduce their emissions in this decade. One crucial aspect of this rule is the strong enforcement of the required increments of progress for gas plants and retirement milestones for coal plants. Once plants commit to a certain emissions reduction pathway, or commit to a retirement date in the case of certain coal plants, they must prove they are taking steps toward complying with the rule. The EPA should set date-specific deadlines for these increments, ensure there is full and public transparency for each plant’s compliance plan, and revoke applicable permits once a plant reaches its committed retirement date.

4.  Prevent carbon accounting loopholes

For certain categories of power plants, the EPA is proposing an emissions standard based on co-firing “low-GHG hydrogen.” To set an emissions guideline associated with hydrogen, the EPA should rely on hydrogen deployment with zero life-cycle emissions—hydrogen that is produced from electrolysis using zero-emissions electricity and abides by specific parameters to reduce emissions leakage.

Once the guidelines and standards are in place, the EPA should require rigorous accounting of actual carbon emissions resulting from co-firing with hydrogen. This careful calculation is necessary to prevent hydrogen-based compliance approaches that could cause potential increases in total GHG or co-pollutant emissions. As the EPA recognizes in its proposal, this outcome would be totally out of step with the agency’s intention with these standards as well as its mandate under the Clean Air Act.

5.  Encourage comprehensive and ambitious state implementation plans

The existing gas rule will ultimately be implemented via state implementation plans (SIPs). As such, it is essential that the EPA encourages states to undergo comprehensive planning and analysis and to secure more ambitious emissions standards. For example, the EPA should direct each state to perform and submit a cumulative impacts analysis as a component of its SIP, as local pollution impacts on environmental justice communities must be considered in the EPA’s approval of state plans. Further, states have the discretion to secure even greater emissions reductions and should be encouraged to finalize more ambitious standards given the evolving economics of the power sector.

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Conclusion

It is the EPA’s responsibility under Section 111 of the Clean Air Act to finalize a strong and robust rule to reduce harmful carbon emissions from the power sector. These five recommendations are clear, commonsense steps that the EPA can take to further strengthen emissions standards, reduce emissions leakage, avoid loopholes, and achieve greater carbon pollution reductions.

The author would like to thank Charles Harper at Evergreen Action for his collaboration in developing these recommendations, and Shanée Simhoni for her contributions to this column.

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Authors

Rachel Chang

Former Policy Analyst, Domestic Climate

Shannon Baker-Branstetter

Senior Director, Domestic Climate and Energy Policy

Trevor Higgins

Senior Vice President, Energy and Environment

Team

Domestic Climate

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