Last month, EPA proposed a rule to repeal the Clean Power Plan 2.0 (CPP 2.0) that was promulgated by EPA last year to reduce carbon emissions from fossil fuel-fired (coal, natural gas, and oil) power plants.[i] This short paper in Q&A format provides a few high-level basics about the proposed repeal, mostly as it relates to coal-fired power plants.
What does CPP 2.0 require? The rule that is being repealed includes requirements to reduce carbon emissions from fossil fuel-fired power plants: existing coal, natural gas (steam but not combustion turbines), and oil-fired power plants as well as new (but not existing) natural gas-fired combustion turbines (both simple and combined cycle).[ii]
Under the rule, existing coal power plants have three options: commit to retire by 2032 and be exempted from the rule; co-fire coal with 40% natural gas by 2030 and retire by 2039; or install carbon capture and storage technology (CCS) to achieve a 90% reduction in carbon emissions by 2032 and continue operating without a retirement deadline. The requirements for new combustion turbines are based on their capacity factors. For example, baseload combustion turbines (defined as having an annual capacity factor greater than 40%) must install CCS by 2032, while combustion turbines with lower capacity factors must use clean fuels or highly efficient turbine technology, depending on their annual capacity factor. The requirements for existing gas and oil-fired steam power plants also depend on their capacity factors, and these plants must comply by 2030.
Why is EPA repealing CPP 2.0? EPA is concerned about the negative impacts of CPP 2.0 as well as the legal basis for the rule. For example, CPP 2.0 would force the premature retirement of most, if not all, of the U.S. coal fleet. The premature retirement of coal power plants would increase the risk of electricity shortages that officials, such as the North American Electric Reliability Corporation (NERC)[iii], have been warning about and make it more difficult to satisfy the huge increase in electricity demand caused by artificial intelligence (AI), advanced manufacturing, and electrification of the economy. For example, NERC estimates that electricity demand will grow by 149,000 megawatts (MW) over the next ten years.[iv] Winning the AI race is critical for national security reasons; therefore, having ample and dependable supplies of electricity are necessary to promote national security. CPP 2.0 also includes requirements that could limit the operation of new natural gas-fired combustion turbines that are also needed because of increased electricity demand. EPA estimates that repealing CPP 2.0 will reduce compliance costs by $1.2 billion per year.[v]
What does the proposed repeal rule say? The rule proposes two alternative reasons to repeal CPP 2.0. EPA’s preferred reason is based on the agency’s interpretation that the Clean Air Act requires it to make a determination that carbon emissions from fossil fuel-fired power plants “contribute significantly” to air pollution that endangers public health or welfare before it can issue rules like CPP 2.0. Prior administrations interpreted the Clean Air Act as not requiring EPA to make a “significant contribution” finding before regulating carbon emissions from power plants so long as EPA had a “rational basis” for regulating.[vi] In the proposed repeal rule, EPA has explained several reasons why carbon emissions from power plants do not meet this “significant contribution” test based on a new legal interpretation. This interpretation would take away EPA’s legal authority under the Clean Air Act to regulate carbon emissions from fossil fuel-fired power plants in the future, and it would repeal the emission standards in CPP 2.0.[vii]
The alternative proposal is less sweeping in that it would repeal the emission standards in CPP 2.0 because of their cost and lack of adequately demonstrated technology but would not prevent EPA from regulating power sector carbon emissions in the future.
What does “significant contribution” mean? EPA interprets “significant contribution” to mean that the agency should consider a number of factors including the effectiveness of carbon emission controls, the cost and cost-effectiveness of emission controls, impacts on the utility industry, and impacts of carbon emissions on public health and welfare. In other words, significance is not based on a single numerical threshold, such as the amount of carbon emitted by fossil fuel-fired power plants, but rather on the impacts of a regulation, in this case, CPP 2.0.
However, EPA points out that the share of global carbon emissions from the U.S. power sector is relatively minor and has declined from 5.5% of global emissions in 2005 to roughly 3% now.[viii] At the same time U.S. power sector emissions are declining, China and India are adding more than 530,000 MW of new coal-fired generation to their existing coal fleets, roughly three times as much generating capacity as the existing U.S. coal fleet (179,000 MW).[ix]
What is the difference between the two reasons for repealing CPP 2.0? The first reason, lack of “significant contribution,” means that EPA could not regulate carbon emissions in the future from coal, natural gas, or oil-fired power plants under the Clean Air Act. The second reason, cost and lack of adequately demonstrated technology, leaves the door open to regulating carbon emissions in the future, but EPA could not adopt the same overly stringent requirements as those in CPP 2.0.
Will EPA choose just one reason as the basis for the final repeal rule? That will depend on comments EPA receives from the public during the comment period, which ends August 7. EPA could choose to base repeal on either reason or both.
When will EPA issue a final repeal rule? EPA expects to issue a final rule by the end of this year.
Will there be legal challenges to the final rule? The final repeal rule, regardless of its basis, is all but certain to be challenged in court. The Supreme Court could ultimately decide legal challenges. It is likely that litigation would be complete before the end of President Trump’s term in 2029.
Will EPA replace CPP 2.0 with another rule? That depends on EPA’s reason for repealing CPP 2.0. There would be no legal basis for a replacement rule if EPA bases repeal on the lack of significant contribution. If EPA chooses the alternative reason (substantial cost and lack of demonstrated technology), the agency could, if it wished, choose to replace CPP 2.0 but with a different rule. Ultimately, whether or not EPA issues a replacement rule will depend on the outcome of litigation.
[i] U.S Environmental Protection Agency, “Repeal of Greenhouse Gas Emissions Standards for Fossil Fuel-Fired Electric Generating Units,” 90 Fed. Reg. (June 17, 2025). We use the term “carbon” in this paper as shorthand for “greenhouse gases.”
[ii] U.S. Environmental Protection Agency, “New Source Performance Standards for Greenhouse Gas Emissions From New, Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse Gas Emissions From Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean Energy Rule,” 89 Fed. Reg. (May 9, 2024).
[iii] North American Electric Reliability Corporation, “2024 Long-Term Reliability Assessment,” December 2024.
[iv] Ibid.
[v] U.S. EPA, “Regulatory Impact Analysis for the Proposed Repeal of Greenhouse Gas Emissions Standards for Fossil Fuel-Fired Electric Generating Units,” EPA-452/R-25-002, June 2025.
[vi] This is a complicated legal issue that is beyond the scope of this paper. Prior to the repeal rule, EPA had interpreted the Clean Air Act to require the agency to make a significant contribution determination for a source category (in this case, fossil fuel-fired power plants are a “source category”), and not the air pollutant (in this case, carbon emissions). For the repeal rule, EPA is making a lack of significant contribution finding for the air pollutant.
[vii] “The EPA is proposing that the Clean Air Act (CAA) requires it to make a finding that GHG emissions from fossil fuel-fired power plants contribute significantly to dangerous air pollution, as a predicate to regulating GHG emissions from those plants. The EPA is further proposing to make a finding that GHG emissions from fossil fuel-fired power plants do not contribute significantly to dangerous air pollution. The EPA is also proposing, as an alternative, to repeal a narrower set of requirements that includes the emission guidelines for existing fossil fuel-fired steam generating units, the carbon capture and sequestration/storage (CCS)-based standards for coal-fired steam generating units undertaking a large modification, and the CCS-based standards for new base load stationary combustion turbines.” 90 Fed. Reg. 25752 (June 17, 2025).
[viii] Global carbon emissions (strictly speaking, greenhouse gas emissions) are estimated to be greater than 50 billion metric tons. According to the Energy Information Administration, U.S. power sector carbon emissions are slightly more than 1.4 billion metric tons. “U.S. Energy-Related Carbon Dioxide Emissions 2024,” May 2025.
[ix] Global Energy Monitor, “Global Coal Plant Tracker – Coal Plants in China and Coal Plants in India,” accessed July 4, 2025.