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Unraveling U.S. EPA's Bold Emission Rule for Fossil Fuel Power Plants

The debate over new carbon dioxide limits for power plants has centered on carbon capture technology, with the US Environmental Protection Agency (EPA) defending its readiness despite industry skepticism.

The EPA had finalized a rule establishing carbon emissions standards for coal- and new gas-fired generation, effectively requiring carbon capture technology for many power plants. This climate policy was first revealed in April last year.

Under the new EPA mandate, coal plants must implement carbon capture and storage (CCS) technology. This technology involves capturing CO2 from power plant emissions and then storing it underground to prevent it from entering the atmosphere. 

The EPA’s New Mandate for Coal Plants

The directive is a bold ultimatum for coal-fired power plants to either capture their smoketstack emissions or face shut down. The new rule aligns with President Joe Biden’s pledge to combat carbon pollution from fossil fuel-fired electric plants by 2035 and economy-wide by 2050. 

The latest restrictions on GHG emissions represent the Biden administration’s most aggressive stance to fight global warming. President Biden’s National Climate Advisor Ali Zaidi, made a promise that,  

“This year, the United States is projected to build more new electric generation capacity than we have in two decades – and 96 percent of that will be clean,” 

US EPA carbon emissions rule power plant type

Here are the main points of the EPA’s new carbon emissions rule for power plants: 

  • Existing coal-fired plants intending long-term operation and all new baseload gas-fired plants must control 90% of their carbon pollution.
  • Boost the Mercury and Air Toxics Standards (MATS) for coal-fired power plants, tightening toxic metal emissions standards by 67% and finalizing a 70% reduction in mercury emissions from existing lignite-fired sources
  • Cut pollutants discharged through wastewater from coal-fired power plants by over 660 M pounds/year, guaranteeing cleaner water for impacted communities, particularly those with environmental justice concerns facing disproportionate impacts.
  • Safe management of coal ash in previously unregulated areas, including disposal sites prone to leakage and groundwater contamination.

Coal remains the largest energy source for electricity generation, steelmaking, and cement production. However, it’s also the largest source of man-made carbon dioxide (CO2) emissions.

The Rule’s Climate Impact and Benefits

The EPA’s finalized rule on carbon emissions standards for power plants is projected to have significant financial and climate impacts.

According to EPA estimates, industry compliance with the rule could cost between $7.5 billion and $19 billion through 2047. However, the agency also anticipates substantial climate and public health benefits, totaling to $370 billion over the next two decades. 

  • In terms of emissions reductions, the rule is forecasted to prevent 38 million metric tons of CO2 emissions in 2028 and 123 million metric tons in 2035.

Mona Dajani, global co-chair of energy, infrastructure, and hydrogen at Baker Botts, emphasized that the rule sends a clear message to power plant operators about the end of unlimited carbon pollution. While carbon capture technology will contribute to emissions reductions, the EPA projects that the greatest impact will come from coal plant retirements prompted by the rule.

By 2035, the agency expects US coal-fired capacity to decrease to about 20 GW, comprising 19 GW with carbon capture and 1 GW with natural gas co-firing. This contrasts with a scenario without the regulations, where coal-fired capacity would consist of 11 GW with carbon capture and 41 GW of unabated coal plants.

new gas generation by 2030 in US

Regarding gas-fired generation, the EPA anticipates 1GW of capacity with carbon capture and 484 GW without carbon capture by 2035. Additionally, the EPA announced plans to set carbon limits for existing gas-fired power plants in a future rulemaking process.

However, this decision has ignited debate from industrialists and environmental stalwarts. Trade groups also criticized the standards, questioning the feasibility of capturing and storing CO2 emissions, echoing concerns raised after the EPA’s initial proposal in May 2023.

Challenges and Controversies

Dan Brouillette, president and CEO of the Edison Electric Institute (EEI), stated that CCS is not yet ready for full-scale deployment and that there isn’t enough time to develop the necessary infrastructure for compliance by 2032.

While CCS involves scrubbing CO2 from emissions sources like power plants for underground storage, operational implementations are not enough. Currently, only one utility-scale US power plant, W.A. Parish 5-8, utilizes carbon capture technology, with the captured gas used for oil extraction. The abandonment of another project in Kemper County, Miss., led to significant costs for Southern Co., raising doubts about CCS.

Some industry groups, such as the National Rural Electric Cooperative Association (NRECA), have challenged the legality of the rule. NRECA CEO Jim Matheson criticized the rule as unlawful, unrealistic, and unachievable, arguing that it undermines electric reliability and poses risks to an already strained electric grid. 

  • However, the EPA highlighted technological advancements and federal incentives making CCS more economically viable in its final rule.

The expansion of tax credits for carbon capture under the US Inflation Reduction Act in 2022, now valued at up to $85 per metric ton of CO2 stored, has bolstered support. Additionally, process improvements from previous CCS deployments have contributed to cost reductions.

The EPA noted that some companies have already planned to install CCS on their units independent of regulatory requirements, indicating growing industry interest in the technology’s potential.

The new rule’s first provision allows units to respond to declared grid emergencies without being held accountable for their CO2 emissions, providing a short-term mechanism to address urgent situations. The second provision permits US states to delay compliance measures for certain units in the event of unanticipated grid reliability issues. 

States have the option to include both reliability exceptions in the plans they submit to the EPA for implementing the new rule.

As the debate rages on, the EPA’s carbon emission standards mark a pivotal moment in the nation’s energy transition, highlighting the delicate balance between environmental goals and industry realities.

The post Unraveling US EPA’s Bold Emission Rule for Fossil Fuel Power Plants appeared first on Carbon Credits.

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The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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