Go-To Guide

• EPA proposes to rescind all GHG limits for new and reconstructed gas turbines and existing and modified coal and oil/gas-fired power-generating units under CAA Sections 111(b) and (d).
   
• EPA concludes that Section 111 requires a finding that a source category ‘“causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare”’ prior to regulating a new pollutant, regardless of whether EPA has previously listed the source category for a separate pollutant(s).
   
• EPA reinterprets the statutory phrase “contributes significantly” to require a proximate-cause-based nexus between the specific pollutant, the source category, and the extent of contribution required to trigger regulation based on the type of emissions. EPA determines it has the discretion to consider policy factors in making the determination, and if the cost of achieving the desired emission reductions is unreasonable, then regulation is not warranted.
   
• Under its alternative proposal, the agency withdraws its prior conclusions that carbon capture and sequestration/storage (CCS) and natural gas co-firing are “adequately demonstrated,” commercially available, and cost-effective systems of emission reduction to reduce GHG emissions from EGUs.
   
• The proposed rule implicitly challenges EPA’s 2009 Endangerment Finding—a finding made in response to the Supreme Court’s direction in Massachusetts v. EPA, 547 U.S. 497 (2007)—and signals potential reconsideration of GHG regulation in other sectors.
   
• The proposal reflects the Trump administration’s stated objective to reduce regulatory burdens and bolster domestic energy production. EPA estimates nearly $1 billion in annual cost savings across the utility sector if the rule is finalized: it also projects that the proposal will result in PM2.5 and ozone-related health costs of $76-$130 billion annually.

After more than a decade of regulatory flip flopping on greenhouse gas (GHG) emission limits from power plants and corresponding litigation, the U.S. Environmental Protection Agency (EPA) proposes to rescind all GHG limits for fossil fuel-fired power plants promulgated under Clean Air Act (CAA) Sections 111(b) and 111(d). On June 11, 2025, EPA issued a proposed rule that repeals carbon pollution standards for new and reconstructed gas turbines and existing and modified coal and oil/gas-fired units (collectively, “electric generating units” or “EGUs”). See Repeal of Greenhouse Gas Emissions Standards for Fossil Fuel-Fired Electric Generating Units (“Proposed Rule”).

The Proposed Rule follows executive orders directing EPA and other federal agencies to review existing regulations that may inhibit domestic energy development and security—and, specifically, to develop new regulatory frameworks that would reinvigorate the coal industry. The Proposed Rule is based on a new scientific and economic framework that runs counter to the agency’s 2009 Endangerment Finding and broader efforts to regulate GHGs. (See GT E2 Blog: “EPA Announces Broad Suite of Pollution Regulations for Power Plants,” May 7, 2024.)

EPA’s Reinterpretation of “Contributes Significantly” Under Section 111

The core of EPA’s proposal is a reinterpretation of the agency’s 2015 reading of 42 U.S.C. § 7411(b)(1)(A) (“Section 111”). Section 111 requires EPA to list source categories that “contribute[] significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare” and promulgate standards of performance to regulate emissions from the listed source categories.

In 2015, EPA concluded it did not need to make a significant contribution finding to regulate GHG emissions from EGUs because the agency had already listed these sources under Section 111 in 1971 and 1977 and issued standards of performance in 1979. Alternatively, if required to make a GHG-specific finding, EPA determined the 2009 Endangerment Finding would suffice.

In the 2025 Proposed Rule, EPA first declared that a separate, GHG-specific significant contribution finding is a prerequisite to regulating EGU emissions. Then, EPA determined that a significant contribution finding must be based on:
 

1.The “influence, effect, or usefulness of finding such contribution,” accounting for policy considerations. Emissions are “not significant” if regulating them would “have little effect on dangerous air pollution” or “would not be useful” given an administration’s policies for the source category. The EPA Administrator has discretion in determining whether a source category causes or significantly contributes to air pollution. 
 

2.The cost to regulate emissions from the proposed source category. Previously, EPA did not interpret Section 111 as requiring the agency to consider regulatory cost as part of the significant contribution finding, and only considered cost as part of crafting standards of performance to regulate emissions from a listed source category.

Applying its new standard, EPA concluded that EGU emissions do not “contribute significantly” to air pollution which may endanger public health or welfare and warrant regulation under Section 111. Although the source category accounts for approximately 25% of total U.S. GHG emissions according to EPA data, EPA found the volume of GHG emissions from EGUs compared to global emissions relegates the U.S. EGU emissions to a non-significant role. Additionally, EPA believes the causal role of U.S. EGU emissions to the potential danger to public health and welfare from climate change is too attenuated for regulation.

Implications for the 2009 Endangerment Finding

In 2015, EPA determined its 2009 Endangerment Finding provided an alternative basis to regulate GHG emissions from EGUs under Section 111(b) because the Endangerment Finding concluded that six well-mixed greenhouse gases, including CO₂, may reasonably be anticipated to endanger public health and welfare. The Proposed Rule rejects this rationale, arguing the “best reading” of Section 111 requires pollutant-specific and source-category specific significant contribution findings. The implication is EPA cannot rely on the 2009 Endangerment Finding as a sufficient basis for regulating GHG emissions from any appropriately listed source category. By introducing a new legal prerequisite to regulate under Section 111, the Proposed Rule raises questions about the sufficiency of the 2009 Endangerment Finding as a regulatory cornerstone and signals a broader effort to either revoke or limit its applicability to stationary source categories.

EPA’s Alternative Proposal: Reject and Repeal CCS and Fuel-Switching BSER

Once EPA lists a source category under Section 111, EPA must issue emission performance standards for the sources in that category based on the “best system of emission reduction [BSER] which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.”

As an alternative to determining that EGU GHG emissions do not contribute significantly to dangerous air pollution and therefore cannot be regulated under Section 111, the Proposed Rule includes a proposal to repeal specific portions of 40 CFR part 60, subparts TTTTa and UUUUb. These regulations contain the emission guidelines and BSER determinations for coal-fired steam generating units undertaking a large modification and phase 2 CCS-based requirements, and existing fossil fuel-fired steam generating units.

EPA proposes to withdraw its 2024 determination that CCS is the BSER to achieve a 90% reduction in CO₂ emissions from existing and modified EGUs because CCS has not been adequately demonstrated and the cost is not reasonable. Specifically, EPA states: (1) 90% capture from EGU flue gas has not been demonstrated at commercial scale and the limited projects cited in the 2024 rule suffered from reliability issues; (2) the capital costs of onsite capture systems, and compression and pipeline infrastructure, remain prohibitively high; and (3) CCS capture, pipeline, and sequestration infrastructure cannot be deployed at scale by the January 1, 2032, compliance date.

The Proposed Rule also would revoke EPA’s prior finding that 40% natural gas co-firing is BSER for existing, medium-term coal-fired EGUs. EPA believes coal-fired steam generating units “will continue to comprise a substantial portion of the nation’s electricity supply” and using natural gas for co-firing may have significant adverse effects on the energy system given the growing demand for natural gas domestically and abroad. EPA further determined that co-firing natural gas in a coal-fired unit is an example of impermissible generation shifting invalidated in West Virginia v. EPA, 597 U.S. 697 (2022), because it likely would require significant new infrastructure and modification or additional burners. Like its CCS determination, EPA also stated it does not believe sufficient natural gas pipeline infrastructure could be constructed by the January 1, 2030, compliance date to implement the BSER.

Implications for OOOOb/c and Other Sector Rules

The reinterpretation of “contributes significantly” raises questions about the legal foundations of EPA’s rules to regulate methane in the oil and gas sector codified at 40 C.F.R. Part 60, subparts OOOOa, OOOOb, and OOOOc. In those rules, EPA asserted a new significant contribution finding was unnecessary for already-listed categories and that oil and gas operations emit methane in sufficient volumes to justify regulation. The current proposal undercuts both rationales. EPA now explicitly rejects volume of emissions as a sole basis for regulating. If high-GHG emitting categories like fossil fuel-fired EGUs do not satisfy the statutory threshold, regulations for sectors that emit fewer GHGs will be up for debate.

Consistent with this administration’s concurrent policy of empowering states—particularly through the CAA’s cooperative federalism framework—the proposal strongly reemphasizes the “remaining useful life and other factors” (RULOF) discretion under Section 111(d), which EPA previously narrowed in favor of uniform standards. Refocusing on RULOF would give states substantially more flexibility in crafting existing source compliance plans for power plants and oil and gas sources.

GT Insights

EPA will launch a 45-day public comment period once the Proposed Rule is published in the Federal Register. The agency also will hold a virtual public hearing. EPA is soliciting feedback on numerous issues in the proposal, including how the agency’s statutory interpretation squares with recent Supreme Court cases. Stakeholders—including electric utilities, state regulators, and technology developers—may consider submitting comments about EPA’s revised interpretation of Section 111, the feasibility of CCS and fuel-switching technologies, and the broader implications for GHG regulation across sectors.

The proposal represents a major shift in EPA’s approach to regulating the power sector and its interpretation of Section 111 for all industrial sectors. If finalized, the Proposed Rule would have broad implications for GHG regulation across other sectors—including oil and gas—and for EPA’s 2009 Endangerment Finding. It also may affect investments in CCS technology and infrastructure.

Litigation is likely regardless of the Proposed Rule’s final form. In the meantime, various source categories should consider how the Proposed Rule would affect their governing regulations, ongoing or forthcoming litigation and reconsideration of those regulations, and how a rollback of GHG regulation under the CAA might impact their businesses and operations.