EPA Publishes New Source Performance Standards for Greenhouse Gas Emissions from New Power Plants in Federal Register

On September 20, 2013, the US Environmental Protection Agency (EPA) issued proposed new source performance standards (NSPS) for carbon dioxide (CO2) emissions from new electric power plants pursuant to Section 111(b) of the Clean Air Act (CAA). EPA published the rules in the Federal Register today, officially marking the start of the 60 day public comment period. Comments must be received by EPA on or before March 10, 2014.

Because power plants emit nearly 40 percent of total greenhouse gas (GHG) emissions in the US, significant emission reductions from the power sector is crucial to meeting long-term climate and clean energy goals. Today’s rules will set the first uniform national limit on the amount of carbon pollution allowed from future power plants and are fundamental to achieving the broader climate and energy goals set forth in President Obama’s Climate Action Plan, announced in June 2013, and the Obama Biden Energy Plan. Together, these plans set a goal of achieving a 17 percent reduction in CO2 emissions by 2020 from 2005 levels and an 80 percent reduction by 2050.

Under the proposed rules, future coal plants will be required to meet an emission standard of 1,100 lbs of CO2/MWh. EPA estimates that even the most efficient coal plants being constructed today emit approximately 1800 lbs of CO2/MWh, on a net basis. EPA identified partial carbon capture and storage technology as the best system of emission reduction (BSER) available for future coal plants to meet the new standards. New natural gas fired power plants will be required to meet an emission standard of 1,000 lbs of CO2/MWh for large units and 1,100 lbs of CO2/MWh for small units. Because natural gas plants release approximately half the CO2 as coal plants, most new natural gas plants will not require the addition of CCS, or other pollution control technology, to meet the new standards.

The World Coal Association (WCA), which advocates for the deployment of a full range of energy efficient and low carbon technologies to address the challenge of climate change, notes that CCS is a proven technology that has been in use for decades. CCS has only recently been coupled with power plants to reduce CO2 emissions however, and applying the technology to the power sector has proven expensive. Cost of pollution control is only one factor EPA considers when setting NSPS. EPA also considers whether the standards will foster continued innovation and development in pollution control technology. EPA addressed this issue in today’s rule stating “a determination that [high efficiency generating] technology alone, as opposed to CCS, is the BSER [Best System of Emission Reduction] for CO2 emissions from new coal-fired generation likely would inhibit the development of technology that could reduce CO2 emissions significantly, thus defeating one of the purposes of the CAA’s NSPS provisions.” The ability of a standard to incentivize technological innovation has long been a guiding principal in setting performance standards under the CAA and today’s rule reflects that central tenant of CAA implementation.

Next Steps

The 111(b) NSPS rules regulating CO2 emissions from new power plants are expected to be finalized by June 1, 2014. At that time, EPA is expected to propose rules to regulate CO2 emissions from existing power plants pursuant to section 111(d) of the CAA. Those rules are expected to be finalized by June 1, 2015 along with a requirement that states submit state implementation plans by June 30, 2016. The Center for Energy and Sustainable Development will be presenting a conference on February 24, Regulation of CO2 Emissions from Power Plants: Flexibility and the Path Forward for Coal Dependent States, that will examine issues surrounding the EPA’s anticipated rules governing emissions from existing power plants.