Biden’s latest big climate rule will be based on rarely used technologies

They say the proposal would require energy companies to capture most of their carbon emissions instead of letting them into the atmosphere. No commercial power plants in the United States currently use carbon capture technology, but the agency considers it ready for widespread use, two people familiar with the discussions said.

The EPA is set to publish rules for the two power plants near the end of the week, the people said. One rule will target existing coal and natural gas plants, and the other will apply to new gas plants.

One of the people who was recently briefed by the EPA said the rules could be delayed until May.

The White House Office of Management and Budget, which is reviewing the rule, declined to comment on the proposal. The EPA did not immediately respond to requests for comment.

“We must commit to action,” Biden said last week as he announced a new executive order on climate change. “Will we live up to our ambitions?” Will we stand together to meet the great challenges we face? Will we preserve our planet for future generations? History will judge us by how we answer these questions.

The latest proposal comes as the EPA continues to implement an ambitious regulatory program to sharply reduce the use of oil, natural gas and coal in vehicles and the energy sector to halve US greenhouse gas emissions by 2030. The agency has proposed the most -the nation’s strongest -permanent restrictions on greenhouse gas emissions from cars and trucks earlier this month, aimed at spurring a huge surge in sales of electric vehicles.

“We’ve been encouraged by what we’ve heard from the EPA” about the power plant proposal, “and what we’ve seen from them in other rules,” said Lisa Lynch, director of the federal legal group Natural Resources Defense Council.

The power plant rules will be stricter than the EPA’s last two attempts to regulate the sector’s carbon emissions — made under the Obama and Trump administrations.

And they appear stronger than what the EPA signaled earlier this year.

In March, days before the rule was presented to OMB, EPA Administrator Michael Regan hinted that his agency was considering a standard that would require the construction of new power plants with the ability to use carbon capture at a later date. But people following the proposals say the administration is now preparing to release draft rules that would require new gas plants to use faster carbon capture.

Not every coal- and gas-fired power plant will have to meet the rules’ most stringent standards. The largest facilities would have to make the deepest and earliest cuts to their carbon emissions, according to one person briefed on the EPA. Coal plants scheduled to retire and gas units that operate during peak demand will face weaker standards. New gas plants will be given a timetable to start using carbon capture systems or meet an alternative hydrogen-based standard.

Obama’s 2015 power plant rule would have forced utilities to switch from coal to cleaner energy sources, but federal courts blocked it before it took effect, and the Supreme Court struck it down last year. The justices said in June that the EPA does not have the legal authority to order such a radical change in the way the United States generates electricity.

Greens say the 2022 decision, as historic as it was, leaves plenty of room for the EPA to aggressively regulate carbon at power plants.

“They need to identify the technologies that are adequately demonstrated and cost-wise at the facility level and that can make a transformation,” said a person familiar with the proposal.

Environmentalists say carbon sequestration has been adequately demonstrated, although it is not widespread. And they point to expanded incentives under last year’s climate spending law, known as the Inflation Reduction Act, to argue that it’s affordable. That law gives companies $85 for every ton of carbon dioxide captured through a tax credit known as 45Q, up from $50 per ton.

Green groups, including Evergreen Action and NRDC, have flooded the EPA’s docket with comments arguing that even established coal and gas plants can now be retrofitted with carbon capture to reduce most of their emissions. New gas plants that escaped meaningful standards under the Obama administration should be expected to capture up to 90 percent of their CO2, Evergreen and NRDC wrote in separate comments.

Such a rule would help fulfill Biden’s promise of an 80 percent zero-carbon electricity grid by 2030.

But there are risks in taking such an aggressive approach. If the agency spends years trying to finalize its power plant rules only to see them thrown out in court, it could jeopardize Biden’s broader climate goals, which rely on a clean grid to support expanded electricity use in the transport. The EPA estimated that its car and truck pollution rule could account for two-thirds of new EV sales by 2032.

“I’ll admit it’s absolutely hard to pin down,” NRDC’s Lynch said. “And we have the Supreme Court waiting to take it up again. And so we understand the difficulty they face.”

Jeff Holmstead, who led the EPA’s air office during the George W. Bush administration, said the agency’s tough standards for cars and trucks released earlier this month convinced him the EPA would use carbon capture as basis for its standards in the energy sector.

“I think the EV rule suggests they’re probably going to be pretty aggressive here,” said Holmstead, who now represents industry clients as a partner with the firm Bracewell LLP. “I think so [carbon capture and storage] is in the mix. But how exactly they do it and how they justify it, I don’t know.”

But even if the EPA uses carbon capture as the basis of its rules — and if it holds up in court — that may not mean rapid expansion of the technology.

Under the Clean Air Act, the EPA sets emission limits in accordance with the “best available control technology” and then leaves it up to utilities and states to decide how to meet them. The rules the EPA is proposing this week could help carbon capture become mainstream. Or it could rapidly increase the percentage of electricity coming from wind, solar or other renewable sources, or encourage widespread use of some other technology, such as hydrogen.

This story also appears in Energy conductor.

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