On June 19, the Trump administration's Environmental Protection Agency (EPA) finalized its Affordable Clean Energy rule (ACE rule), intending to put the final nail in the coffin of Obama-era attempts to reduce greenhouse gas (GHG) emissions. The new ACE rule affords states a considerable degree of flexibility in determining how to reduce GHG emissions from electric generating facilities. Significantly, the ACE rule is expressly intended to allow coal-fired power plants to continue to operate subject only to unit-specific technological improvements. The rule has attracted a great deal of attention from a variety of interested parties, including activists, lawmakers, scientists, and the regulated community.

Background

In 2015, the Obama administration released a sweeping reform of carbon-based emissions standards, commonly known as the Clean Power Plan (CPP). The CPP sought to combat GHG emissions by heavily regulating existing coal-fired power plants, while simultaneously incentivizing energy production from lower GHG emitting sources, including natural gas and renewable power generation.

The CPP prompted multiple legal challenges. Most notably, appellants contended that EPA did not have authority under the Clean Air Act (CAA) to establish a regulatory scheme predicated on statewide carbon budgets. This legal analysis is based on traditional CAA regulation, pursuant to which emissions are regulated at the individual facility level. The CPP ultimately never took effect because it was stayed by the U.S. Supreme Court in February 2016, pending the outcome of the litigation.

On the campaign trail later that year, then-candidate Donald Trump promised to revitalize coal states by eliminating the CPP if he was elected president. After taking office, Trump followed through on that promise when he issued an executive order to dismantle the CPP in March 2017.