EPA Partially Repeals Power Plant Carbon Rules, Punts Questions of Broader Authority to New Proposal

On September 17, 2026, the U.S. Environmental Protection Agency (EPA) published a final rule partially repealing the 2024 Carbon Pollution Standards. The repeal relied largely on the technical and economic record, rather than on more fundamental questions about the agency’s legal authority to regulate power plant greenhouse gas (GHG) emissions under Clean Air Act (CAA) section 111 in order to address climate change. Judicial review of this rule in the D.C. Circuit may therefore leave those broader questions unresolved, at least for now.

Notably, EPA simultaneously issued a supplemental proposal that would go further by rescinding EPA’s foundational 2015 findings and determinations supporting power plant GHG regulation under CAA section 111, and repealing the power-sector GHG requirements that remain under that section. Comments on the supplemental proposal are due by November 2, 2026.

Key Takeaways

• EPA finalized the narrower path it proposed in June 2025—a partial repeal largely resting on technical, cost, and feasibility findings concerning the 2024 standards, rather than broader theories that CAA section 111 does not authorize power-plant GHG regulation to address climate change.
• The final rule removes the 2024 existing-source emission guidelines and specified standards based on carbon capture and storage (CCS), but other new-source GHG standards remain unless and until EPA finalizes the supplemental proposal.
• This partial repeal takes effect November 16, 2026.
• EPA’s simultaneous supplemental proposal would go further by rescinding the predicate findings supporting power-plant GHG regulation under CAA section 111 and repealing the remaining federal requirements.  The supplemental proposal draws directly on reasoning from EPA’s high-profile 2026 rescission of the 2009 Endangerment Finding for motor vehicles.
• Comments on the supplemental proposal are due no later than November 2, and EPA will hold a virtual hearing on October 1.

A Partial Repeal, with Some Standards Still in Place

Effective November 16, 2026, the final rule removes:

• The 2024 emission guidelines in 40 C.F.R. part 60, subpart UUUUb, in their entirety, covering existing coal-, natural gas-, and oil-fired steam- generating units, as well as associated state-plan requirements.
• The 2024 standards based on 90 percent CCS for coal-fired steam generating units undertaking a large modification;
• The 2024 “Phase 2” CCS-based standards for new base-load combustion turbines, which had compliance deadlines beginning January 1, 2032.

Other 2024 turbine standards remain, including efficiency- and lower-emitting-fuel requirements. Applicable 2015 standards for new sources also remain, including requirements based on partial CCS for new steam units.

A Decade of Rewrites, Now Formally Without Chevron Deference

EPA’s latest action continues a decade-long dispute over how strictly to regulate power-plant GHG emissions and which legal tools the CAA provides.

The Obama EPA’s 2015 Clean Power Plan relied largely on shifting generation toward lower-emitting sources, invoking Chevron deference to support its interpretation of what the “best system of emission reduction” (BSER) may consider under CAA section 111. The first Trump EPA’s 2019 Affordable Clean Energy (ACE) Rule interpreted section 111 as limited to plant-level measures that can be applied “at or to” individual sources. The D.C. Circuit initially rejected the ACE Rule’s interpretation in American Lung Association v. EPA, 985 F.3d 914 (D.C. Cir. 2021). On appeal, the Supreme Court rejected the Clean Power Plan’s generation-shifting approach under the major questions doctrine. See West Virginia v. EPA, 597 U.S. 697 (2022). By then, the Biden EPA was conducting its own review and ultimately replaced the ACE Rule in 2024 with requirements based on CCS and natural gas co-firing.

Reconsideration of the Biden EPA’s 2024 rule was near the top of EPA Administrator Lee Zeldin’s list of deregulatory priorities announced in March 2025. EPA moved quickly on a two-part proposal in June 2025:

• EPA’s “primary proposal” from June 2025 was broad. It proposed that section 111 requires (or at least authorizes EPA to require) a pollutant-specific significant-contribution finding before regulating power-plant GHG emissions, with EPA proposing a broad conception of what should inform that significance determination. In that vein, EPA’s primary proposal characterized U.S. power sector GHG emissions as “a small and decreasing part of global emissions,” with “cost-effective control measures [that] are not reasonably available.” For these and other reasons, the agency proposed finding that those emissions do not contribute significantly to dangerous air pollution and, therefore, that it should repeal all CAA section 111 rules for power plant GHG emissions.
• By contrast, EPA’s June 2025 fallback “alternative proposal” would have repealed only selected 2024 requirements by reassessing BSER determinations, based largely on proposed findings that 90-percent CCS had not been adequately demonstrated or shown to be cost-reasonable, that the necessary infrastructure could not be deployed by the compliance deadlines, and that natural gas co-firing was inefficient.

Unlike earlier rulemakings in this sequence, EPA’s June 2025 proposal was the first developed entirely in an administrative law arena without Chevron deference, after the U.S. Supreme Court overruled that 40-year-old doctrine in Loper Bright Enterprises v. Raimondo (2024). That context would have heightened the stakes for the primary proposal’s statutory theories, because the D.C. Circuit and Supreme Court will have to independently determine (and potentially lock in) section 111’s “best” reading—not merely accept a reasonable agency interpretation offered by one administration or the next. By contrast, Loper Bright did not disturb the relatively deferential review agencies still receive on certain factfinding or discretionary choices Congress grants them.

EPA Finalizes Its Fallback Proposal, Not Its Broadest Theory (For Now)

EPA finalized the fallback “alternative proposal,” leaving unresolved (for now) whether its proposed significance test could also exclude smaller-emitting source categories. Most significantly, EPA finalized determinations that:

• 90 percent CCS was not adequately demonstrated and was unreasonably costly, with infrastructure unlikely to be ready by January 1, 2032, for long-term coal units and new base-load turbines;
• 40 percent natural gas co-firing is inefficient, and the pipelines required for it are unlikely to be available by January 1, 2030.
• For gas- and oil-fired steam units, EPA does not reject the BSER determinations. As originally proposed, it instead removes their requirements because retaining state plans solely for these units after repealing coal requirements would consume resources for few or no additional reductions.

Although EPA’s reasoning was highly technical and record-based, some aspects were more legalistic. For example, EPA considered 40 percent natural gas co-firing to be impermissible generation shifting under West Virginia, independently disqualifying it as BSER. EPA’s generation-shifting rationale for rejecting the 2032 CCS requirement depends on its finding that the requirement is impracticable and would effectively force retirements. By basing the Final Rule primarily on technical arguments (where EPA still enjoys a level of deference), rather than statutory interpretation (where it receives none), the agency may exercise more control over the litigation playing field.  

EPA’s Supplemental Proposal Targets the Basis for Regulation, Linking Its Rationales to the Repeal of the 2009 Endangerment Finding for Mobile Sources

The supplemental notice of proposed rulemaking adds new legal grounds to the pending primary proposal. EPA proposes extending to power plants many of the same statutory-authority rationales it finalized in February 2026 when rescinding the 2009 Endangerment Finding for mobile source GHG emissions under Section 202(a)(1), as B&D previously anticipated could occur.

EPA proposes reading section 111’s parallel “air pollution” language as addressing local or regional exposure, not global climate change. It also invokes the major questions doctrine, arguing that Congress did not clearly authorize such regulation. For its “futility” rationale, EPA stated that it used “generally accepted models” to estimate the effects of eliminating all U.S. power-sector GHG emissions and concluded that the modeled effects “would have no more than de minimis impacts” on the relevant climate indicators.

In its new proposal, EPA argues that the 2015 power-plant findings depended on the 2009 Endangerment Finding’s interpretation, “rather than independently interpreting and applying” the similar language in CAA section 111(b)(1)(A), so rescinding the 2009 Endangerment Finding necessarily undermines EPA’s authority for power-sector GHG regulation as well. EPA also proposes separately rescinding the power-plant findings and repealing all remaining standards.

If EPA later finalizes this approach and a court agrees that CAA section 111 categorically does not authorize power-sector GHG regulation, the ruling could create a more durable constraint on future regulation than the record-driven conclusions EPA finalized last week. 

Litigation, Comments, and Practical Implications

Environmental groups quickly challenged the partial repeal, filing a petition for review mere hours after it was published in the Federal Register. American Lung Ass’n v. EPA, No. 26-1238 (D.C. Cir. Sept. 17, 2026). Among other topics, the challengers have publicly disputed EPA’s authority to repeal without replacements, signaling a legal fight likely to extend, at least in part, beyond technical questions.

Owners of affected units should review surviving standards, state requirements, and permits before revising compliance or investment plans.

Written comments on the supplemental proposal are due no later than November 2, 2026, under Docket No. EPA-HQ-OAR-2025-0124. EPA will hold a virtual hearing on the supplemental proposal on October 1, for which speakers must preregister no later than September 29.

Beveridge & Diamond’s Air, Electric Power, and Climate Change & Carbon Markets practice groups help utilities and independent power producers assess compliance obligations, plan and permit projects, and address regulatory and litigation risks. We frequently assist clients in commenting on, and bringing administrative challenges to, EPA rulemakings. Our team of litigators represents clients in administrative rulemakings and appellate matters in numerous state and federal courts, including the D.C. Circuit and U.S. Supreme Court. For more information, please contact the authors.