Biden Administration Plans to Impose Stricter Rules on Carbon Emissions

According to sources, the Biden administration is considering requiring natural gas power plants to reduce their carbon emissions through technology that captures and stores carbon. The move is part of a larger plan to decarbonize the electricity sector within 12 years. The Environmental Protection Agency (EPA) is expected to reveal new standards for power plants that produce about 25% of US greenhouse gas emissions. The proposed rules would replace those implemented by former presidents Trump and Obama.

The new guidelines, which have been over a year in the making, are expected to center around carbon capture and storage technology (CCS) efficiency in reducing emissions. Companies may choose between building new gas plants with CCS technology, or opting for zero-emissions renewable energy instead. The rules could make it more difficult for new gas plants to compete with solar and wind power, as most new gas plants currently do not pay for emitting carbon.

President Biden has previously pledged to reduce carbon emissions from the power business by 2035. Under the Clean Air Act, the EPA’s standards must be based on affordable, technically feasible and the best emission reduction system available.

The proposed rules will set varying standards for plants, making it easier for “peaker” plants – which run during high power demand – to comply, and more restrictive requirements for those that run constantly. Current technology can capture and store nearly 90% of carbon emissions.

Fossil fuels contributed 60% of US electricity generation in 2022, with natural gas and coal accounting for 60% and 40% of that, respectively. Renewables accounted for 21.5% of energy production, with nuclear energy producing the rest. However, the EIA projects that, this year, 54% of new electricity generation will be solar, while natural gas will account for 14%. Southern Company plans to phase out its coal generation plants, but believes that new gas turbines should be favored to ensure reliable electricity supply.

Last year, some industry representatives expressed dissatisfaction with the EPA’s consideration given to carbon capture and storage technology. Utility Southern Company believes that commercial deployment of CCS technology “is many years away,” despite cost reductions resulting from the Inflation Reduction Act. The National Mining Association has called the technology inadequately tested.

The proposed power plant standards acknowledge a Supreme Court decision last July, which prevented the EPA from imposing system-wide shifts in electric generation. Instead, the EPA must issue plant-specific rules. The Inflation Reduction Act provides over $100 billion in clean electricity tax incentives and includes a 70% tax credit increase for each carbon ton captured and sequestered.

By Valerie Volcovici