On Tuesday, a D.C. Federal Appeals Court vacated the former President Donald Trump administration’s Affordable Clean Energy (ACE) Rule. The rule, which established emissions guidelines for states to use for coal-fired plants, replaced the Clean Power Plan and was finalized in June 2019.

The ACE rule gave states more time and authority when deciding how to ease emissions from coal plants.

In the decision, the court said, “promulgation of the ACE Rule and its embedded repeal of the Clean Power Plan rested critically on a mistaken reading of the Clean Air Act.” It also vacated the amendments to implementing regulations that extended the compliance timeline.

It said the U.S. Environmental Protection Agency (EPA) “fundamentally has misconceived the law” and that it could not stand.

Coal petitioners, North American Coal Corp. and Westmoreland Mining Holdings LLC, brought forward two challenges to the ACE Rule. Both questioned the EPA’s legal authority to enact the rule.

They argued that the EPA failed to make the required endangerment finding –– that carbon dioxide emissions from power plants cause or contribute significantly to air pollution that may reasonably be anticipated to endanger public health or welfare –– before regulating those emissions. The court said the EPA made the finding in 2015 and that the ACE Rule retained that finding.

The coal companies also argued that the EPA’s previous regulation of a different air pollutant (mercury) from power plants under the Hazardous Air Pollutants provision precludes the EPA from now regulating power plants’ emission of greenhouse gases under Section 7411(d).

The court determine that the EPA “correctly and consistently” read the statute to allow the regulation of a source’s emission of hazardous substances under Section 7412 and other pollutants emitted by the same source under Section 7411(d).

“The coal petitioners’ argument rests not on the enacted statutory language, but instead on their own favored reading of one statutory amendment inserted by codifiers,” the court ruling said.

It added that if read as a whole, including all relevant language enacted by Congress and two duly enacted amendments, “the Clean Air Act authorizes the EPA to regulate both power plants’ emissions of greenhouse gases under Section 7411(d) and hazardous air pollutants under Section 7412. That reading is reinforced by the statutory structure, purpose and history.”

The Clean Power Plan faced numerous legal challenges questioning the EPA’s authority to enact the regulations. In 2016, the U.S. Supreme Court issued a stay halting the implementation of the plan while the case was heard in lower courts. The case was still ongoing in the D.C. Circuit Court of Appeals when the EPA began to repeal the plan.