On August 21, the U.S. Environmental Protection Agency (EPA) published a new rule to reduce greenhouse gas emissions from existing coal-fired plants that would replace former President Barack Obama’s Clean Power Plan (CPP). The proposal, the Affordable Clean Energy Rule (ACE), would establish emissions guidelines for states to use.

According to the EPA, this rule will empower states, promote energy independence, and facilitate economic growth and job creation.

President Donald Trump issued an executive order back in March 2017 to have federal agencies review potential “burdensome” regulations. Following this order, the EPA announced it was proposing a repeal of the CPP after a thorough review. When the CPP was announced, 27 states, 24 trade associations, 37 rural electric co-ops, and three labor unions challenged the rule. Additionally, the Supreme Court issued a stay of the rule.

“The ACE Rule would restore the rule of law and empower states to reduce greenhouse gas emissions and provide modern, reliable and affordable energy for all Americans,” said EPA Acting Administrator Andrew Wheeler. “Today’s proposal provides the states and regulated community the certainty they need to continue environmental progress while fulfilling President Trump’s goal of energy dominance.”

The proposal defines the “best system of emission reduction” (BSER) for existing power plants as on-site, heat-rate efficiency improvements; provides states with a list of “candidate technologies” that can be used to establish standards of performance and be incorporated into their state plans; updates the New Source Review (NSR) permitting program to further encourage efficiency improvements at existing power plants; and aligns regulations under Clean Air Act section 111(d) to give states adequate time and flexibility to develop their state plans.

In regard to the new rule, Trump said, “We’re ending intrusive EPA regulations that kill jobs … and raise the price of energy so quickly and so substantially.”

The EPA projected that replacing the CPP with the proposal could reduce the compliance burden by up to $400 million a year. The EPA also estimated that the rule would reduce 2030 CO₂ emissions by up to 1.5% from projected levels. When states have fully implemented the proposal, CO₂ emissions could be 33% to 34% below 2005 levels, the EPA said. The CPP required states to reduce emissions by 32% below 2005 levels by 2030.

Those in the coal industry applauded the proposed rule.

“The replacement rule respects the infrastructure and economic realities that are unique to each state, allowing for state-driven solutions, as intended by the Clean Air Act, rather than top down mandates,” National Mining Association President Hal Quinn said. “It also embraces American innovation, by encouraging plant upgrades.

West Virginia Coal Association President Bill Raney said the set of regulations under the ACE are more reasonable than ones outlined in the CPP, but would still aim to reduce carbon dioxide emissions.

“The coal industry has proven time and again that we are the best environmentalists out there,” Raney said. “U.S. coal plants have reduced toxic air emissions by more than 90% over the last few decades. We are committed to continuing to make improvements while protecting America’s domestic energy security and, most importantly, to keep our West Virginians working.”

While many in the coal industry expressed optimism about how the proposed rule would affect the industry, Moody’s lead coal analyst Benjamin Nelson offered a different view, saying, “The proposed rules could benefit coal producers by slowing the ongoing decline in demand for thermal coal in the United States.

“While the proposal is a modest credit positive for the coal industry, we expect that economics will continue to drive substitution away from coal, with numerous coal-fired power plants slated for retirement in the coming years.”

EPA will take comment on the proposed rule for 60 days after publication in the Federal Register and will hold a public hearing.