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US Supreme Court restricts EPA authority to regulate GHG emissions from powerplants

30 June 2022

The US Supreme Court in a 6-3 ruling restricted the Environmental Protection Agency’s (EPA) authority to regulate greenhouse gases from powerplants, siding with the coal mining industry and coal producing states.

The ruling interpreting the US Clean Air Act (CAA) is likely to prevent the administration from imposing wide-ranging GHG emission reduction rules for the power generation sector, which makes it increasingly unlikely that the Biden administration will achieve its climate goals.

The ruling could have a broad impact and affect other sectors of the economy and other regulatory agencies—including GHG emission regulations from motor vehicles, that are based on the 2007 Supreme Court ruling that CO2 is a pollutant under the CAA. It is uncertain how these two rulings reconcile with each other.

The Supreme Court majority said that, while the EPA can regulate powerplant emissions, the agency cannot try to shift power generation away from fossil-fuel plants to cleaner sources. Writing for the court, Chief Justice John Roberts said Congress needs to speak more explicitly to give an agency that much power. “A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body,” Roberts wrote.

The ruling casts fresh doubt on Biden’s goal to achieve a carbon-free electric grid by 2035. If the ruling also affects other sectors, such as the oil & gas industry and transportation, it may complicate or derail a number of other GHG emission reduction policies and regulations of the Biden administration.

Under the Clean Power Plan adopted by the Obama administration, states were encouraged to shift electricity generation from higher-emitting sources, such as coal, and toward lower-emitting options, such as renewable power. The Clean Power Plan never took effect, and the Trump administration rescinded the rule and adopted a narrower approach.

The Supreme Court case grew out of a group of legal challenges to the Trump rule by companies including Westmoreland Mining Holdings, and 19 states led by West Virginia. The case centered on a CAA provision that requires the EPA to identify the best system of emission reduction (BSER) for existing pollution sources and then tasks states to come up with implementation plans.

The cases are West Virginia v. EPA, 20-1530; North American Coal Co. v. EPA, 20-1531; Westmoreland Mining Holdings v. EPA, 20-1778; and North Dakota v. EPA, 20-1780.

Source: Bloomberg