EPA waters down proposed climate rule, exempting existing gas plants (NYSEARCA:XLU)

The Biden administration said this week it will exclude existing natural gas power plants from its proposed carbon regulations – at least for now – in a significant weakening of a key regulation on greenhouse gases.

The Environmental Protection Agency said it still plans to finalize standards by April to cut carbon emissions from existing coal and new gas-fired power plants, but will establish a new, broader rule that targets the entire fleet of gas plants operating in the U.S.

The EPA proposed a set of standards last May it projected would cut carbon emissions from coal plants and new gas plants by 617M metric tons during 2028-42, the equivalent of reducing the annual emissions of 137M passenger vehicles.

The standard for existing gas plants was added to the proposed rule at the last minute last year, and utility companies warned it would harm grid reliability.

Comments received by the EPA questioned the legal basis for requiring installation of technologies such as carbon capture and sequestration since they are not widely used.

Some environmental groups expressed disappointed that the EPA delayed regulating existing gas plants, and the move is seen as risky because new mandates likely would not be in place by the presidential election in November.

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