On February 22, 2021, the D.C. Circuit granted the Environmental Protection Agency’s (“EPA”) motion to stay the vacatur of the Trump administration’s Clean Power Plan Repeal Rule until EPA conducts further rulemaking on the issue in the case of American Lung Association v. EPA, No. 19-1140 (D.C. Cir., Feb. 22, 2021). This decision marks the latest action in the ongoing efforts by EPA and states to regulate greenhouse gas emissions; particularly in terms of carbon emissions from currently existing power plants. For additional background, please see previous MGKF blog on this topic here.

EPA explained its reasoning behind the motion in a February 12, 2021 memorandum to its Regional Administrators stating that because the D.C. Circuit did not expressly reinstate Obama’s Clean Power Plan in its decision to vacate the Trump administration’s Affordable Clean Energy (“ACE”) Rule, EPA would not be reinstating the Clean Power Plan of its own accord because it would not make sense to do so. The memo added that states should wait for further instruction from EPA while it drafts new rulemaking. From the February 12, 2021 memo:

The court’s decision vacated the ACE rule, including its requirements that states submit State Plans by July 8, 2022. Because the court vacated ACE and did not expressly reinstate the CPP, EPA understands the decision as leaving neither of those rules, and thus no CAA section 111(d) regulation, in place with respect to greenhouse gas (GHG) emissions from electric generating units (EGUs). As a practical matter, the reinstatement of the CPP would not make sense. The deadline for states to submit State Plans under the CPP has already passed and, in any event, ongoing changes in electricity generation mean that the emission reduction goals that the CPP set for 2030 have already been achieved. Therefore, EPA does not expect states to take any further action to develop and submit plans under CAA section 111(d) with respect to GHG emissions from EGUs at this time.

The practical implication is that there are currently no federal regulations in place for carbon emissions from existing power plants. Because addressing climate change is a stated goal of the Biden administration, states and the regulated community should expect new rulemaking on this issue to be at the top of the EPA’s agenda.