US to weaken carbon limits on new coal plants

President Donald Trump's administration is trying to make it cheaper to build coal-fired power plants by rolling back a rule that effectively required new plants to capture and store a portion of their carbon dioxide emissions.

The pending change, which the US Environmental Protection Agency (EPA) announced today, seeks to relax a 2015 emissions rule that industry perceived as a de facto ban on new coal plants. Power sector officials said the carbon capture technology needed to comply is so expensive that nobody would ever take the risk to build a new coal-fired plant.

EPA administrator Andrew Wheeler said the proposal would replace "onerous regulations" with achievable standards that would keep energy prices affordable and encourage investments in new coal technology. EPA said that carbon capture and sequestration was "unproven," economically prohibitive and not feasible in all locations in the US.

The rule issued under former president Barack Obama said new coal plants could not exceed a carbon dioxide emissions rate of 1,400 lbs/MWh. That rate would require conventional coal plants to capture about 35pc of their carbon. But critics cited problems with carbon capture, such as the abandoned coal gasification effort at the Southern Company Kemper plant in Mississippi, to argue the technology did not meet the statutory definition of being "adequately demonstrated."

EPA's proposal today would instead set a carbon dioxide emissions rate of 1,900 lbs/MWh for large coal plants and 2,000 lbs/MWh for smaller coal plants. The agency says that rate could be achieved with state-of-the-art coal plants running at high efficiency. EPA would set a 2,200 lbs/MWh emissions rate for plants that burn coal refuse.

Environmentalists say even if the revisions go through, the changes will be largely symbolic. That is because utilities and independent power generators have shown almost no interest in building coal plants because of their relatively high costs compared with other power sources and the looming prospect of policies such as a carbon tax. Environmentalists still say the move sends the wrong signal.

"This is just one more foolhardy move by a misguided administration that will be judged harshly by future generations," Natural Resources Defense Council senior strategic director David Doniger said.

The all-in cost of electricity from a new coal plant in the US is expected to range between $60-$143/MWh over its lifetime, according to a study published by the financial consultancy Lazard that was updated last month. That compares to $41-$75/MWh for a combined-cycle natural gas plant, $29-$56/MWh for onshore wind and $32-$44/MWh for utility-scale solar photovoltaic.

The proposal was cheered by Republicans who accused Obama's EPA of overreaching with its earlier carbon restrictions on coal plants. US Senate majority leader Mitch McConnell (R-Kentucky), whose state accounted for 5pc of US coal production last year, said the Obama-era regulations would have made it "nearly impossible" to build coal plants and disadvantaged the fuel against other energy resources.

"This is a crucial step toward undoing the damage and putting coal back on a level playing field," he said.

EPA's new proposal will be less consequential than a separate agency proposal, named the Affordable Clean Energy rule, that would weaken greenhouse gas restrictions that apply to the existing fleet of coal-, gas- and oil-fired power plants. That rule is projected to increase US power sector carbon emissions by 3pc by 2030, when compared to the emission cuts that would occur if regulations issued under Obama were enforced.

The proposal's release comes a day after the release of research showing a surge in climate-warming emissions around the globe. Carbon dioxide emissions from fossil fuels are set to increase by 2.7pc globally and 2.5pc in the US this year, according to new research from a major scientific initiative named the Global Carbon Project. Coal last year was the largest source of fossil fuel emissions at 40pc of the total.