EPA Finalizes Repeal of Biden-era Amendments to MATS Rule

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Written by John Egan for IIR News Intelligence (Sugar Land Texas)

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Summary

The U.S. Environmental Protection Agency on Friday repealed amendments made in 2024 to the Mercury and Air Toxics Standards (MATS), which would bring the power industry back to standards last revised in 2012. Coal-burning power plants emit mercury, a deadly neurotoxin.

New EPA Rule Emphasizes Baseload Generation, Cost Savings

Continuing the Trump administration's "war for coal," the U.S. Environmental Protection Agency (EPA) last Friday announced its final order repealing tougher Biden-era amendments to limit emissions of mercury and hazardous air pollutants (HAPs) from coal- and oil-fired power plants.

The repeal of amendments to the Mercury and Air Toxics Standards (MATS) rule finalized in 2024 by the Biden administration means the power industry would now be bound by the less-stringent emissions rate adopted in 2012. Under Friday's final rule, nationwide allowable missions of mercury (Hg) from power plants would rise about 1.5 tons per year in 2035, to approximately 8.2 tons compared to the 6.7 tons contained in the 2024 amendments.

In a statement, the EPA said MATS, along with significant changes in the power sector, has "achieved significant health and environmental benefits by reducing a broad range of hazardous air pollutants. By 2017 mercury emissions had dropped by 86%, down to approximately 4 tons. Acid gas hazardous air pollutants (HAPs) and non-mercury metals (emissions) are down 96%and 81%, respectively, when compared to 2010 levels."

Last Friday, officials from the EPA. Congress and state governments highlighted the importance of dispatchable generation, such as that generated by power plants burning coal or oil, compared to intermittent resources such as wind or solar.

"Coal is an essential source of baseload power needed to power both the American economy and American homes," the EPA said in a statement accompanying the final rule, which ran to 165 pages. EPA Administrator Lee Zeldin made this further comment: "The Trump EPA knows that we can grow the economy, enhance baseload power and protect human health and the environment all at the same time. It is not a binary choice and never should have been."

Unveiling the new final rule Friday at the 54-year-old, coal-fired Mill Creek Power Station in Louisville, Kentucky, EPA Deputy Administrator David Fotouhi added this: "The Trump EPA's action follows the rule of law and will reduce the cost of generating baseload power, lowering costs and improving reliability for consumers."

Industry Reverts to 2012 Limits for Mercury and Hazardous Air Pollutants

The EPA first established the MATS rule in 2012 to limit emissions of hazardous air pollutants, including mercury; acid gases such as hydrogen chloride (HCl) and hydrogen fluoride (HF); non-mercury metals such as nickel, lead and chromium; and organic pollutants such as formaldehyde and dioxins/furans from coal- and oil-fired power plants.

Hundreds of oil- and coal-fired electric generating units have been retired since then as increasingly tougher federal and state environment regulations have rendered electricity generated from those fuels less economically viable compared to natural gas and renewables.

MATS required the EPA to revisit those emissions standards every eight years and update them as needed, based on the prevailing science and technology. In 2020, the agency completed its required review of the 2012 standards to identify and address any residual risk to human health and the environment and, separately, to revise the standards "as necessary" in light of developments in practices, processes and control technologies. In 2020, the EPA said, it determined the 2012 standards "protected public health with an ample margin of safety and that changes were not 'necessary' because there were no cost-effective developments in control technology."

In 2024, the Biden administration enacted mid-cycle amendments lowering those allowable emissions levels.

In releasing the final rule Friday, the agency said the 2024 MATS amendments it was repealing included the revised filterable particulate matter (fPM) emission standard, which serves as a surrogate for non-mercury hazardous air pollutant (HAP) metals for existing coal-fired EGUs, the fPM emission standard compliance demonstration requirements and the mercury (Hg) emission standard" for lignite-fired power plants. Also gone were the requirement for all power plants to use PM continuous emissions monitoring systems (CEMS), which the agency said resulted in net costs, not benefits, to the American people.

Costs & Benefits of New Rule

While Biden-era energy and environmental regulations tended to highlight public health benefits from tougher regulation, under the second Trump presidency, the agency has apparently abandoned efforts to quantify the admittedly harder-to-calculate public-health benefits in favor of emphasizing hard-dollar cost savings to industry.

In Friday's announcement, the EPA estimated reduced compliance costs stemming from its laxer standards, but did not try to estimate the public health costs those looser standards could impose on workers and the general public.

The new EPA rule, likely to be challenged in court, would reduce electric generators' compliance costs by an estimated $670 million in present value over the 2028-2035 period using a 3% discount rate, the agency estimated. A higher discount rate of 7% would lower net present value benefits to about $490 million for that period.

The agency's 155-page regulatory impact analysis (RIA) noted that these estimates do not include "social costs," such as "changes in costs and benefits due to changes in economic welfare of suppliers to the electricity market or to non-electricity consumers." The agency added it "used compliance costs as a proxy for social costs."

Elsewhere in the RIA, the agency was more direct: it said it "did not monetize human health or environmental benefits associated with emissions changes."

Mercury is a deadly neurotoxin that can have particularly deleterious effects on the brains of children. Mercury emissions end up in lakes, where they have contaminated fish that may subsequently be eaten.

Any reduction in the future cost of electricity likely would be welcomed in a society increasingly concerned about rising costs of living, but the projected amount saved by the final rule is a small fraction of the Power Industry's planned capital expenditure, totaling hundreds of billions of dollars over the next five years.

Key Takeaways

• Last Friday, the EPA finalized a rule easing Biden-era amendments to the Mercury and Air Toxics Standards for coal- and oil-fired electric generators.
• The new rule, part of President Trump's efforts to support fossil fuels and dispatchable electric generation, would lower asset owners' compliance costs by an estimated $670 million in present value over the 2028-2035 period using a 3% discount rate.
• Nationwide emissions of mercury from power plants could increase by about 1.5 tons per year in 2035, to about 8.2 tons compared to the 6.7 tons allowed under the Biden-era MATS amendments.
• The EPA did not attempt to calculate "social costs" that the relaxed regulations could impose.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).