Trump’s EPA Rollbacks Could Be a Major Win for the Power Sector

The Environmental Protection Agency has had a busy 2025, and it started off with a bang. It announced 31 major regulatory initiatives—many involving reconsideration of rules promulgated by the Biden administration. President Donald Trump, alongside EPA Administrator Lee Zeldin, has hosted events and signed executive orders aimed at reviving the use of coal for reliable energy across the country.

And the agency’s long-awaited Unified Agenda set forth an ambitious deregulatory scheme. Yet uncertainty remains.

Most of the EPA’s deregulatory actions of the past year were proposed rules. Proposed rules can, and often do, change on their way to becoming final rules. With 2025 winding down, and the government shutdown continuing unabated, 2026 could be the year these regulatory changes are made final or take effect.

Power sector Clean Air Act regulations are at the heart of the deregulatory agenda, with no less than 25 items in EPA’s Unified Agenda affecting power sector air regulations.

Amid all this change, it can be difficult to know where to focus one’s attention. Here are four major regulatory changes to look out for in the new year:

Greenhouse Gas Standards. The EPA has proposed two pathways for future regulation of greenhouse gas emissions from the power sector. Both paths would undo all or part of the Biden administration’s 2024 final GHG standards.

One pathway would eliminate all GHG emission standards for the entire sector, and the EPA would cease to regulate GHGs altogether. This is a major departure from the past administrations’ approach to GHG regulation and involves a fundamental shift in how Section 111 of the Clean Air Act is interpreted. If finalized, this pathway would make continuing to run coal-fired electric generating units more practical and eliminate barriers to permitting other new generation, especially large baseload units.

In the second proposal, regulation of GHG emissions from the power sector remains but certain, and more onerous or infeasible requirements are rolled back, such as coal unit sunsetting and carbon capture and storage requirements. This pathway would help coal-fired units survive and would assure that new baseload combustion turbines could operate at full capacity without CCS.

Either scenario could change the trajectory of how long the power sectors plans to keep running its existing coal fleet, and how it plans for new generation. The Unified Agenda estimates a final rule will be released in December 2025.

MATS Revisions. The Biden administration’s 2024 revisions to the Mercury and Air Toxics Standards are likely on their way out. The revisions slashed mercury emission limits from lignite-fired EGUs by more than one-half and lowered filterable particulate matter from all coal-fired units, as well as required all units subject to MATS install continuous monitoring systems.

The Trump administration dealt its first blow to this rule by issuing “Presidential Exemptions” that extended the compliance deadline for MATS from to July 2029. Next, EPA issued a proposed rule to repeal the majority of the MATS Rule, including the three requirements set forth above.

This proposed rule is likely to be finalized without substantial change. The Unified Agenda sets an estimated date for a final rule of December 2025. If finalized, this rule will ensure achievable emissions limitations. Coal plants won’t need to commence expensive emission control upgrade projects that could have been a driver for future retirements.

Good Neighbor Plan. The Biden administration took major strides to finalize a federal plan to regulate interstate transport of ozone emissions in its “Good Neighbor Plan.” The plan initially required 23 states to comply with stringent seasonal NOx emissions requirements through the EPA’s federal trading program to curb ozone emissions to resolve good neighbor obligations for the 2015 ozone National Ambient Air Quality Standards.

Since its debut in 2023, judicial stays and decisions caused myriad states to drop out of the plan, and finally the agency stayed the rule in response to the Supreme Court’s judicial stay in June 2024. The Trump administration has announced its intention to reconsider the Good Neighbor Plan and underlying good neighbor state implementation plan disapprovals that provide the EPA with authority to implement a federal plan.

The EPA plans to pursue a two-phased approach to revisit the Good Neighbor Plan and the underlying SIP disapprovals. While proposed rules were originally expected in August and October, the EPA has yet to release its proposals. The agency may reverse SIP disapprovals, which would obviate the need for a federal plan for those states. It’s unclear what approach the EPA will take in formulating a new federal plan for states that don’t have satisfactory ozone transport SIPs or failed to submit a SIP altogether. The new Good Neighbor approach may provide relief to power plants that would have been constrained by lower NOx allowances during the summer, which may have been a driver for retirement for certain coal-fired plants.

Particulate Matter Air Quality Standard. In 2024, the Biden administration lowered the primary PM2.5 NAAQS from 12 to 9 µg/m3 by reversing a 2020 rule to retain the 2012 PM NAAQS (2024 PM NAAQS Reconsideration). The Trump EPA is revisiting the 2024 PM NAAQS Reconsideration. EPA planned to issue a proposed rule by July 2025, which hasn’t yet occurred. The Unified Agenda had projected a final rule in January 2026, although court filings state it will be finalized by February 2026.

EPA is most likely to issue a proposed rule determining that the agency shouldn’t have “reconsidered” the PM NAAQS and reinstate the 12 µg/m3 standard. Raising the PM NAAQS would ease permitting for projects that require modeling, including projects to build new generation, as more areas of the country would remain in attainment with the higher standard.

Regulatory change is coming and could result in an easing of standards and regulations that significantly affect power plants, both in terms of everyday compliance and longer-term resource planning.

However, any final rule is likely to be challenged by opponents in court. It will be important to monitor judicial activity to determine the regulatory durability of the Trump administration’s rollbacks.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Claire Johnson is an attorney in Balch & Bingham’s environmental and natural resources practice.

Liz Williamson is a partner in Balch & Bingham’s environmental and natural resources practice.

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