On April 25, 2024, the U.S. Environmental Protection Agency released final regulations aimed at reducing pollution from fossil fuel-fired power plants, which may have important implications for existing and future carbon capture/sequestration and storage projects in the U.S. A number of ambitious policies focused on such projects have also been proposed in Europe.
On April 25, 2024, the U.S. Environmental Protection Agency (the “EPAâ€) released final regulations aimed at reducing pollution from fossil fuel-fired power plants, which may have important implications for existing and future carbon capture/sequestration and storage (“CCSâ€) projects in the U.S. The final EPA regulations are similar to the proposed regulations that were issued in May 2023, except for the finalization of greenhouse gas (“GHGâ€) emission guidelines related to existing fossil fuel-fired stationary combustion turbines, which has been deferred to a later date.1 The final EPA regulations become effective on July 8, 2024. In Europe, the European Union (the “EUâ€) Commission has also recently proposed a number of ambitious policies focused on CCS, which are described below.
A. BRIEF OVERVIEW OF FINAL EPA REGULATIONS
The final EPA regulations aim to address GHG emissions from fossil fuel-fired electric generating units by (i) establishing GHG emission guidelines for existing fossil fuel-fired steam-generating units (including coalfired and oil- or gas-fired steam-generating units) and (ii) establishing new performance standards for GHG emissions from (a) new and reconstructed fossil fuel-fired stationary combustion turbines and (b) coal-fired steam-generating units that undertake large modifications (defined as modifications that increase hourly emission rates by more than 10%), each of which is described below and could have important implications for CCS projects moving forward.2 Existing coal-fired steam-generating units that will operate on or after January 1, 2039 are required to reduce their annual emission rates (measured in pounds of CO2 per MWh-gross) by 88.4% (based on the implementation of CCS with 90% capture as the best system of emission reduction (“BSERâ€)) by January 1, 2032.3 Existing4 coal-fired steam-generating units that will operate on or after January 1, 2032, but will cease operations before January 1, 2039, are required to reduce their annual emission rate by 16% (based
