Potential Future Actions by Congress and EPA on Emissions and Resulting Opportunity

Implications:     The U.S. Court of Appeals for the District of Columbia Circuit struck down the EPA’s Clean Air Interstate Rule (CAIR) to reduce NOx and SO2 in 28 Eastern United States.  This follows a court decision striking down EPA’s Clean Air Mercury Rule (CAMR).       These court decisions will eventually cause actions and opportunities in the emissions control space.

Analysis:     The court decisions striking down CAIR that required a reduction in NOx and SO2 in 28 Eastern states and CAMR that required a reduction in mercury will allow emissions at the status quo for a period of time.  It is unlikely that Congress and EPA will allow this status quo on emissions to continue.  Instead, it is likely that Congress and EPA will develop new, and stricter, emissions reductions rules on NOx, SO2, and mercury.  It could also include CO2 as well. 

     In the meantime, coal-fired generators will not commit to emissions retrofits to comply with federal rules until new rules are known.  Those environmental retrofits underway or committed will be completed over the next 18 to 24 months. 

     The new emissions rules will likely be more limiting than those under the cap and trade CAIR and CAMR programs.  As a result, it will actually require more emissions control equipment be installed on coal plants than under CAIR and CAMR that was struck down by the courts.  The remaining question is the effective date(s) for these likely new emissions-limiting rules.