US EPA’s power plant rules reduce CO2 emissions but can achieve more cost-efficient and deeper reduction by regulating existing gas-fired plants

Targeting one of the largest CO2-emitting sectors, the US Environmental Protection Agency (EPA) finalized new regulations on power plant emissions in 2024. However, the regulations are complex, with multiple mitigation options for compliance, making it difficult to understand their consequential effects on total CO2 emissions. We evaluate these effects by enhancing a capacity expansion model via incorporating new detailed operational constraints tailored to different technologies based on the EPA’s new rules. We show that the new rules could nearly double power sector CO2 emissions reductions through 2040, bringing emissions to about 51% below the 2022 level at low average cost per ton avoided, driven primarily by coal retirements. However, the rules omit regulations on existing natural gas generators, encouraging greater use of inefficient older gas plants. We find that emissions could be cost-effectively driven to 81%–88% below 2022 levels if the EPA’s rules were applied equally to all gas generators, regardless of vintage.