Unpacking EPA’s newly proposed power emissions rule

What this episode covers

John Larsen, a partner at the Rhodium Group, analyzes the Biden administration's newly proposed EPA power plant emissions rules, which mandate 90% carbon capture or hydrogen co-firing for large new and existing gas plants by the mid-2030s. Larsen explains that the rule’s structure, which exempts low-capacity-factor peaker plants, likely incentivizes existing gas plants to reduce their capacity factors rather than invest in expensive carbon capture technology (CCS) or hydrogen infrastructure. The discussion covers the legal challenges expected from the DC Circuit and Supreme Court, the role of state implementation plans, and how the Inflation Reduction Act’s tax credits interact with these regulatory 'sticks' to shape market outcomes.