U.S. court deals final blow to Trump EPA's clean power rule replacement

WASHINGTON (Reuters) - A federal court on Tuesday struck down the administration of President Donald Trump’s scaled-down replacement for the Obama era’s signature climate change regulation for power plants, dealing a final blow to Trump’s environmental deregulatory agenda on his last day in office.

FILE PHOTO: Steam rises out of chimneys at the Big Bend Power Station owned and operated by Tech Energy in Apollo Beach, Florida U.S., August 14, 2019. REUTERS/Lucas Jackson/File Photo

The U.S. Court of Appeals for the District of Columbia Circuit decided unanimously to toss the Environmental Protection Agency’s Affordable Clean Energy rule, which constrained how carbon emissions from power plants are regulated, and remanded it to the agency, which will prioritize climate change under the incoming administration of President-elect Joe Biden.

The decision to strike down the rule was made by a three-judge panel comprised of two Democratic appointees and one Trump-appointed judge.

They considered whether the federal Clean Air Act requires the EPA to limit new rules to reduce emissions to a particular power plant, the way the Trump EPA interpreted it, or if the agency can take a sector-wide approach to regulating emissions.

“Because promulgation of the ACE Rule and its embedded repeal of the [Obama] Clean Power Plan rested critically on a mistaken reading of the Clean Air Act, we vacate the ACE Rule and remand to the Agency,” the judges wrote.

The decision comes after environmental groups and Democratic-led states argued in the D.C. Circuit Court in October that the repeal of Obama’s Clean Power Plan was illegal. Republican-led states and industry groups supported Trump’s EPA.

The decision could empower incoming leaders to take an aggressive approach as the EPA returns to the drawing board.

“They will be unencumbered by some of the artificial constraints (on regulating the sector) that the Trump EPA invented,” said Environmental Defense Fund senior attorney Ben Levitan.

The Supreme Court, which had stopped the Clean Power Plan from entering into force in 2016, may discourage Biden’s EPA, however.

“The pre-Trump Supreme Court expressed skepticism about it when it stopped the Clean Power Plan from coming into effect. The current (majority conservative) Supreme Court is likely to be even more skeptical,” said Jeff Holmstead, a partner at Bracewell, which represents energy companies.

Reporting by Valerie Volcovici; additional reporting by Lawrence Hurley; Editing by Dan Grebler and Sonya Hepinstall