Powerstation in Morgantown, West Virginia, USA
America’s data centers need more and more electricity. At the same time, Donald Trump’s administration wants to free coal- and gas-fired power plants from key federal CO₂ restrictions. The two developments are increasingly intertwined: The United States wants to lead the global AI race while bringing new power generation online as quickly as possible. But the planned deregulation goes far beyond a short-term response to rising electricity demand. It is part of an effort to fundamentally reshape US climate and energy policy.
One of Biden’s most important climate rules is set to disappear
The US Environmental Protection Agency is expected to repeal federal greenhouse gas standards for fossil-fuel power plants.
EPA Administrator Lee Zeldin is due to announce the move on Monday around a meeting of G20 energy ministers in Houston, according to consistent media reports. As of Monday afternoon in Europe, the final rule had not yet been published by the agency.
The regulations concerned were adopted under President Joe Biden in 2024. They imposed CO₂ limits on new gas-fired power plants and standards for existing coal-, oil- and gas-fired facilities.
Coal plants expected to remain in operation for many years and new gas plants serving baseload demand were required to make substantial long-term cuts in their emissions. For heavily utilized new gas turbines, the rule established a standard from 2032 based on capturing 90 percent of carbon emissions. Coal plants operating over the longer term faced similarly stringent requirements or limits on how long they could continue to run.
The Biden-era EPA estimated that the rules could prevent around one billion metric tons of greenhouse gas emissions through 2047. The power sector remains one of the largest sources of US emissions.
The Trump administration now wants to reverse almost the entire approach.
The EPA is challenging more than the emissions limits
The political implications go beyond individual carbon thresholds.
In June 2025, the Trump EPA had already proposed eliminating all greenhouse gas standards for fossil-fuel power plants under Section 111 of the Clean Air Act.
Its argument was broader than simply claiming the Biden rules were too costly. The current EPA maintains that before regulating emissions from a category of power plants, it must determine that those emissions contribute significantly to dangerous air pollution. The agency now argues that this legal threshold is not met for greenhouse gas emissions from fossil power plants.
That means the administration is not merely challenging the level of regulation.
It is challenging part of the legal reasoning that allows the EPA to regulate carbon emissions from power plants in this way at all.
If that interpretation survives court challenges, a future administration could find it considerably more difficult simply to reinstate comparable rules. Extensive litigation is therefore expected. Whether the new legal position will ultimately survive judicial review remains uncertain.
An important distinction is necessary here. In February, the EPA had already rescinded the 2009 “Endangerment Finding” underpinning federal greenhouse gas regulation for motor vehicles under a different provision of the Clean Air Act.
The forthcoming power-plant decision concerns a separate legal route under Section 111.
Both moves form part of the same deregulatory strategy, but they are not legally identical.
Climate policy becomes energy policy for the AI era
The Trump administration does not justify the rollback on ideological grounds alone.
It explicitly links deregulation to the question of how the US can generate enough electricity in the years ahead.
The EPA had already argued in 2025 that repealing the rules would improve grid reliability, lower energy costs and strengthen domestic energy production. The agency estimated that eliminating the standards could avoid as much as $19 billion in regulatory costs over roughly two decades, equivalent to around $1.2 billion a year.
Those figures come from the deregulatory agency itself rather than from an independent cost assessment.
At the same time, US electricity consumption is rising again after years of relatively modest growth.
The Energy Information Administration expects electricity demand to reach about 4.27 trillion kilowatt-hours in 2026 and roughly 4.35 trillion in 2027 — both record levels.
Data centers and artificial intelligence are among the main drivers.
An updated analysis published by Lawrence Berkeley National Laboratory in June illustrates the scale of the change.
Data centers accounted for approximately 4.4 percent of total US electricity consumption in 2023. By 2030, the latest model puts their share at 11.8 percent in its central scenario. Depending on technological and market developments, the estimate ranges from 9.5 to 15.3 percent.
Within only a few years, roughly one in every nine kilowatt-hours consumed in the United States could therefore be used by data centers.
Coal and gas are meant to remain available
The Trump administration explicitly views fossil-fuel generation as part of the response.
That can be seen beyond the EPA’s regulatory agenda. The Department of Energy has repeatedly sought to delay planned closures of older coal-fired power plants, citing rising electricity demand and grid reliability — including growing demand from data centers.
On Friday, however, the administration suffered a legal setback.
A federal appeals court overturned an order that had forced the J.H. Campbell coal-fired power station in Michigan to remain open despite plans for closure. The judges unanimously found that the administration had exceeded its emergency powers.
According to information submitted in the proceedings, the additional operating costs had already reached around $295 million.
The case highlights another dimension of the debate: The conflict is not simply between climate protection and security of supply.
It is also about which power plants remain economically viable — and who ultimately pays to keep them running.
Removing climate rules does not guarantee a coal comeback
The outlook is more complicated than the political rhetoric sometimes suggests.
Even current US government forecasts do not predict a return to coal-dominated electricity generation.
According to the latest EIA estimates, coal’s share of US electricity generation is expected to fall from around 17 percent in 2025 to about 14 percent by 2027.
Natural gas is likely to remain the largest source at roughly 40 percent. Meanwhile, renewables are expected to increase their share from 24 to about 27 percent, while nuclear power remains near 18 percent.
Deregulation can remove costs and legal barriers. It cannot automatically reverse the economics of competing technologies.
Older coal plants still have to compete with increasingly inexpensive solar and wind generation, batteries, new gas plants and nuclear energy. Maintenance costs, fuel prices and regional electricity-market structures also matter.
The administration’s policies may therefore extend the life of individual fossil-fuel plants and make new gas capacity easier to build without necessarily triggering a nationwide renaissance of coal.
For natural gas, the connection with the data-center boom is already clearer.
Utilities in several regions are planning new gas-fired generation to meet demand from large data centers. Analyses published this year suggest that gas plants built specifically to serve those facilities could become a significant source of additional greenhouse gas emissions.
Mercury remains regulated — but under weaker standards
The EPA has also loosened rules governing other pollutants.
In February, the agency reversed tighter requirements introduced under Biden in 2024 for mercury and other toxic emissions from coal- and oil-fired power plants.
That move restored older standards, including less stringent mercury requirements for lignite plants and less restrictive monitoring rules for particulate pollution.
It does not mean coal plants can now emit unlimited amounts of mercury.
The basic Mercury and Air Toxics Standards remain in place. What the administration removed were additional restrictions introduced in 2024.
That distinction also matters for the expected CO₂ decision. Carbon rules concern greenhouse gases. Conventional pollutants such as mercury, sulfur dioxide, nitrogen oxides and particulate matter are regulated under separate provisions.
The electricity challenge is real — the fossil-fuel response is a political choice
The surge in electricity demand from AI and data centers presents the United States with a genuine infrastructure challenge.
New power plants alone will not solve it. Transmission networks must be expanded, new connections built and additional generation and storage capacity integrated into the grid.
In some regions, announced large-scale electricity consumers are already growing faster than available generation and grid capacity.
But that does not mean repealing carbon rules for fossil-fuel power plants is technically unavoidable.
Rising demand can in principle be met through different combinations of natural gas, renewable energy, nuclear power, energy storage, transmission expansion and greater efficiency.
Which technologies governments favor, subsidize or exempt from environmental regulation is a political decision — not a law of engineering.
That is what gives the expected EPA move its broader significance.
The Trump administration is responding to the digital economy’s growing appetite for electricity not simply by trying to increase supply. It is tying the AI boom to a fundamental restructuring of US climate and energy policy.
If the EPA’s new legal interpretation survives the courts, its effects could last well beyond the current administration.
The electricity demand created by artificial intelligence would then influence not only how much energy America produces.
It could also help determine which climate rules are legally possible for producing that energy in the future.
SK
