Oct 72025

EPA, Departments of Interior and Energy Announce New Coal-Friendly Policy Initiatives

Samuel B. Boxerman and Rose Quam-Wickham
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On September 29, 2025, the Trump Administration unveiled a sweeping set of policy initiatives aimed at revitalizing the U.S. coal sector that spans multiple federal agencies and includes measures such as increased funding and financial incentives, relief from environmental regulatory requirements, and increased access to public lands. In the unveiling, the Administration emphasized the importance of American “energy dominance” and the increased demand for electricity to power artificial intelligence (AI) in order to ensure that the United States wins “the AI arms race” — two themes commonly highlighted by the Administration and its top officials.

As part of the policy package, the Department of the Interior (Interior) announced that it will open more than 13 million acres of public land for potential coal leasing and reduce the federal coal royalty rate from 12.5% to 7%. While both actions were included as provisions in the One Big Beautiful Bill Act (the Act) that was enacted in July 2025, the 13.1 million acres of public land being made available for new coal leases is more than triple the number of acres required by the Act. Interior also announced “streamlined approvals” for projects in Montana, Wyoming, and Tennessee — lifting a Biden-era moratorium on new coal leasing in the Powder River Basin — in addition to increased efforts to recover minerals from waste created by coal mining.

The Department of Energy (Energy) also announced new coal-friendly policies that include $625 million in funding for coal-related initiatives and infrastructure. This includes: (1) $350 million targeted toward restarting or retrofitting existing coal plants to improve near-term reliability and capacity of coal plants; (2) $175 million for funding improvement of coal plants serving rural communities; (3) $50 million to assist developing and implementing more advanced wastewater management systems at existing coal plants; and (4) a combined $50 million to support and improve efforts to efficiently and effectively co-fire or develop dual fuel plants that have been engineered to run on both coal and other types of fuel like natural gas.

Similarly, the Environmental Protection Agency (EPA) announced two major deregulatory actions intended to reduce regulatory requirements for coal-fired power plants. First, EPA will — through a proposed rule and a direct final rule — extend preexisting deadlines for coal-fired power plants to comply with existing wastewater effluent limits. Both the proposed rule and direct final rule solicit public comments on the preexisting compliance requirements and their impacts, with both comment periods ending on November 3, 2025. Second, EPA announced an Advanced Notice of  Proposed Rulemaking (ANPRM) to solicit public comment on potential regulatory changes regarding EPA’s Regional Haze Rule (RHR), promulgated in 1999, which directed states to implement pollution control plans to improve visibility and air quality at national parks. According to EPA’s press release on its deregulatory actions, the RHR requirements “impose[] significant costs on power plants and other sectors, calling into question the supply of affordable and reliable energy for American families.”  The ANPRM’s comment period ends December 1, 2025.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Samuel B. Boxerman

Washington, D.C.

sboxerman@sidley.com

Rose Quam-Wickham

Washington, D.C.

rquamwickham@sidley.com

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