The Trump administration Wednesday finalized a rule to repeal and replace a capstone Obama-era carbon pollution regulation that they argue exceeded the Environmental Protection Agency’s (EPA) authority.

The new replacement rule to the Clean Power Plan (CPP), deemed the Affordable Clean Energy (ACE) rule, aims to give states more time and authority to decide how to implement the best new technology to ease net emissions from coal-fired plants.

“Under the CPP, the EPA Obama administration went beyond implementing best technology,” said a senior EPA official on a call with reporters Wednesday. “Under the CPP the Obama administration actually imposed emissions reductions on each and every state. We don’t believe that’s an EPA role or authority under the [Clean Air Act.]”

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The result of the relaxed rule, the official said, could mean individual coal plants might increase their overall emissions. But, the official said, across the board the agency expects emissions to drop.

“We project that at full implementation, emissions from the sector will decrease. It’s possible that some emissions will go up but emissions rate will go down,” the official said.

“This regulation does not cap emissions, does not set a state-wide cape or a facility cap — we don’t cap emissions, we limit emissions rate.”

EPA officials estimated that under the rule the U.S. power sector would see CO2 emissions drop as much as 35 percent below 2005 levels.

"Unlike the Clean Power Plan, ACE adheres to the Clean Air Act and gives states the regulatory certainty they need to continue to reduce emissions and provide a dependable, diverse supply of electricity that all Americans can afford," said EPA Administrator Andrew Wheeler Andrew WheelerOVERNIGHT ENERGY: California seeks to sell only electric cars by 2035 | EPA threatens to close New York City office after Trump threats to 'anarchist' cities | House energy package sparks criticism from left and right EPA threatens to close New York City office after Trump threats to 'anarchist' cities The conservative case for phasing out hydrofluorocarbons MORE in a statement.

The Trump administration's argument for the rule change has largely centered on the conclusion that the Obama-era rule picked winners and losers in the energy sector.

Obama’s plan aimed to transition the nation’s electrical grid off coal-fired power plant reliance. The emissions reductions proposed in CPP largely targeted coal plants.

The Trump administration, which has championed coal and the continuation of fossil fuel production, said the plan aimed to unlawfully change the energy marketplace.

“It relied upon generation shifting. It looked at the power sector as a whole, and relied upon the idea that the regulation could effectively force reductions at coal plants,” the official said of Obama’s CPP. “We believe this is not legal, and goes well beyond our authority from the Clean Air Act.”

Critics, including former EPA officials under Obama, argue that the new rule would do little to cut carbon emissions at a time when climate change is becoming a growing global concern.

“The proposed replacement rule takes a very different approach to best system of emission reduction,” said Janet McCabe, former EPA acting Assistant Administrator for the Office of Air and Radiation under Obama, who helped devise the CPP.

“It constrains it to only things power plants can do within their fence lines. It gives them significantly more time to work with their utilities, and lots of opportunities to decide that little or no technologies are cost-effective or needed to be implemented,” she said on a call with reporters Tuesday.

The new rule will give states three years to devise plans for meeting the new carbon emissions standards and the EPA another year after to approve their proposal.

Carbon capture technology — a new technology being considered by many as a potential fix to climate change — would not qualify as a solution under the new EPA rule.

The plan would also offer coal plants opportunities to upgrade facilities to produce more energy with less fuel, while eliminating a review process that mandates older power plants to mitigate their emissions levels.

The coal industry has argued that upgrades to plants are costly, and have led to plant closings. The administration’s overhaul of climate change regulations could help coal plants stay in operation longer because they’ll be able to continue to function without having to invest in modernization controls.

Joseph Goffman, the former associate assistant administrator for Climate in EPA's Office of Air and Radiation, said the new rule would actually force states to invest in upgrading coal fired plants, instead of letting them retire.

About 40 percent of U.S. coal-fired power plants have closed or have plans to shutter, according to the American Coalition for Clean Coal Electricity.

"What’s perverse about this rule, if and when it's implemented, it will require states to engage with each of the coal fired power plants in their jurisdiction ... if in fact some states require utilities to adopt these measures, that means utilities will be making investments in coal fire power plants, which means the plant's meaningful life will be extended," he said on a call with reporters Tuesday.

The new plan will likely set off a huge battle with environmental groups, who argue it would exacerbate global warming and have promised to fight it in court.

This story was updated 1:40 p.m.