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The end has been coming for a while. With the EPA’s new power plant emissions rules, though, it’s gotten a lot closer.
There’s no question that coal is on its way out in the U.S. In 2001, coal-fired power plants generated about 50% of U.S. electricity. Last year, they were down to about 15%.
On Thursday, however, the Biden administration arguably delivered a death blow. New carbon emission limits for coal plants establish a clear timeline by which America’s remaining coal generators must either invest in costly carbon capture equipment or close. With many of these plants already struggling to compete with cheaper renewables and natural gas, it’s not likely to be much of a choice. If the rule survives legal challenges, the nation’s coal fleet could be extinct by 2039.
Coal plant retirement presents a two-pronged problem: Utilities have to figure out how to replace lost power generation, and the surrounding community must reckon with the lost tax revenue and jobs from the power plants and the coal mines that supplied them.
From the beginning, Biden has promised to help revitalize the economies of the communities left in coal’s wake. “We’re never going to forget the men and women who dug the coal and built the nation,” he said when he laid out his energy transition plan just a week after entering office. “We’re going to do right by them.”
Economic revitalization doesn’t happen overnight, of course, or even in the span of a four-year term. But money is already rolling out in the form of targeted investments in new energy sources, businesses, and jobs in coal communities, and there’s more to come.
It’s the proactive planning aspect, however, that remains underresourced and scattershot.
Emily Grubert, a civil engineer and sociologist at the University of Notre Dame, told me there are few plants that are expected to make it past 2039 regardless, due to their age and the economics of operating them. The emissions rule’s real potential, then, is to bring about a more orderly — and potentially less painful — exit.
A Heatmap analysis of Energy Information Administration data found that of the nation’s roughly 230 remaining coal plants, 38 are scheduled to fully shut down by 2032. These plants won’t have to make any changes under the new rule. An additional five will shutter by 2039. These will be required to reduce their emissions in the interim, beginning in 2030, by replacing some of the coal they burn with natural gas. That leaves about 190 plants with either partial retirement plans or no plans at all that will be forced to make a decision between carbon capture and shutting down.
Grubert told me that many of these plants have, in fact, communicated informal plans to shut down that are not recorded in the federal data. That aside, she called it “amazing” how many have no retirement plans at all.
For surrounding communities, an impending coal transition can look really different in different places, depending on geography and how diverse the local economy is. Still, the first step should be the same everywhere. “What you need to do, really practically, is figure out what that plant is supporting,” Grubert told me. “What needs to be replaced, for whom, and by when?
It’s a lot more concrete than it seems: It’s some specific number of people, it’s some specific amount of tax revenue. It’s much easier to move forward once you actually know what those are.”
How much of that work has been done so far depends, in part, on the state. Some, like Colorado, New Mexico, and Illinois, have established new positions or entirely new offices dedicated to helping communities transition off fossil fuels. But other states, like Wyoming and Ohio, have advanced measures to keep coal plants open as long as possible.
Successful planning also depends on how clearly a retirement date is articulated and stuck to, Jeffrey Jacquet, an associate professor of rural sociology at Ohio State University who leads a multidisciplinary research project on coal communities there, told me. Some communities have been told one date and then been blindsided when a plant has been forced to shut down years earlier for economic reasons. He noted one success story in Shadyside, Ohio, where the local school board was able to negotiate a deal to slowly step down its tax collections over four years after learning the RE Burger coal plant was going to close. “Had they not weaned us off losing that tax revenue, we would have been in terrible shape,” a school board administrator told a student on Jacquet’s project. “Fiscally we’re pretty good on solid ground now, but at one point it was an extremely bleak time.”
The new power plant rule could help address some of these problems by putting the entire country on the same set timeline, forcing plant operators to put retirement dates in writing. There’s still a risk some will fail early, in unforeseen ways, but at least communities will have been put on notice.
Those who go looking for help will find ample resources. When I started looking into all of the programs that exist to bring investment into coal communities, or otherwise help them diversify their economies, I was surprised at how much investment in coal communities had already been set in motion:
This list is far from comprehensive. In fact, there are so many programs, it’s kind of a problem.
“So much of it comes down to the local capacity to take advantage of these opportunities,” Jacquet told me. “A lot of these communities are losing population, they’re facing out-migration. Community leaders are already overworked and overstressed.” (Possible case in point: I reached out to several local groups doing coal transition work in West Virginia and Kentucky for this story, and wasn’t able to get anyone on the phone.)
This isn’t a new problem, per se. The federal government had dozens of programs and pots of money set aside for rural economic development before the Biden administration came into the White House, but they were scattered across different agencies and departments within those agencies, making it difficult for any overworked, overstressed town manager to know where to start.
Jeremy Richardson, a manager of the carbon-free electricity program at the think tank RMI, told me he was involved in a group that pitched policies to the incoming president that would help ease the process. “It shouldn’t be on the community to navigate the entire federal bureaucracy to figure out what they qualify for,” he said.
Biden took the note. In his first climate executive order, he established the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, which is building tools to help companies and local governments identify funding opportunities. Its “getting started guide,” which Richardson called a “fantastic piece of work,” walks communities and workers through 10 concrete steps, from identifying needs to developing a transition strategy to finding funding and implementing a project, with curated resources for each step. The group also established four “rapid response” teams to provide more targeted assistance to communities in areas with the highest loss of coal assets.
Jacquet summed up the group’s work as “hand holding,” stressing that it still required people at the local level that were willing and able to take advantage of these services. “I think we’re sort of seeing this phenomenon where the communities that are already best positioned to take advantage of these are going to be the ones that take advantage of it,” he said.
There are other limitations to the broader suite of federal assistance programs. For instance, even if a community is able to attract a big manufacturing project, there may be a several-years gap between the coal plant closing and the new job opportunities and local tax revenue manifesting.
That’s why the coordination efforts in states like Colorado, which was the first to establish an Office of Just Transition in 2019, are so promising. The office has a small staff of six, and a meager budget of $15 million, but is making progress by focusing on highly targeted assistance. In the town of Craig, two nearby coal-fired power plants are scheduled to retire over the next four years and four coal mines will shutter by 2030, taking with them 900 jobs and about 45% of the county’s tax revenue. A new “transition navigator” hired in January will help match the town’s needs with federal and state funding opportunities and serve as a central point of contact for coal workers and their families seeking connection to services.
“I think it’s been really helpful,” said Richardson. “They’ve had long conversations — several years of conversations — with those communities in northwest Colorado that are facing closures soon.” The office was controversial at first. Republicans called it “Orwellian” and unanimously opposed it. But in the years since, some of its staunchest critics have become its biggest champions. “To me that says that they’re doing some good work and they’re making some inroads.”
There’s progress on the energy side, too. RMI is pushing a model called “clean repowering,” enabled by a suite of IRA incentives that offer tax credits and loan guarantees for clean energy projects in fossil fuel communities. The idea is that renewable energy projects can get around the yearslong bottleneck of connecting to the grid by building in close proximity to existing fossil fuel plants. A lot of these plants have “spare” interconnection rights that a solar or wind farm could use to connect a lot sooner.
RMI found 250 gigawatts of spare rights available — which is more than the capacity of the entire existing coal fleet. “If you can build a renewable facility alongside where that fossil plant is, maybe you use the fossil plant a little less because it’s cheaper to generate from the renewables, but you know, you don’t have to close it immediately,” said Richardson.
As Daniel Raimi, a fellow at Resources for the Future, told me, even though the coal transition has been in motion for decades, it’s still early. There hasn’t been enough research. Much of the funding and programs are new. No one really knows yet what’s working, or what could work better.
The only thing that’s clear, he said, is that if these communities are going to develop alternative economic futures, they really need to begin that process now.
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Removing the subsidies would be bad enough, but the chaos it would cause in the market is way worse.
In their efforts to persuade Republicans in Congress not to throw wind and solar off a tax credit cliff, clean energy advocates have sometimes made what would appear to be a counterproductive argument: They’ve emphasized that renewables are cheap and easily obtainable.
Take this statement published by Advanced Energy United over the weekend: “By effectively removing tax credits for some of the most affordable and easy-to-build energy resources, Congress is all but guaranteeing that consumers will be burdened with paying more for a less reliable electric grid.”
If I were a fiscal hawk, a fossil fuel lobbyist, or even an average non-climate specialist, I’d take this as further evidence that renewables don’t need tax credits. The problem is that there’s a lot more nuance to the “cheapness” of renewables than snappy statements like this convey.
“Renewables are cheap and they’ve gotten cheaper, but that doesn’t mean they are always the cheapest thing, unsubsidized,” Robbie Orvis, the senior director of modeling and analysis at Energy Innovation, told me back in May at the start of the reconciliation process. Natural gas is still competitive with renewables in a lot of markets — either where it’s less windy or sunny, where natural gas is particularly cheap, or where there are transmission constraints, for example.
Just because natural gas plants might be cheaper to build in those places, however, doesn’t mean they will save customers money in the long run. Utilities pass fuel costs through to customers, and fuel costs can swing dramatically. That’s what happened in 2022 after Russia invaded Ukraine, Europe swore off Russian gas, and the U.S. rushed to fill the supply gap, spiking U.S. natural gas prices and contributing to the largest annual increase in residential electricity spending in decades. Winter storms can also reduce natural gas production, causing prices to shoot up. Wind and solar, of course, do not use conventional fuels. The biggest factor influencing the price of power from renewables is the up-front cost of building them.
That’s not the only benefit that’s not reflected in the price tags of these resources. The Biden administration and previous Congress supported tax credits for wind and solar to achieve the policy goal of reducing planet-warming emissions and pollution that endangers human health. But Orvis argued you don’t even need to talk about climate change or the environment to justify the tax credits.
“We’re not saying let’s go tomorrow to wind, water, and solar,” Orvis said. “We’re saying these bring a lot of benefitsonto the system, and so more of them delivers more of those benefits, and incentives are a good way to do that.” Another benefit Orvis mentioned is energy security — because again, wind and solar don’t rely on globally-traded fuels, which means they’re not subject to the actions of potentially adversarial governments.
Orvis’ colleague, Mike O’Boyle, also raised the point that fossil fuels receive subsidies, too, both inside and outside the tax code. There’s the “intangible drilling costs” deduction, allowing companies to deduct most costs associated with drilling, like labor and site preparation. Smaller producers can also take a “depletion deduction” as they draw down their oil or gas resources. Oil and gas developers also benefit from low royalty rates for drilling on public lands, and frequently evade responsibility to clean up abandoned wells. “I think in many ways, these incentives level the playing field,” O’Boyle said.
When I reached out to some of the clean energy trade groups trying to negotiate a better deal in Trump’s tax bill, many stressed that they were most worried about upending existing deals and were not, in fact, calling for wind and solar to be subsidized indefinitely. “The primary issue here is about the chaos this bill will cause by ripping away current policy overnight,” Abigail Ross Hopper, the CEO of the Solar Energy Industries Association, told me by text message.
The latest version of the bill, introduced late Friday night, would require projects to start construction by 2027 and come online by 2028 to get any credit at all. Projects would also be subject to convoluted foreign sourcing rules that will make them more difficult, if not impossible, to finance. Those that fail the foreign sourcing test would also be taxed.
Harry Godfrey, managing director for Advanced Energy United, emphasized the need for “an orderly phase-out on which businesses can follow through on sound investments that they’ve already made.” The group supports an amendment introduced by Senators Joni Ernst, Lisa Murkowski, and Chuck Grassley on Monday that would phase down the tax credit over the next two years and safe harbor any project that starts construction during that period to enable them to claim the credit regardless of when they begin operating.
“Without these changes, the bill as drafted will retroactively change tax policy on projects in active development and construction, stranding billions in private investment, killing tens of thousands of jobs, and shrinking the supply of new generation precisely when we need it the most,” Advanced Energy United posted on social media.
In the near term, wind and solar may not need tax credits to win over natural gas. Energy demand is rising rapidly, and natural gas turbines are in short supply. Wind and solar may get built simply because they can be deployed more quickly. But without the tax credits, whatever does get built is going to be more expensive, experts say. Trade groups and clean energy experts have also warned that upending the clean energy pipeline will mean ceding the race for AI and advanced manufacturing to China.
Godfrey compared the reconciliation bill’s rapid termination of tax credits to puncturing the hull of a ship making a cross-ocean voyage. You’ll either need a big fix, or a new ship, but “the delay will mean we’re not getting electrons on to the grid as quickly as we need, and the company that was counting on that first ship is left in dire straits, or worse.”
A new subsidy for metallurgical coal won’t help Trump’s energy dominance agenda, but it would help India and China.
Crammed into the Senate’s reconciliation bill alongside more attention-grabbing measures that could cripple the renewables industry in the U.S. is a new provision to amend the Inflation Reduction Act to support metallurgical coal, allowing producers to claim the advanced manufacturing tax credit through 2029. That extension alone could be worth up to $150 million a year for the “beautiful clean coal” industry (as President Trump likes to call it), according to one lobbyist following the bill.
Putting aside the perversity of using a tax credit from a climate change bill to support coal, the provision is a strange one. The Trump administration has made support for coal one of the centerpieces of its “energy dominance” strategy, ordering coal-fired power plants to stay open and issuing a raft of executive orders to bolster the industry. President Trump at one point even suggested that the elite law firms that have signed settlements with the White House over alleged political favoritism could take on coal clients pro bono.
But metallurgical coal is not used for electricity generation, it’s used for steel-making. Moreover, most of the metallurgical coal the U.S. produces gets exported overseas. In other words, cheaper metallurgical coal would do nothing for American energy dominance, but it would help other countries pump up their production of steel, which would then compete with American producers.
The new provision “has American taxpayers pay to send metallurgical coal to China so they can make more dirty steel and dump it on the global market,” Jane Flegal, the former senior director for industrial emissions in the Biden White House, told me.
The U.S. produced 67 million short tons of metallurgical coal in 2023, according to data from the U.S. Energy Information Administration, more than three-quarters of which was shipped abroad. Looking at more recent EIA data, the U.S. exported 57 million tons of metallurgical coal through the first nine months of 2024. The largest recipient was India, the final destination for over 10 million short tons of U.S. metallurgical coal, with almost 9 million going to China. Almost 7 million short tons were exported to Brazil, and over 5 million to the Netherlands.
“Metallurgical coal accounts for approximately 10% of U.S. coal output, and nearly all of it is exported. Thermal coal produced in the United States, by contrast, mostly is consumed domestically,”according to the EIA.
The tax credit comes at a trying time for the metallurgical coal sector. After export prices spiked at $344 per short ton in the second quarter of 2022 following Russia’s invasion of Ukraine (much of Ukraine’s metallurgical coal production occurs in one of its most hotly contested regions), prices fell to $145 at the end of 2024, according to EIA data.
In their most recent quarterly reports, a number of major metallurgical coal producers told investors they wanted to reduce costs “as the industry awaits a reversal of the currently weak metallurgical coal market,” according to S&P Global Commodities Insights, citing low global demand for steel and economic uncertainty.
There was “not a whisper” of the provision before the Senate’s bill was released, according to the lobbyist, who was not authorized to speak publicly. “No one had any inkling this was coming,” they told me.
But it’s been a pleasant surprise to the metallurgical coal industry and its investors.
Alabama-based Warrior Met Coal, which exports nearly all the coal it produces, reported a loss in the first quarter of 2025,blaming “the combination of broad economic uncertainty around global trade, seasonal demand weakness, and ample spot supply is expected to result in continued pressure on steelmaking coal prices.” Its shares were up almost 6% in afternoon trading Monday.
Tennessee-based Alpha Metallurgical Resources reported a $34 million first quarter loss in May, citing “poor market conditions and economic uncertainty caused by shifting tariff and trade policies,” and said it planned to reduce capital expenditures from its previous forecast. Its shares were up almost 7%.
While environmentalists have kept a hawk’s eye on the hefty donations from the oil and gas industry to Trump and other Republicans’ campaign coffers, it appears that the coal industry is the fossil fuel sector getting specific special treatment, despite being far, far smaller. The largest coal companies are worth a few billion dollars; the largest oil and gas companies are worth a few hundred billion.
But coal is very important to a few states — and very important to Donald Trump.
The bituminous coal that has metallurgical properties tends to be mined in Appalachia, with some of the major producers and exporters based in Tennessee and Alabama, or larger companies with mining operations in West Virginia.
One of those, Alliance Resource Partners, shipped almost 6 million tons of coal overseas. Its chief executive, Joseph Craft, andhis wife, Kelly, the former ambassador to the United Nations, are generous Republican donors. Craft was a guest at the White House during the signing ceremony for the coal executive orders.
Representatives of Warrior, Alpha Metallurgical, and Alliance Resources did not respond to a requests for comment.
While coal companies and their employees tend to be loyal Republican donors, the relative small size of the industry puts its financial clout well south of the oil and gas industry, where a single donor like Continental Resources’s Harold Hamm can give over $4 million and the sector as a whole can donate $75 million. This suggests that Trump and the Senate’s attachment to coal has more to do with coal’s specific regional clout, or even the aesthetics of coal mining and burning compared to solar panels and wind turbines.
After all, anyone can donate money, but in Trump’s Washington, only one resource can be beautiful and clean.
Two former Department of Energy staffers argue from experience that severe foreign entity restrictions aren’t the way to reshore America’s clean energy supply chain.
The latest version of Congress’s “One Big, Beautiful Bill” claims to be tough on China. Instead, it penalizes American energy developers and hands China the keys to dominate 21st century energy supply chains and energy-intensive industries like AI.
Republicans are on the verge of enacting a convoluted maze of “foreign entity” restrictions and penalties on U.S. manufacturers and energy companies in the name of excising China from U.S. energy supply chains. We share this goal to end U.S. reliance on Chinese minerals and manufacturing. While at the U.S. Department of Energy and the White House, we worked on numerous efforts to combat China’s grip on energy supply chains. That included developing tough, nuanced and, importantly, workable rules to restrict tax credit eligibility for electric vehicles made using materials from China or Chinese entities — rules that quickly began to shift supply chains away from China and toward the U.S. and our allies.
That experience tells us that the rules in the Republican bill will have the opposite effect. In reality, they will make it much more difficult for U.S. companies to move supply chains away from Chinese control. The GOP’s proposed restrictions require every developer of a critical minerals project, advanced manufacturing facility, or clean energy power plant to sift through their supply chains and contracts for any relationship with a Chinese (or Russian, Iranian, or North Korean) entity. Using a Chinese technology license, or too many subcomponents, or materials produced in China — even if there are few or no alternatives — would be enough to render a company ineligible for the very incentives they need to finance and build new U.S. energy production or manufacturing facilities.
This would put companies in the position of having to prove the absence of Chinese entanglements (and guarantee that there will be none in the future) to qualify for tax credits, an all but impossible task, particularly given the untested set of new rules. Huge portions of the supply chain have flowed through China for decades, including 65% of global lithium processing and 97% of solar wafer manufacturing. American companies are already working to distance themselves from Chinese expertise and components, but the complex, commingled nature of global supply chains and corporate business structures make it infeasible to flip the switch overnight.
On top of that, the latest version of the bill would impose a brand new tax on any new solar and wind projects that have too much foreign entity “assistance,” while providing the Treasury Secretary carte blanche for determining what that might be. The result: An impossible bind, whereby the very sectors that need the most support to disentangle from China are now the ones most penalized by the new Republican “foreign entity” restrictions.
The fact is that China is ahead, not behind, in many energy sectors, and America desperately needs help playing catch-up. Ford’s CEO has called Chinese battery and electric vehicle technologies “an existential threat” to U.S. automaking. In energy supply chains for nuclear, solar, batteries, and critical minerals, China is not merely producing cheap knockoffs of American inventions, it is churning outcutting-edge battery chemistries, advancedmanufacturing processes, and high-speedcharging systems, all at lower cost. And at least until the Inflation Reduction Act enacted incentives for U.S. manufacturing and deployment, the gap between the U.S. and China waswidening.
These untested foreign entity rules will widen that gap once more. Since the start of the year, developers have abandoned more than $14 billion in domestic clean energy deployment and manufacturing projects, citing the uncertain tariff and tax policy environment, and that was before the new tax on solar and wind. New analysis from Energy Innovation finds that the latest version of the bill would reduce U.S. generation capacity by 300 gigawatts over the next decade — multiple times what we will need to power new data centers for artificial intelligence. Stopping clean energy projects in their tracks is also likely to trigger an energy price shock by constraining the very energy technologies that can be built most quickly. In the end we will cede not only our supply chains to China, but also our competitive edge in the race for AI and manufacturing dominance.
Fortunately, we have all the ingredients in this country already to achieve energy leadership. The U.S. boasts deep capital markets, a highly skilled manufacturing and construction workforce, a strong consumer economy driving demand, and, in spite of recent attacks, the world’s greatest universities and national labs. We simply need policy to provide a workable path for companies to invest with certainty, bring factories back to the United States, hire American workers, and learn to produce these technologies at scale.
With the Inflation Reduction Act’s domestic production incentives and supply chain restrictions, hundreds of companies stepped up over the past few years and made that bet, pouring billions of dollars into American supply chains. Should they be enacted, the reconciliation bill’s foreign entity rules would slam the brakes on all that activity, playing right into China’s hands.
There is a way to apply a set of carefully crafted restrictions to wean us off Chinese supply chains, but we cannot afford to saddle American energy with new taxes and red tape. If we scatter rakes across the floor for companies to step on, they will just throw up their hands and send their investments overseas, leaving us more reliant on China than before.