US President Joe Biden's administration unveiled plans to curb carbon pollution from coal- and natural gas-fired power plants, in an ambitious package that could open the door for more new wind and solar.

The Environmental Protection Agency (EPA) said the proposed regulations “will protect public health, reduce harmful pollutants and deliver up to $85bn in climate and public health benefits over the next two decades”.

EPA's proposed regulations would further Biden's goals of slashing economy-wide emissions 50-52% off 2005 baselines by 2030, while realising a carbon-free power grid by 2035 on the way towards net-zero by 2050.

If adopted, they are likely to prompt plant closures, as their owners will not want to invest in necessary technologies to comply with them. That will likely open opportunities for additional solar and wind deployment.

"We will see come coal retirements, but the way this programme is designed, this is really a decision that will made company by company, and state by state," said EPA administrator Michael Regan in a media call.

EPA’s draft rule “relies on proven, readily available technologies to limit carbon pollution and seizes the momentum already underway in the power sector to move toward a cleaner future,” said Regan.

“These proposals will help deliver tremendous benefits to the American people – cutting climate pollution and other harmful pollutants, protecting people’s health, and driving American innovation,” he added.

The proposed regulations are consistent with the EPA’s “traditional approach to establishing pollution standards under the Clean Air Act” of 1970, the agency said.

Power generation contributes 25% of US greenhouse gas emissions, trailing only transportation and industry, and the new initiative continues longstanding efforts by Democratic administrations to clean up the sector.

If implemented, the rules would strengthen performance standards for newly built fossil fuel power plants, while establishing state guidelines on carbon pollution from existing fossil fuel-fired power plants.

Former President Barack Obama’s Clean Power Plan to force all 50 states to transition from coal-fired power generation was thrown out by the Supreme Court, as was Biden's initial effort to revive Obama's scheme.

Last summer, Chief Justice John Roberts said Congress never conferred to EPA the clear and expansive authority to “substantially restructure the American energy market” through control of carbon emissions. Instead, it can set rules only for each individual power plant.

EPA said its proposals would avoid up to 617 million tonnes of total CO2 through 2042, equivalent to removing 137 million passenger vehicles, “roughly half the cars in the US”, while also slashing “tens of thousands of tonnes of particulate matter (PM2.5)”.

“In a strong and vigorous way this reinforces our trajectory in a critical sector of the economy — in the power sector — and we are moving even faster and with greater certainty in the direction of unlocking the economic upside and the public health gains associated with meeting the president’s climate targets,” national climate adviser Ali Zaidi said Wednesday.

The regulations set upper limits on pollution rates, which could be met by employing different technologies or fuels including green hydrogen for natural gas plants.

The draft also provides owners and operators of power plants with ample lead time and substantial compliance flexibilities, allowing power companies and grid operators to make sound long-term planning and investment decisions, according to EPA.

“The EPA’s new regulatory proposal is an important step forward and it comes as scientific warnings about the impacts of climate change have grown increasingly dire,” said Gregory Wetstone, CEO of American Council on Renewable Energy, a trade group.

“It is clear that we need a regulatory framework for reducing carbon emissions” to achieve our climate targets, he added.

Regan claimed that if EPA's rule is finalised the impact on consumers would be minimal. Electricity prices would increase 2% in 2030, a quarter percent in 2035, and less than one-tenth percent in 2040.

Power sector emissions have already declined 36% since 2005 as coal has diminished from 50% of generation to less than 20% as of February, surpassed by renewables at 21.5% and natural gas at 39%, according to the Energy Information Administration. t

Congressional Republicans opposed the measure.

“The Clean Power Plan 2.0 announced today is the Biden administration’s most blatant attempt yet to close down power plants and kill American energy jobs,” said Senator Shelley Moore Capito, Republican from West Virginia. West Virginia is the US' second largest producer of coal.

The proposed rule changes will be published in the Federal Register, the nation's journal of record, opening a 60-day comment period.