Court strikes down EPA rule on coal pollution

Says agency exceeded its mandate.

A U.S. appeals court on Tuesday overturned a key Obama administration rule to reduce harmful emissions from coal-burning power plants, sparking a rally in coal company shares and relief among utility firms.

The U.S. Court of Appeals for the D.C. Circuit said in a 2-1 decision that the Environmental Protection Agency had exceeded its mandate with the rule, which was to limit sulfur dioxide and nitrogen oxide emissions from power plants in 28 mostly Eastern states and Texas.

In the latest setback for the EPA, the court sent the Cross-State Air Pollution Rule back for revision, telling the agency to administer its existing Clean Air Interstate Rule—the Bush-era regulation that it was updating—in the interim. The EPA said it was reviewing the ruling.