What changed with U.S. coal rules this week?

Reports indicate the administration will ease hazardous pollutant limits on coal plants to keep more baseload capacity available. The change affects mercury and related standards and could lower compliance costs while extending unit life. However, legal challenges are likely, so timelines and details could shift. Investors should track court filings and state-level responses closely.

How does this affect AI power demand and data centers?

Data centers need reliable power at stable prices. Softer rules could keep more coal units running, adding near-term supply. That may reduce local price spikes but raises ESG and legal risks. Over time, cleaner firm power, storage, and transmission upgrades will be needed. Project developers should plan for multiple power sources and potential rule reversals.

What risks should utility investors watch now?

Key risks include litigation that reverses standards, higher financing costs for coal-linked assets, and potential stranded investments after retrofits. Track state commission actions, disclosed compliance costs, and credit outlooks. Consider scenario analysis for dividends and capex. Portfolio tilts toward regulated assets with cleaner fleets may offer better risk-adjusted returns.

How should Japan-based investors position portfolios?

Review exposure to U.S. utilities with coal-heavy fleets and set JPY hedges. Run cash flow stress tests under strict and loose rules. Consider shifting toward regulated utilities with cleaner assets, grid equipment makers, and storage firms. Monitor forward power prices, capacity auctions, and court rulings, as these signals will drive spreads, equity multiples, and dividend safety.

Global Market Insights

February 21: EPA Loosens Coal Plant Mercury Rules for AI Power Needs

ByHuzaifa Zahoor February 21, 2026February 21, 2026

The EPA coal mercury rule is being loosened to keep more U.S. coal plants online as AI power demand surges. For Japan-based investors, this shift in US coal regulation changes risk and return profiles across utilities, credit, and commodities. We break down what changed, why it matters, and how to position. We also map the utilities sector outlook with clear actions for portfolios in JPY terms, keeping an eye on legal risk and ESG flows.