Many in the U.S. coal sector are disappointed following another blow to President Donald Trump's efforts to fulfill a campaign promise to put coal miners back to work.

Industry representatives are reviewing their next steps after a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit on Jan. 19 vacated the U.S. Environmental Protection Agency's Affordable Clean Energy, or ACE, rule. The court remanded the regulation regarding carbon dioxide emissions from existing power plants back to the EPA for reconsideration.

The ACE rule required states to submit plans for improving the efficiency of coal-fired power plants but did not require any specific emissions targets. The ACE rule replaced the Clean Power Plan introduced by the Obama administration, a rule the U.S. Supreme Court stayed in early 2016.

America's Power President and CEO Michelle Bloodworth told S&P Global Market Intelligence that in the wake of the ruling, the organization would continue to work to "explain to policymakers why the nation needs coal-fueled electricity."

"We had intervened in the case to help defend the rule because we feel that the ACE rule follows the plain language of the Clean Air Act, and the rule takes a sensible approach to regulating carbon dioxide emissions from the nation's coal fleet, whose emissions have declined significantly even without carbon regulations," Bloodworth said.

The court decision vacating the ACE rule may help President-elect Joe Biden roll out more stringent regulations that further pressure the sector as his administration aims to decarbonize the power sector by 2035.

"It's disappointing and troubling," Wyoming Mining Association Executive Director Travis Deti told S&P Global Market Intelligence. "Unfortunately, per his campaign promises, I believe we can expect any new rule coming out of the Biden administration to be geared toward snuffing coal-fired generation from America's energy mix."

Phil Smith, a spokesperson for the United Mine Workers of American International Union said the court's decision gives the Biden administration a smoother path to pass its own regulation that might be harmful to the coal industry.

"It is our sincere hope that if they do issue such a regulation, they will depart from the Obama administration's approach to this issue, which was to ignore the impact on coal miners, their families and their communities," Smith said. "Solving the challenge of climate change must not be done on the backs of Appalachian coal miners and their children."

The U.S. coal sector has contracted significantly in recent years, despite the Trump administration's efforts to boost the industry. Many in the sector are expecting that things may get tougher for coal under Biden's presidency.

A November 2020 analysis of available data showed coal jobs were down 23.6% from the first quarter of 2017 when Trump took office. Coal production was down 31.5% over the same period. A late 2020 survey of some of the largest coal burners in the country confirmed many of the fuel's largest traditional buyers have no plans to replace aging coal fleets across the country.

Joanne Spalding, chief climate counsel at the Sierra Club, called the court's decision an "apt bookend" to the administration on Trump's final full day in office.

"We now look forward to the Biden administration keeping its promise and acting aggressively to restore the EPA to its institutional mandate and put its resources and expertise toward solving problems, not creating more of them," Spalding said in a news release from the organization.

Megan Houdeshel, a partner at international law firm Dorsey & Whitney LLP who advises clients on environmental and regulatory matters, said in an emailed statement that the reversal of the ACE rule is just the first of many points of uncertainty the industry should expect to face when it comes to Trump-era regulations.

"Whether it be courts overturning regulations or the incoming Biden administration reversing course on executive orders and policy, companies should be ready for changes in environmental regulations applicable to their business and operation," Houdeshel said.

National Mining Association spokesperson Conor Bernstein said the trade group disagreed with the ruling, and West Virginia Coal Association President Chris Hamilton expressed disappointment in the court's decision. Both organizations said they were exploring future options following the ruling.

"The state of West Virginia has put an enormous amount of work and resources into a state compliance plan to move this program forward in order for the state to demonstrate greater carbon dioxide reductions while embracing clean coal technologies," Hamilton said.