Environmental Protection Agency acting Administrator Andrew Wheeler, a former coal industry lobbyist, is expected to make the announcement Thursday.
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The move is another indication of the Trump administration's determination to buck both global consensus about the need to act on climate change and market trends, as the President courts what he calls the "beautiful, clean coal" industry.
Thursday's rollback comes as the world gathers in Poland for what is being dubbed the most important meeting on climate change since the 2015 Paris Agreement, which President Donald Trump has criticized repeatedly.
The move also comes a week after the US insisted on amending a G20 communique by adding a graph emphasizing that the US "reiterates its decision to withdraw from the Paris Agreement, and affirms its strong commitment to economic growth and energy access and security, utilizing all energy sources and technologies, while protecting the environment."
The Obama administration rule required new coal plants to be equipped with technology that could capture and store carbon, creating such a high limit on emissions that it effectively restricted the construction of new factories. The Trump administration would greenlight new coal plants that use newer and more efficient boilers and related technology, the Times reports, citing officials familiar with the proposal.
The rule change will not have immediate impact as it only applies to new coal plants, which are becoming increasingly uneconomical as they face competition from cheap natural gas and renewable energy sources.
US coal consumption in 2018 is expected to be the lowest since 1979 and fall further still next year, as a near-record number of coal plants closed in 2018, according to a December 4 report by the Energy Information Administration.
Only one, relatively small, new coal-fired generator is expected to come online by the end of 2019, the EIA said.
The EPA did not address CNN's questions about the announcement.
A study released Wednesday by the Global Carbon Project, an initiative at Stanford University, shows that while coal consumption in Canada and the US has dropped by 40 percent since 2005, increasing coal use in China and India is expected to drive global emissions to an all-time high this year.