The emissions tally marked a 9% rise from the same period last year and was the first reading above 300 million tons in six years for the opening two months of the year.
The rise in emissions exceeded the 6% rise in total electricity output over the same period, and was driven by a jump in coal-fired power use alongside output cuts to plants fuelled by natural gas, which has rallied in price this year.
Higher coal use and lower gas generation indicates that power producers would rather raise emissions than incur a financial hit from higher gas costs, as they are under pressure to lift output, maintain profits and keep energy costs in check.
Power pollution levels could climb even more steeply this summer if gas prices remain elevated, as the peak period for U.S. power production is during the hottest months of the year when air conditioning demand is highest.
PAN-AMERICAN COAL
The main driver of the emissions rise was a steep climb in the use of coal-fired power production to the highest since 2022.
On average, U.S. coal-fired power generation during January 1 to March 22 was 21% higher than on the same dates in 2024, LSEG data shows.
Coal-fired production in the Southwest Power Pool, which spans from North Dakota down to Arkansas, rose 32% on the year, while coal production in the PJM system – covering Pennsylvania, New Jersey and Maryland – climbed by 27%, LSEG data shows.
The Electric Reliability Council of Texas (ERCOT) lifted coal-fired output by 23% from a year ago, while the power producers across North and South Carolina lifted coal-fired production by 21%.
The Midcontinent Independent System Operator (MISO), the Northwest Power Pool and the Tennessee Valley Authority all also boosted coal production by double digits from the year before.
GAS PRICE PRESSURE
A climb in U.S. benchmark natural gas prices to two-year highs so far in 2025 has helped spur the higher coal use seen across the country.
So far in 2025, Henry Hub natural gas futures have averaged around $3.86 per million British thermal units (MMBtu), which is 82% more than during the same period in 2024, according to LSEG.
In contrast, U.S. coal prices for the first quarter of 2025 are up by around 7% from a year ago to $76 per ton.
To avoid the margin hit from buying and burning such expensive gas, power producers with the ability to use both coal and gas within their networks have opted to trim gas-fired generation and raise coal-fired production.
For the U.S. power system as a whole, total gas-fired generation declined by 2% from January 1 through March 22 in 2025 compared to a year ago, while coal-fired output has climbed by over 20%.
Power generators in ERCOT, PJM, MISO and the Northwest Power Pool also cut gas-fired production so far this year compared to the same dates in 2024.
EMISSIONS IMPACT
Emissions from coal and gas-fired power production have followed the trends in generation.
Emissions from coal-fired generation were 137.5 million tons of CO2 for the first two months of 2025, up 21% from a year ago and the highest since 2022, according to Ember.
Gas-fired emissions were 155.7 million tons, down 1% from the same period in 2024.
During the next couple of months, overall power emissions are likely to decline due to reduced demand for power for heating.
However, demand for cooling systems is set to jump sharply from June, which will place fresh pressure on power firms to boost production from whatever sources are available.
And if gas prices remain elevated and coal prices remain relatively cheap by then, a fresh surge in emissions can be expected as power firms opt to deploy the most cost effective means to boost output while they seek to protect profit margins.
The opinions expressed here are those of the author, a market analyst for Reuters.
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