Even as the stock market touches new all-time highs, signs are emerging that the Trump administration will soon move to overturn several environmental regulations. Most of them, such as the Clean Power Plan, are a legacy of the Trump era. Eliminating such restrictions would be in keeping with the President elect’s promises to revive the coal industry.

With coal prices surging immediately after the election, the optimism in the sector is more than palpable. Given the President’s recent orders on the oil and gas sector, similar decisions on coal and conventional power should be expected soon. Investing in stocks poised to gain from these decisions may be a smart option at this point.

Repealing the Clean Power Plan

On the campaign trail, Trump promised to reverse Obama’s clean energy proposals. The President incumbent had also promised to roll back the investment tax credit for solar power and the Environmental Protection Agency’s Clean Power Plan.

The Clean Power Plan is the Obama administration’s key environmental reform and mandates states to slash their carbon dioxide emissions. However, its actual implementation remains incomplete due to the legal obstacles put in its path by Republican dominated states.

Experts believe that Trump will ask the EPA to request courts to return it the agency for a review. In one stroke, this will end any attempts to defend the plan legally. In Dec 2016, Dynegy Inc.’s (DYN – Free Report) CEO Robert Flexon had said that the removal of subsidies for alternative energy sources would provide a level playing field for conventional power producers.

Coal fired plants would stand to gain the most, though this may not result in fresh capacity additions. Instead, existing coal fired plants would then be in a position to snatch market share away from nuclear and natural gas based power producers.

Coal Prices Surge, Mining to Benefit

As a result, Flexon added, such a stance on power would be especially beneficial for the coal mining sector as well. The capacity factor for coal would rise and miners would have to step up production to meet the increased demand from power plants. In fact, compared to the elimination of the Clean Power Plan, it would be easier for Trump to remove the Obama administration’s ban on coal mining. In Jan 2016, the previous government had placed a temporary ban on fresh federal coal leases in order to ensure that lease deals accounted for coal’s impact on climate change.