New coal royalty rule set for enforcement starting September 30

The coal industry in the United States has received a significant boost from the executive orders and policies implemented by the Donald Trump administration. The Department of the Interior has a responsibility to provide taxpayers with a method to benefit from the vast amounts of coal being produced in the US. The Bureau of Land Management provides this by placing royalties on coal mined on federal and public lands. That royalty goes into the treasury to provide essential funds for public projects like infrastructure and national security.

President Trump wants the coal sector to “drill baby, drill”

The BLM plays a vital role in the coal sector in the United States by ensuring coal producers and leases pay a substantial royalty on coal mined on federal lands. That royalty provides operators with the opportunity to add money to the treasury that can benefit the public in a number of ways. President Trump has made his administration’s stance on the coal sector clear.

Before he was elected for the second time, then-candidate Trump stated that he wanted to “drill baby, drill”. At the time, most people simply scratched their heads in confusion; however, since coming into office, Trump has signed several executive orders that aim to increase the US proclivity for coal by expanding coal operations and removing most regulatory barriers that the industry faces.

The Bureau of Land Management implements a new coal royalty rate

Aligning with the current administration’s stance on the coal sector is clearly a priority for the federal government’s regulatory and management institutions. The Department of the Interior has now stated that it will be implementing a new coal royalty rate for any leases or sites producing the black gold. The “One Big Beautiful Bill” calls for a new coal royalty rate to be implemented for all above-ground and underground coal mines.

The Direct Final Rule from the Bureau of Land Management sets the royalty rate for coal removed from surface mines at not less than 12 1/2 percent of the value of the coal removed from a surface mine, and that such a royalty shall ” be not more than 7 percent during the period beginning on July 4, 2025, and ending on September 30, 2034.”

It also states that underground mines shall pay an 8 percent royalty rate on any coal produced from the site. Both these royalty rates are a direct result of the “One Big Beautiful Bill” that the President signed into law. The OBBB sets in motion a series of events that aim to revitalize the flailing American energy sector by providing a path towards energy independence for the United States.

Not everyone agrees that the federal government is making the right move

The Taxpayers for Common Sense (TCS), an institution that is a non-partisan budget watchdog, has lamented the move by the Trump-led BLM. While the royalty rate is supposed to prop up the industry, it is impossible to please everyone all the time. Despite that, the BLM has recently approved the sale of several coal leases all around the United States. The TCS released its statement, which addresses the royalty rate implemented by the BLM.

The Department of the Interior bears a fiduciary responsibility to ensure that taxpayers receive a fair return on the extraction and sale of federal coal. The One Big Beautiful Bill Act (OBBBA, P.L. 119-21), and the DFR that implements it, fail to ensure taxpayers a fair return by lowering the royalty rate to not more than 7% for both new and existing leases from July 4, 2025, to September 30, 2034.

President Donald Trump is steering America towards energy independence

The current administration is doing everything in its considerable power to lead America away from the reliance on energy produced outside the United States, and has implemented significant measures that alter the outlook for the coal sector in the US. His “One Big Beautiful Bill” removes a vast majority of the regulatory barriers put in place by the previous administration. The result has been a significant shift in the energy production capabilities of the US. Coal is the way to keep the lights on, and the President knows this.