Environmental regulations are the most significant challenge for the U.S. coal industry.

The U.S. coal industry faces its most significant challenge from strict environmental regulations aimed at reducing carbon emissions and pollution. Regulations targeting emissions from coal-fired power plants, such as the Clean Air Act and the Mercury and Air Toxics Standards, have increased the cost of operating coal facilities and led to the closure of many older plants. Additionally, coal mining faces scrutiny for its environmental impact, including land degradation and water pollution. Combined with the rise of cleaner and more cost-effective alternatives like natural gas and renewable energy, environmental regulations have played a major role in the coal industry's decline.