Greenhouse Gas Emissions – Ready to Report?


by Steve Case

Case, Steven
scase@mcgrathnorth.com
(402) 341-3070

Background.

  • On March 10, 2009, the U.S. Environmental Protection Agency (EPA) issued a proposed rule for mandatory greenhouse gas (GHG) emissions reporting.
  • This is a reporting rule; it is not intended to control GHGs.  The purpose of the rule is to collect accurate and comprehensive emission data, from large United States GHG emission sources, for use in future policy decisions.

Who is Required to Report?

  • Approximately 13,000 facilities, which constitute 85-90% of total United States GHG emissions, would be required to report.
  • In general, the proposed rule would require suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons  carbon dioxide equivalent (mtCO2e) or more of GHG emissions per year to report to EPA.  For some business categories, such as petroleum refineries and cement production, all facilities in the category would be required to report.  In general, for the other business categories, the 25,000 mtCO2e threshold would apply.  As a general guide, if a facility has a boiler or other combustion equipment with a rated heat capacity of 30 mm BTU/hr, then reporting may be required.
  • Most small businesses would fall below the 25,000 mtCO2e threshold and would not be required to report.  In addition, most agricultural sources would not be required to report.

When is Reporting Required?

  • In general, annual reporting would be required.  The first reports would be submitted to EPA in 2011 and would provide data for calendar year 2010 emissions.
  • Some facilities that currently report more frequently under other programs, such as the Acid Rain Program, would continue those reports as well as an annual GHG emission report under this rule.

What is Required for Reporting?

  • The reporting applies to GHGs.  GHGs covered under the rule are: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HSC), perflorocarbon (PFC), sulpher hexafluoride (SF6), as well as other fluorinated gases (e.g., nitrogen trifluoride and hydrofluorinated ethers.
  • Reporting would be required at the facility level.  There are a few exceptions where there would be reporting at the corporate level.  These exceptions are vehicle and engine manufactures, fossil fuel importers and exporters, and local gas distribution companies.
  • Methodology for reporting would be based upon direct measurement of emissions where facilities are already collecting and reporting (e.g., the Acid Rain Program) and facility- specific calculations for other facilities.  Vehicle/engine manufacturer would use existing certification and test protocols.  Industrial gas suppliers would use direct reporting of gas produced, imported and exported.
  • While the facility self-certifies the emissions data, EPA will be responsible for verifying the data.
  • The emission reports would be submitted electronically, and each reporting facility would be required to maintain records for 5 years.
  • EPA estimates that the expected cost to comply with the reporting requirements to the private sector would be $160 million for the first year and $127 million for subsequent years.

What’s Next?

  • The proposed rule will go through a sixty day public comment period.  In addition, two public hearings will be held on the proposed rule.
  • The proposed rule, when finalized, will provide comprehensive data on GHG emissions.  However, such data will not be available until 2011.  In the interim, Congress continues to consider proposed legislation on GHGs, including cap and trade programs or a carbon tax.  Further, regional initiatives to measure and control GHG emissions – namely, the Midwestern Regional Initiative, the Regional Greenhouse Gas Initiative, and the Western Climate Initiative – and state GHG programs continue to move forward.
  • Stay tuned for more
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