United States: US EPA Proposes Mandatory GHG Reporting

Originally published March 11, 2009

Keywords: EPA, mandatory reporting, greenhouse gas emissions, GHG, United States, Consolidated Appropriations Act, Clean Air Act, Kyoto Protocol, fossil fuel, industrial GHGs, coal-fired boiler

On March 10, 2009, the US Environmental Protection Agency (EPA) released its 1410 page proposal to require mandatory reporting of greenhouse gas (GHG) emissions in the United States.¹ The proposed rule was issued pursuant to the FY 2008 Consolidated Appropriations Act (signed in December 2007) and EPA's authority under the Clean Air Act.

As drafted, the proposal would cover anthropogenic emissions of the six GHGs subject to the Kyoto Protocol—carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)—plus other fluorinated gases such as nitrogen trifluoride and hydrofluorinated ethers. As is usual, the GHG quantities are described in terms of metric tons of carbon dioxide equivalent (mtCO₂e), which compares their effects on global warming to CO₂.

The proposed rule would apply to suppliers of fossil fuel and industrial GHGs, manufacturers of motor vehicles and engines, and facilities that emit GHGs. Consequently, it would require reporting of emissions both from upstream producers and from downstream emitters. Generally speaking, the proposed threshold for facilities would be 25,000 mtCO₂e per year; however, facilities which have certain source categories within their boundaries (such as petroleum refineries, cement production, and primary aluminum production) automatically would be required to report because EPA has concluded that they will emit at the threshold level. Where direct measurement data currently are collected (e.g., electric utilities), they will be utilized in the reports. Otherwise, facility-specific calculation methodologies are defined for covered sources.

By way of example, based on source categories, a petrochemical plant that emits 22,000 mtCO₂e would be required to report, but a steel mill (which may include an integrated plant or an EAF shop) emitting the same amount would not. An assembly plant emitting 30,000 mtCO₂e from a coal-fired boiler also would be required to report, not because it falls within any specific industrial category, but because its emissions from stationary fuel combustion exceed the 25,000 mtCO₂e threshold. A university that emits 24,000 mtCO₂e from cogeneration and 2000 mtCO₂e from coal storage, on the other hand, would not be covered; the proposal does not prescribe a method for calculating the coal storage emissions so they would not be included. For municipal solid waste landfills, moreover, the threshold would be based on gas generation. Thus, a landfill that generates an amount of methane equal to 40,000 mtCO₂e, but which collects and combusts 75 percent, such that its total emissions are only 10,000 mtCO₂e, still would be required to report.

In the interest of simplicity, EPA also is proposing capacity-based thresholds for several sectors, including electronics manufacturing facilities and electric power system facilities. Similarly, EPA would exclude from reporting any facility that (i) has an aggregate maximum rated heat input capacity of stationary fuel combustion units (such as boilers, combustion turbines, engines, incinerators, and process heaters) of less than 30 mmBtu/hr and (ii) contains no other emission sources within its boundaries.

EPA expects its thresholds to exclude most buildings and other small emitters. And although the proposed rule would cover large manure management systems, it would exclude most agricultural emissions (such as methane emissions from the digestive systems of cattle).

Data primarily would be reported at the facility level. A petroleum refinery therefore would report its direct emissions and the CO₂ emissions from oxidation of the fuel it puts in commerce. Reporting would be at the corporate level for vehicle and engine manufacturers (including passenger vehicles, heavy trucks, locomotive engines, marine engines, aircraft engines, and non-road engines) who would supply GHG emissions rate information, fossil fuel importers and exporters, and local gas distribution companies.

The reports would be submitted to EPA; depending on the source, they would contain a variety of facility, unit, process, and production data. A designated representative would certify under penalty of law that the report was prepared in accordance with the rule. As is typically the case, emissions data would not be considered confidential business information. Supporting records would need to be retained for five years. EPA, as opposed to a third party, would conduct QA/QC.

For most covered entities reporting would be required annually, with the first reports being submitted in 2011 for 2010 emissions. Facilities and suppliers that currently report more frequently under existing rules (such as the Acid Rain and Fuels Programs) would continue their current practices and submit an annual report. Reporting for vehicle and engine manufacturers would start with the 2011 model year.

Neither sinks nor reductions nor offsets would be included in the reports, only emissions. Further, the proposal does not seek to impose any GHG emission controls.

EPA is planning two public hearings on its proposal: April 6-7, 2009, in suburban Washington, DC, and April 16, 2009, in Sacramento, California. The public will be able to submit written comments for 60 days following publication of the proposed rule in the Federal Register.

Apart from electric utilities, this will be the first mandatory national system for reporting GHG emissions in the United States. EPA estimates that implementation will cost $160 million in the first year, but considers the rule a "critical step" that will generate "comprehensive and accurate" information to guide the efforts to "confront climate change."

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Footnote

1. Due to the length of the proposal, the preamble appears at http://www.epa.gov/climatechange/emissions/downloads/MRRPreamble.pdf and the proposed text of the rule at http://www.epa.gov/climatechange/emissions/downloads/MRR-Rule.pdf.

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