This post was written by Rose Standifer and Jennifer Smokelin.
Mandatory reporting of greenhouse gases (GHG) is now required nationwide. On Tuesday, September 22, 2009, the U.S. Environmental Project Agency (EPA) issued its Final Mandatory Reporting of Greenhouse Gases Rule. The final rule requires mandatory reporting of GHG from most large GHG emissions sources in the United States. The stated purpose of the rule is to collect accurate and timely emissions data to inform future policy decisions. Reporting requirements begin on January 1, 2010. Initial reports, covering emissions during 2010, are due on March 31, 2011.
The EPA estimates that the new program will apply to approximately 10,000 facilities and cover approximately 85% of all GHG emissions in the United States. Similar to the California mandatory GHG reporting program, which began earlier this year, applicability is determined by source category and/or emissions levels. In general, suppliers of fossil fuels and industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to the EPA under the rule. Key source categories excluded from the rule’s scope include electronics manufacturing, food processing, industrial landfills, coal suppliers, and wastewater treatment facilities. The EPA estimates that most small businesses will be excluded as well because their emissions will fall below the 25,000 metric ton threshold. How to report is obviously a big concern and the EPA has developed a general “Applicability Tool” to help emitters evaluate whether they are subject to the rule’s reporting requirements. An earlier posting on our blog also provided advice to facilities on how to establish that they do not have to report. That information can be found here.
In general, reporting is done on a facility level, even where there are multiple sources at one facility. Facility is broadly defined to include any plant, building, structure, source, or stationary equipment that is located on contiguous or adjacent property and under common control. The key exception to the facility-wide reporting requirement is that certain suppliers of fossil fuels as well as vehicle and engine manufacturers will report at the corporate level.
Specific gases to be reported include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE). The final rule sets forth specific methodologies for calculating emissions of these gases. The methodologies must be used, with only one exception. The EPA will allow the use of “best available data” for reporting between January and March 2010. Facilities can request an extension of the exception past March 2010 but the EPA has expressed that no extensions beyond December 2010 will be granted.
Unlike the California program, the final rule does not mandate third-party verification of the reported data. In California, third-party verification is required beginning in 2010. Under the nationwide program, however, reporters can self-certify their data, which will then be verified by the EPA.
EPA estimates that, for the first year of reporting, the annualized costs of reporting for the private sector will be approximately $115 million and that, for subsequent years, those costs will be reduced to $72 million.
The EPA is currently providing information about the new rule. For additional information, including specific applicability and reporting questions, please contact the Reed Smith lawyer with whom you regularly work.
