The Environmental Protection Agency (EPA) today proposed regulations which create the first nationwide system for reporting emissions of CO2 and other greenhouse gases emitted by major sources in the US. The proposed regulations are promulgated pursuant to the FY2008 Consolidated Appropriations Act which was signed into law in December 2007, and instructs the EPA to require mandatory reporting of greenhouse gas emissions in all sectors of the economy. Approximately 13,000 facilities will be subject to the rule, accounting for 85% to 90% of greenhouse gases emitted in the U.S. Despite this large number, EPA believes that most small businesses will not be subject to the rule, as the primary threshold is set at 25,000 metric tons of CO2 equivalent, an amount equal to the emissions from 2,200 homes, 58,000 barrels of oil, or 131 rail cars of coal.
In addition to facilities that directly emit 25,000 metric tons of CO2 equivalent per year, the proposed rule also requires suppliers of fossil fuels and industrial greenhouse gases, as well as manufacturers of vehicles and engines, to submit annual reports to EPA, cataloging all 6 greenhouse gases. The rule does not require control or caps on emissions, but only that the sources monitor and report greenhouse gas emissions. EPA will use the data gathered from this reporting process to formulate and assess the impacts of future policies.
Interestingly, the rule requires reporting of emissions from both upstream production facilities and downstream emission sources, which could result in some double-reporting of emissions – for instance reporting of emissions by both an upstream supplier of fuel oil and the large end-user facility who burns the oil. In guidance that accompanies the proposed regulation, EPA clarifies that such double reporting is consistent with the appropriations language, and will provide information to EPA to craft policies that address both sides, such as cap and trade upstream and end-use emissions standards downstream.
If adopted, the proposed rule would require reporters to submit their first annual greenhouse gas emissions report by March 31, 2011, based on emissions data from 2010. Facilities who already report emissions data quarterly (such as for the Acid Rain Program) would continue to report quarterly. Requirements for vehicle and engine manufacturers would kick in with the 2011 model year.
For the majority of reporters, EPA will collect data at the facility level. Vehicle and engine manufacturers, fossil fuel importers/exporters and local gas distribution companies will report at the corporate level. Verification of reported data will be verified by EPA, as in other Clean Air Act programs.
For more information on which facilities are subject to the rule and what emissions they will have to report, we recommend this chart, from EPA guidance.