EPA’s Mandatory Reporting Rule Adds New Disclosures of Corporate Ownership and Cogeneration

A recent amendment to the EPA’s Mandatory Reporting of Greenhouse Gases Rule (40 CFR part 98) requires companies that report their emissions to also provide information on corporate ownership, North American Industry Classification System (NAICS) codes, and whether any of the emissions come from a cogeneration unit. The goal behind collecting this information is to gain a better understanding of the aggregate greenhouse gas (GHG) emissions from corporations and specific industry sectors, and identify potential differences in emissions between otherwise similar facilities due to cogeneration. Such information can be used to guide future GHG regulations and mitigation strategies. The rule was signed by Administrator Jackson last week and is to be published the Federal Register shortly.

The final rule requires facilities and suppliers reporting GHG emissions (large industrial facilities that emit 25,000 metric tons or more per year, plus suppliers of fossil fuels and industrial gases, and a few others) to include, in their first annual GHG emission report due on March 31, 2011, the name and address of each US parent company and a breakdown of the percentage share that each parent owns. It also requires the facilities to report any NAICS codes that apply to the facility – both the primary code as well as any others that are appropriate.

The third requirement takes the form of a checkbox indicating whether the report includes emissions from a cogeneration unit, defined by EPA as “a unit that produces electrical energy and useful thermal energy for industrial, commercial, or heating or cooling purposes, through the sequential or simultaneous use of the original fuel energy.” In the final rule, EPA notes that there are no current programs that require facilities to identify whether they have cogeneration units – EPA’s Combined Heat and Power Partnership is only a voluntary program, and while the Energy Information Administration collects information on cogeneration from power generators greater than 1 megawatt, this program likely does not cover all of the facilities and suppliers subject to 40 CFR part 98.

The information collected on cogeneration through this rule is just a start, and useful primarily to merely identify the facilities using cogeneration. As EPA correctly notes, the information likely will not be sufficient to determine the quantity of GHG emissions occurring from particular NAICS sectors or cogeneration units within an individual reporting facility, or the degree to which cogeneration emissions at the applicable facilities displace onsite use of fossil fuel or other emissions from centralized electric generation. Nonetheless, information on the types and characteristics of facilities that use cogeneration could be important to the future development of GHG mitigation strategies.

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