Massachusetts is now joining other states in taking tangible steps to establish a regulatory limitation on the output of carbon and other greenhouse gas (GHG) emissions. The regulations cover manufacturers, utilities and other industries and institutions whose operations involve releases of GHGs to the atmosphere.

On December 29, 2008, a short-form emergency regulation was promulgated by the Massachusetts Department of Environmental Protection (MassDEP) to require that certain sources report their carbon dioxide output with a regional climate change registry by April 15, 2009. In 2010 and years following, annual requirements for reporting of GHG emissions will continue and expand in phases to include reporting of other greenhouse gases whose emissions surpass certain thresholds in Carbon Dioxide Equivalents (CO2e).

These regulations reflect one of the major provisions of the Massachusetts Climate Protection and Green Economy Act, which was signed into law by Governor Patrick in August 2008 as part of the Global Warming Solutions Act (GWSA). These emergency regulations are the first steps towards creating enforceable state limits on GHG emissions in the Commonwealth. The GWSA calls for statewide mandatory GHG reductions of 10-25% by 2020, and 80% by 2050, with interim upward adjustments toward 80% in the intervening years.

Initially, in 2009, the emergency regulations focus on “registration” requirements applicable to any public or private facility with emissions in calendar year 2008 of carbon dioxide (CO2) greater than 5,000 short tons (2,000 lbs/ton or 0.9 metric tons) in CO2e that arose from combustion of fossil fuels. In addition, a facility that otherwise is subject to regulations calling for an air operating permit under Title V of the federal Clean Air Act (a so-called “Title V Facility”) is also covered by the registration requirement regardless of the level of fossil fuel emissions in 2008. Facilities required to register (“covered facilities”) in this initial round must report only “direct stack emissions” (i.e., output through stacks, manufacturing processes or vents) of CO2 that arise from fossil fuel combustion.

For emissions in calendar year 2009, the reporting requirements (codified at 310 CMR 7.71), although somewhat tortured, effectively continue to require that, in April, 2010, covered facilities report their output of CO2 only from fuel combustion.

For emissions in subsequent years (2010 and beyond), reporting requirements expand and become applicable to all GHG output from a facility as long as the GHGs are designated as such by MassDEP. Those currently designated, in addition to CO2, include methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6).

Also in these subsequent years, covered facilities above the 5,000 ton threshold must also report emissions from motor vehicles whose primary purpose is “to support the operations of the facility,” or are from vehicles “otherwise assigned” to the facility. And, any Title V Facility must include in its report (including that it “certify and verify”) stationary (non-motor vehicle) GHG emissions, even if less than the 5,000 ton threshold noted above. This requirement reflects the intent of the Commonwealth to move towards a reasonably comprehensive inventory of GHG emissions within the state. It surely presages potential adoption of limits below the 5,000 ton level as evidence continues to mount that GHG impacts are taking a material toll on climate warming and eco-system sustainability.

Our clients and friends should take caution in evaluating whether or not their Massachusetts facilities are covered by this new reporting program. The types of facilities that MassDEP indicates will fall within this regulatory framework include those with electric generating units, emergency generators, industrial, commercial, and institutional (e.g., hospital) boilers, and wastewater treatment plants, as well as municipal waste combustors, landfills, and facilities having combined heat and power systems, and facilities that burn biomass. Additionally, MassDEP has stated that any facility combusting fuel equivalents of 83,100,000 cubic feet of natural gas or 442,000 gallons of No. 2 fuel oil per year would be subject to the regulations. The 5,000 ton per year limit is also characterized as equivalent to the operation of a 30% efficient natural gas-fired 1.0 MW electric generator run at 85% capacity.

An obvious concern for those manufacturers whose facilities may not explicitly be covered as a result of the specific activities described above (e.g., they are not a Title V facility holding a permit issued under the federal Clean Air Act), will be that they remain potentially subject to the reporting requirements depending on whether the covered GHGs are present in their facilities and if so, at what output level. Moreover, the emergency rulemaking compels attention not only to which facilities are covered by the program, but also to what each should be reporting in terms of direct or indirect GHG output.

As an emergency regulation, the current rule was adopted without public comment in order to meet deadlines under the GWSA. MassDEP has also announced that it will hold a public hearing regarding these regulations on Wednesday, February 11, 2009 at 1:30 PM at MassDEP’s offices at One Winter Street in Boston. EAPD expects that as a result of this public process, MassDEP will both expand and clarify the provisions of these regulations as well as contend in some respects with initiatives emerging within the Obama Administration that will necessarily alter the arena within which climate change laws and policies are being developed.

Once again, our Firm’s lawyers who have extensive experience in the Clean Air Act and other federal and state programs that form the foundation of our practice in Sustainable Environmental Law welcome any questions or comments from our friends and clients. Ultimately, the regulatory strategy underlying the MassDEP regulations will prove more commonplace at various levels of government within and without Massachusetts. At EAPD, our expectation is that these regulations can be implemented in a way that helps level the playing field for companies and institutions that seek to perform environmentally sustainable operations. As public policy evolves such that “green” practices shift from the marketing arena to tangible compliance actions, the regulated community will increasingly be called on to devote scare budgetary resources to this task. EAPD also is working with those engaging in investment and trading of creditable GHG reductions under various regional, national and international regulatory regimes.