On September 22, 2009, the U.S. Environmental Protection Agency (EPA) issued final rules requiring mandatory reporting of greenhouse gas (GHG) emissions from large GHG sources. The EPA estimates that approximately 10,000 facilities will fall within the scope of this rule. The purpose is to collect data on GHG emissions to develop future regulation of carbon emissions, such as a carbon tax or a market based cap-and-trade program.

The following GHG sources are required to begin collecting GHG emissions data beginning January 1, 2010, and submitting annual reports to EPA beginning March 31, 2011:

  • Facilities that directly emit 25,000 metric tons of carbon dioxide equivalent (mtCO2e) or more of GHG emissions per year. Once a facility is required to report under the rule, it must continue to report until its emissions fall below 25,000 mtCO2e for five consecutive years, or below 15,000 mtCO2e for three consecutive years.
  • Facilities in certain industries, such as aluminum, cement and petrochemical producers, regardless of the volume of GHGs emitted.
  • Suppliers of specified industrial gases and fossil fuels.

The rules include other industry-specific requirements. For example, manufacturers and importers of vehicles and engines not considered to be "light duty" are required to begin reporting CO2 data beginning with 2011 vehicle models, and reporting of other GHG emissions will be required beginning with later model vehicles.

Although individual home and car owners and most commercial and residential buildings are not intended to fall within the scope of these rules, many business sectors will be directly affected. Affected entities will include those in energy, manufacturing, refining, agriculture, mineral production, disposal, wastewater treatment, ethanol production and food processing.

Importantly, these rules do not preempt states from requiring their own GHG emission reporting requirements. As a result, some entities may experience repetitive or inconsistent reporting requirements. In fact, during the last legislative session, the Minnesota Legislature also enacted a GHG emission reporting law. The law mandates GHG reporting for facilities required to obtain a permit under the federal Clean Air Act and facilities whose GHG emissions exceed a threshold set by the Minnesota Pollution Control Agency (MPCA) at between 10,000 to 25,000 mtCO2e per year. Therefore, the forthcoming Minnesota rules could potentially encompass more facilities than do the federal rules. Furthermore, the MPCA is authorized and encouraged to require reporting of GHG emissions from transportation fuels and natural gas combustion.

Additionally, the Minnesota Legislature has recently amended the high global warming potential (GWP) greenhouse gas reporting law. This law requires facilities that purchase 10,000 mtCO2e or more of GWP gases per year to report the amount purchased and its intended use. The amendment has broadened the definition of GWP gas to include: hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, nitrous trifluoride and any other gas the MPCA determines to have a high global warming potential. Significantly, the amended law allows reports filed with a federal agency to be used for state reporting, provided that they are verified by a third party. The EPA rule calls for self-verification of filed reports; therefore, it would be necessary to have the federal report verified by a third party before submitting it to the MPCA.