On October 30, 2009, U.S. EPA published its final rule regarding the mandatory reporting of greenhouse gas emissions. Facilities covered under this reporting rule will be required to begin collecting emissions data on January 1, 2010. For emissions occurring during 2010, the first emissions report is due on March 31, 2011. Below is a summary of the new reporting rule, including information about how to determine which facilities will be required to report and the type of information the new rule requires to be reported.

Applicability

The final reporting rule requires reporting of annual emissions of the following greenhouse gases ("GHGs"):

  • carbon dioxide ("CO2");
  • methane ("CH4");
  • nitrous oxide ("N2O");
  • sulfur hexafluoride ("SF6");
  • hydrofluorocarbons ("HFCs");
  • perfluorocarbons ("PFCs");
  • and other fluorinated gases (e.g., nitrogen trifluoride ("NF3") and hydrofluorinated ethers ("HFEs")).

Emissions are required to be reported in terms of carbon dioxide equivalents ("CO2e"), meaning the number of metric tons of carbon dioxide emissions that would have the same global warming potential as one metric ton of the emitted gas.

The new rule requires reporting at the facility level, with the exception that some suppliers of fossil fuels and industrial greenhouse gases, along with vehicle and engine manufacturers, will be required to report at the corporate level. Under the new rule, a facility is defined as:

"Physical property, plant, building, structure, source, or stationary equipment located on one or more contiguous or adjacent properties in actual physical contact or separated solely by public roadway or other public right of way under common ownership or common control that emit or may emit GHGs."

The determination whether a "facility" is subject to reporting under this new rule depends upon the source category under which the facility falls. Facilities with production processes in certain source categories are automatically subject to this new rule, regardless of the quantity of GHGs they emit. These categories are listed in full by the rule, but include processes such as aluminum production, cement production, petrochemical production, petroleum refineries, phosphoric acid production and lime manufacturing.

However, facilities with production processes in certain source categories are subject to the new rule only if the facility's emissions are more than or equal to 25,000 metric tons of CO2e per year from all sources at the facility. These source categories include processes such as glass production, lead production, iron and steel production, and pulp/paper manufacturing.

Facilities not covered by categories described above must report if they emit 25,000 metric tons of CO2e per year from one or more stationary fuel combustion sources with an aggregate maximum rated heat input capacity of 30 million British thermal units per hour or more.

Notably, U.S. EPA has stated that the 25,000 metric ton CO2e threshold will cover many of the types of facilities and suppliers typically regulated under the Clean Air Act. U.S. EPA has also estimated that approximately 10,000 facilities and 85 percent of total GHG emissions will be covered by the reporting rule.

It should be noted that the new rule also covers suppliers and/or producers of certain products. For example, some producers of natural gas products, petroleum products, coal-based liquids, carbon dioxide and industrial GHGs are required to report. Additionally, importers and exporters of certain products in quantities equivalent to 25,000 metric tons or more of CO2e per year may also be required to report under the new rule.

Monitoring Methods and Requests for Extension

From January 1 through March 31, 2010, a facility may use best available monitoring methods for any parameter that cannot reasonably be measured according to the monitoring and QA/QC requirements of the rule. Please note that the facility must use the calculation methodologies and equations provided by the new rule, but may use the best available monitoring method for any parameter for which it is not reasonably feasible to acquire, install, and operate a required piece of monitoring equipment by January 1, 2010. However, starting no later than April 1, 2010, all facilities must discontinue using best available methods and begin following all applicable monitoring and QA/QC requirements provided by the rule.

A facility may make a request to U.S. EPA to use one or more best available monitoring methods beyond March 31, 2010. This request must be submitted to U.S. EPA no later than 30 days after December 29, 2009, the effective date of the new reporting rule. U.S. EPA will not grant an extension for the use of best available methods beyond December 31, 2010. Generally, extension requests must contain information identifying the reason for the request and support documentation. For example, if the reason for the extension is that the equipment cannot be purchased and delivered by April 1, 2010, the requester must include supporting documentation of the date the equipment was ordered, evidence of the investigation of alternative suppliers and the dates by the alternative vendors promised delivery, backorder notices or unexpected delays, descriptions of actions taken to expedite delivery, and the current expected date of delivery.

Record Keeping Requirements

A facility required to report GHGs under this new rule must retain all required records for at least three years. The records shall be kept in an electronic or hard-copy format (as appropriate) and recorded in a form that is suitable for expeditious inspection and review. Upon request by the Administrator of U.S. EPA, the records must be made available for inspection. The record keeping requirements include, but are not limited to:

  1. a list of all units, operations, processes, and activities for which GHG emissions were calculated;
  2. the data used to calculate the GHG emissions for each unit, operation, process, and activity, categorized by fuel or material type;
  3. the annual GHG reports;
  4. information describing missing data events; and
  5. a written GHG monitoring plan.

A facility may exit the emissions reporting program and discontinue reporting when one of the following circumstances have occurred: 1) the facility has operated for five consecutive years with emissions below 25,000 metric tons CO2e per year; 2) the facility has operated for three consecutive years with emissions below 15,000 metric tons CO2e per year; or 3) the GHG-emitting processes or operations at the facility are shut down. In each instance, the facility is required to notify U.S. EPA that it intends to cease reporting.

Importantly, facilities or suppliers that fail to monitor or report GHG emissions, quantities supplied, or other data elements according to the requirements of this new rule could potentially be subject to enforcement action by U.S. EPA under Clean Air Act Sections 113, 203, 204 and 205.

In order to prepare for this new reporting rule, it is recommended that companies immediately compare facility data against the rule's applicability specifications in order to determine if monitoring and reporting will be required. In that regard, U.S. EPA offers an online tool to help companies assess whether the new rule is applicable to a specific facility. To access this tool, please see www.epa.gov/climatechange/emissions/GHG-calculator/index.html.