While Congress continues to consider climate change legislation to reduce greenhouse gas emissions (GHGs), the EPA is moving forward to finalize rules to regulate GHGs emissions. On September 22, 2009, EPA Administrator Lisa Jackson signed the final rule requiring large emitters of GHGs to begin counting their emissions on January 1, 2010. Though the Final Rule will not be effective until 60 days after publication in the Federal Register, it is expected to go into full effect this year.

First reports from covered facilities are due for 2010 emissions on March 31, 2011. With reporting beginning in a little over three months, this new regulation will affect roughly 10,000 facilities and cover approximately 85 percent of the GHGs emitted in the United States. The Final Rule and information about its implementation can be accessed at http://www.epa.gov/climatechange/emissions/ghgrulemaking.html.

Summary of the Final Rule:

  • Facilities that annually emit 25,000 metric tons or more of carbon dioxide per year, as well as certain “must-report” industries, will report 2010 emissions by March 31, 2011.
  • Reporting is at the facility level except that certain suppliers of fossil fuels and industrial greenhouse gasses, as well as vehicle and engine manufacturers, will report at the corporate level.
  • Will affect roughly 10,000 facilities estimated to comprise 85 percent of the U.S. GHG emissions.
  • The EPA will verify the data with third party verification not required, however, reports must be certified by the reporting officer.
  • The only agricultural emitters affected are large livestock operations; the EPA has created a formula to help livestock operations determine if they have to report. The EPA estimates that just over 100 manure management systems at large livestock operations will be required to report.
  • The EPA has developed information and training resources, including online applicability tools, a series of educational webinars, guidance documents and information sheets on affected sectors (http://www.epa.gov/climatechange/emissions/ghg_infosheets.html).

Major changes from the rule as initially proposed in March are:

  • Reduced the number of sources that must report. The proposed rule would have covered all emitters in certain industries and those emitting more than 25,000 metric tons per year. The Final Rule does not require the following to report at this time: electronics manufacturing, fluorinated GHG production, oil and natural gas systems, ethanol production, SF6 from electrical equipment, underground coal mines, food processing, wastewater treatment, industrial landfills, suppliers of coal and magnesium production.
  • Entities can stop reporting if they have three years of emissions below 15,000 metric tons, or five years of emissions below 25,000 metric tons, or shut down operations – the proposed rule had a “once a reporter, always a reporter” requirement.
  • Allows use of “best available” monitoring methods for 1st quarter of 2010 instead of the proposed required monitoring methods and can request an extension to use these best available beyond that time but not longer than 2010.
  • Modified some of the proposed requirements for types and locations of monitors, calibration of monitors and in some emitter categories reduced the frequency of sampling.
  • Exempted research and development activities, use of some unconventional fuels, hazardous wastes and emergency equipment from reporting.
  • Requires submittal of revised reports if needed to correct errors and reduced records retention to five years from three years.
  • Added an animal population threshold to reduce burden of determining applicability.

In addition to this recent action, the EPA stands ready to act on a number of additional regulations aimed at establishing the framework for regulating greenhouse gas emissions. Among the actions expected to be pushed forward by the EPA in the coming weeks and months are:

  • “Endangerment Finding” which is expected to determine that GHGs endanger the health and welfare of current and future generations.
  • Draft rules promulgated with the U.S. Department of Transportation that would boost automobile and light-truck efficiency standards for model years 2012 to 2016, and would impose the first-ever federal tailpipe standards for greenhouse gases.
  • A threshold or “tailoring” rule which is expected to limit strict permitting requirements to large sources of carbon dioxide in response to the requirement by the Clean Air Act which requires the regulation of 250 tons of pollutants – a level viewed as appropriate for conventional pollutants, but not carbon dioxide emissions.

Finally, the 2nd U.S. Circuit Court of Appeals in Manhattan ruled that states trying to combat global warming can sue six electric utilities to force them to cut the greenhouse gases emitted by their power plants in 20 states. Carol Browner, Director of the White House Office of Energy and Climate Change Policy, believes this ruling is a clear indication that failure by the Congress to implement clear regulations limiting the release of GHG emissions will result in the issue being determined largely by the court system.

What is clear is that while climate change legislation is stalling in the U.S. Senate, there continues to be aggressive movement toward increased regulation as the Administration prepares for the climate discussions this December in Copenhagen.