GHG Reporting Rule: Deadline for Comments Not Extended
On March 10, 2009, EPA issued an advance copy of its proposed rule for mandatory annual reporting of greenhouse gas (GHG) emissions by certain types of facilities in the United States. Since proposing the rule, the EPA has conducted numerous outreach meetings with relevant stakeholders, including states, tribes, trade associations, and NGOs. EPA is seeking public comment on the rule. The sixty day comment period ends on June 9, 2009. Although EPA has received several requests to extend the comment period, Agency representatives have told us that the comment period will not be extended. Over 300 comments have already been submitted to the docket.
If your facilities emit any of the greenhouse gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride, as well as nitrogen trifluoride and hydrofluorinated ethers) and you have not yet submitted comments, you should consider doing so immediately. Comments supportive of EPA’s findings and approach help ensure that the proposal will not be modified significantly in the final rule. Where aspects of the proposal adversely impact your business, commenting preserves your right to later challenge the rule, should that become a necessary course of action.
Background
The Consolidated Appropriations Act of 2008 (H.R. 2764) directed the EPA to “require mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the economy of the United States.” In proposing the GHG Reporting Rule, EPA has relied upon sections 114 and 208 of the Clean Air Act (CAA), which give EPA broad authority to require emission monitoring and reporting from any entity that has any information related to any of EPA’s responsibilities under the CAA.
Data Collection, Reporting, Verification, and Compliance
Under the proposal, facilities within defined source categories would be required to report emissions to EPA. These include facilities that are presumed to emit more than 25,000 metric tons of carbon dioxide equivalents per year (e.g., electric generating facilities, producers of aluminum, ammonia, and cement, electronics manufacturers, petroleum refiners, and large municipal landfills). Also covered are facilities that determine, based on monitoring data or calculations, that they emit 25,000 metric tons of carbon dioxide equivalents annually from “stationary fuel composition units” (e.g., engines, turbines) or from the production of ethanol, fluorinated gases, glass, hydrogen, iron and steel, pulp and paper, and food stuffs. In addition, suppliers of carbon dioxide and certain specified fossil fuels (e.g., coal, petroleum products) must report, as must manufacturers of motor vehicle engines and other mobile GHG sources (e.g., watercraft, air plane engines).
Stationary sources that already report and collect data in conjunction with other regulatory schemes, would be required to directly measure GHG emissions. Other source categories would be able to rely on facility-specific calculations to estimate emissions. In both cases, the data must be reported directly to EPA on an annual basis, via an electronic system where possible. EPA hopes that the rule will be finalized in time to begin data collection on January 1, 2010, with the first report due to EPA on March 31, 2011.
The EPA is not proposing that emissions data be verified by a third party. Rather, facilities will be required to self-certify that the emissions data are accurate. EPA will conduct its own review of the data for quality assurance and quality control. According to EPA sources, quality assurance and control would likely be modeled after the EPA’s acid rain program, which utilizes a software program for the internal verification process.
Facilities that fail to report GHG emissions could face an EPA enforcement action for civil and criminal penalties. The CAA would allow EPA to compel compliance with the reporting rule, as well as impose civil and administrative penalties of up to $32,500 per day for each day there is a violation.
Possible Areas for Comment
Of the 800 pages in the preamble to the proposed rule, 600 pages are sector-specific. If you have facilities in an identified sector, you should consider closely what has been proposed to ensure that it is accurate and, where possible, suggest a better, cheaper, or faster means of complying with the requirements of the rule, the relationship between the proposed rule and other government efforts to regulate GHG emissions.
In the first 200 pages of the preamble, EPA describes the principles, assumptions and decisions underlying the proposed rule. The Agency specifically requests comment on:
- the prescribed methods for data collection with each source category;
- the certification requirements (e.g., should there be third-party verification);
- the record-keeping requirements;
- the frequency of reporting;
- whether the emission of 25,000 metric tons per year of carbon dioxide equivalents is the appropriate reporting trigger;
- whether there more simplified emission calculation tools that could be used;
- whether reporting is appropriately targeted at the facility level, rather than at the corporate level; and
- whether EPA appropriately excluded facility electrical consumption (i.e., indirect emissions) from the reporting requirements.
Parties affected by the proposed rule may also wish to consider commenting on any other provision of concern.
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