The U.S. EPA greenhouse gas reporting rule

There was heightened public attention on climate action in 2009 because President Obama shifted U.S. policy from being defensive to being proactive. Three strong federal measures for climate action were taken in advance of the Copenhagen Climate Conference in December 2009, where a binding agreement on emissions levels was expected.

01/01/2010


 

 

 

There was heightened public attention on climate action in 2009 because President Obama shifted U.S. policy from being defensive to being proactive. Three strong federal measures for climate action were taken in advance of the Copenhagen Climate Conference in December 2009, where a binding agreement on emissions levels was expected.

 

Namely, the Obama administration signed Executive Order 13514 to reduce federal greenhouse gas (GHG) emissions by 20% by 2020; the U.S. Environmental Protection Agency issued the mandatory GHG reporting rule for large emitters; and the EPA declared GHGs in the atmosphere to be dangerous to human health and the environment.

 

Of these, only the mandatory GHG reporting was a new regulation impacting private companies and their facilities.

 

What, when, and why

A Supreme Court ruling on April 2, 2007 (Massachusetts v. EPA, 549 U.S. 497), found that GHGs, carbon dioxide, methane, and four other gases are air pollutants covered by the Clean Air Act (CAA). This paved the way for the EPA to begin regulating GHG emissions based on the FY2008 Consolidated Appropriations Bill passed in 2007. The proposed rule on mandatory GHG reporting was published on April 10, 2009, and after reviewing more than 17,000 comments, the final rule was published on Sept. 22, 2009, as the Final Mandatory Reporting of Greenhouse Gases Rule.

 

The rule was published in the Federal Register on Oct. 30, 2009, and took effect on Dec. 29, 2009. The new rule is ensconced in the Code of Federal Regulations primarily under Title 40, Protection of the Environment, Part 98 Mandatory Greenhouse Gas Reporting. Thus, you will see specifications of the rule referenced as 40 CFR 98. For example, the definition of facilities covered by the rule is under 40 CFR 98.6. You can access 40 CFR online at www.epa.gov/lawsregs/search/40cfr.html ; however, it takes five mouse-clicks and some guesswork to get to the mandatory GHG reporting rule because the Government Printing Office has not yet given it its final placement on the Website. Here's a temporary URL to the final rule, which will enable you to track or cite precise 40 CFR 98 provisions: ow.ly/R3vg .

 

Applicability

The rule affects stationary sources, i.e., fuel and chemicals suppliers, direct emitters of GHGs, and manufacturers of mobile sources and engines, that generate 25,000 metric tons/year (tpy) or more of carbon-equivalent emissions (CO2e).

 

When determining applicability, facilities with conventional buildings must consider the sum of CO2e emissions from onsite combustion systems, such as boilers, combustion turbines, engines, incinerators, and process heaters. The rule excludes flares (unless otherwise required by another subpart of the rule), portable equipment, emergency generators, emergency equipment, agricultural irrigation pumps, and combustion of hazardous waste (except for co-fired fuels).

 

Not covered are emissions normally considered for carbon footprint calculations, such as:

 

  • Mobile sources (cars, trucks) used by the company or for commuting staff

  • Electricity taken from the grid that was generated at a remote power plant

  • Heating or cooling provided by a district energy system

  • Downstream processing of waste

  • Materials used by the company, such as office supplies and cafeteria food.

The rule is aimed at the nation's largest emitters such as mining sites, engine-production facilities, cement producers, and landfills; however, the EPA believes that some commercial and institutional facilities will have to report.

 

How do owners of these facilities know whether the rule applies to them? A thorough discussion and decision flow diagram for applicability determination is available at the EPA Website at ow.ly/R6RA , and an online calculator can be found at ow.ly/R7Hy .

 

To help establish a sense of scale of the threshold based on electricity or fuel consumption, 25,000 tpy of CO2e is generated by approximately:

 

  • 35,800 MWh of base load electricity (in Chicago)

  • 2.46 million gal of diesel fuel oil

  • 457 million cu ft (or 4.57 million therms) of natural gas.

The EPA deliberately set such a large threshold to achieve a practical administrative burden on the agency and on reporters. At 25,000 tpy, the EPA estimates 10,000 facilities are applicable, which are responsible for about 85% of the nation's GHG emissions.

 

To establish this threshold, the EPA unilaterally amended the CAA, which was established originally to regulate major and some minor pollutants such as sulfur dioxide and nitrogen oxides from power plants and industrial facilities. The CAA has a default reporting threshold of 100 tpy for some major pollution sources and 250 tpy for others.

 

The EPA “tailored” the CAA for CO2e because 100 tpy or even 250 tpy thresholds would have resulted in too many applicable facilities. For example, at 100 tpy, the EPA estimated that 785,000 commercial, industrial, and residential buildings would be applicable and another 7,300 new reporters would be added each year. At 250 tpy, two orders of magnitude less than the 25,000 tpy threshold, 2% of commercial buildings would be applicable. This may seem like a small number, but it amounts to almost 100,000 buildings.

 

Facilities versus buildings

You might have noticed that there's a comingling of terms and numbers concerning “facilities” and “buildings.” There is indeed a difference—a single facility can consist of more than one building. EPA seems to mix these up in their working papers and communications, but the rule itself is clear. It also is noteworthy that the definition of “facility” varies for hazardous waste/materials, Clean Water Act, and air emissions. For the GHG reporting rule, a footnote on page 8 of the rule as published in the Federal Register sets forth the definition of facility as follows:

 

For the purposes of this rule, facility means any 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 a public roadway or other public right-of-way and under common ownership or common control, that emits or may emit any greenhouse gas. Operators of military installations may classify such installations as more than a single facility based on distinct and independent functional groupings within contiguous military properties.

 

Accordingly, a university, hospital, or manufacturing plant with more than one building is considered a single facility if the buildings are located on contiguous or adjacent properties and are under common ownership or control. The buildings do not have to be connected by walkways, tunnels, pipelines, etc. to be considered a single facility. If the aggregate GHG emissions of all buildings (and relevant stationary sources) amount to or exceed 25,000 tpy, the facility will have to report. However, if, for example, a university has buildings that are not located on contiguous or adjacent property, they would be considered separately.

 

Reporting

Applicable facilities must begin tracking their emissions in 2010, and the first report is due in 2011. Because the EPA has yet to finalize reporting processes, there are “special provisions” for the 2010 reporting year, which can be found on the EPA Website at ow.ly/R1Wa . Note that the special revisions references sections of the rule by 40 CFR 98 section numbers, as found at ow.ly/R3vg .

 

Facilities that are not applicable do not have reporting requirements. Facilities that have to report will have to do so for at least five years, even if they fall below the threshold in one or more years after the first year of applicability. After five years, facilities can coordinate their reporting status with the EPA if they are believed not to be applicable.

 

With 19 states having mandatory GHG reporting provisions in place and 22 states having voluntary reporting measures, the EPA has signaled that it will be working closely with states on GHG reporting.

 

Extraordinary resources are online at the EPA Website developed to support the mandatory GHG reporting rule ( www.epa.gov/climatechange/emissions/ghgrulemaking.html ). Those new to the Clean Air Act can benefit from visiting The Plain English Guide to the Clean Air Act at www.epa.gov/air/caa/peg .

 



 



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