U.S. EPA (EPA) published its new Mandatory Green House Gas (GHG) Reporting Rule in the Federal Register last Friday, Oct. 30. The new final rule requires large GHG emitters and suppliers across the country to monitor and report annual green house gas emissions. Although EPA announced the new rule at the end of September, the rule does not become effective until 60 days after publication, or Dec. 29, 2009.

In addition to basic facility information, regulated sources will be required to report annual GHG emissions for each source category covered by the rule. The rule does contain a few special provisions applicable to the first few months of reporting. There is a one-time-only option to use "best available monitoring methods" (including alternative monitoring, supplier data or engineering calculations) from January through March 2010, if a given parameter cannot be measured as required in the rule. This provision was designed to facilitate compliance by facilities that cannot practicably install and operate required GHG monitoring equipment by Jan. 1, 2010. EPA may grant waivers to allow such "best available monitoring methods" on a case-by-case basis after April 1, 2010, but these waivers cannot extend beyond Dec. 31, 2010. Applications for waivers are due 30 days after the rule becomes effective, or Jan. 28, 2010. The rule also allows facilities with only stationary fuel combustion sources to submit an abbreviated GHG report for the 2010 reporting year only.

GHGs subject to the requirements in the new rule include CO2, methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and other fluorinated gases. The rule does not impose any GHG emissions limits or actual reduction of GHG emissions. However, many see this comprehensive tracking and reporting of both direct and indirect GHG emissions as the first step toward federal regulations to reduce the emission of GHGs.

Beginning in January 2010, the following sources will be required to collect GHG emissions data for annual reporting:

  • Listed facilities, including:
    • Electricity Generation (if report CO2 year-round through Part 75)
    • Adipic Acid Production
    • Aluminum Production
    • Ammonia Manufacturing
    • Cement Production
    • HCFC-22 Production
    • HFC-23 Destruction Processes
    • Lime Manufacturing
    • Nitric Acid Production
    • Petrochemical Production
    • Petroleum Refineries
    • Phosphoric Acid Production
    • Silicon Carbide Production
    • Soda Ash Production
    • Titanium Dioxide Production
    • Municipal Solid Waste Landfills (if GHG emission > 25,000 CO2 e)
    • Manure Management Systems (if GHG emission > 25,000 CO2 e)
  • Other listed facilities (including iron and steel producers, ferroalloy producers, pulp and paper manufacturing, and hydrogen producers) that emit 25,000 metric tons of CO2 e or more per year of combined emissions from listed facility sources (which include stationary fuel combustion units);
  • Facilities not listed above from which emissions are covered only from all of a facility's stationary fuel combustion sources which, combined (i) emit 25,000 metric tons of CO2 e or more per year, and (ii) have an aggregate rated heat input capacity of 30 mmBtu/hr or greater;
  • Certain "suppliers" of listed products, including CO2, industrial GHGs, petroleum products, coal-to-liquids, and natural gas liquids; and
  • Certain manufacturers of heavy-duty engines and vehicles, off-road engines and vehicles, and motorcycles (starting in model year 2011).

The rule provides exemptions for certain types of operations like research and development activities, some small businesses, and small vehicle and engine manufacturers. Although the rule does not apply to the majority of agricultural operations, a livestock facility that emits 25,000 metric tons of CO2 e or more per year from manure management systems is obligated to report. The rule provides "off roads" for facilities that, due to emission reductions, no longer need to report.

The final rule was amended to provide that any facility may stop reporting its GHG emissions if it can show emissions of less than 25,000 metric tons of CO2 e for five consecutive years, emissions of less than 15,000 metric tons CO2 e for three consecutive years, or closure or removal of all sources covered by the rule.

With some exceptions, most facilities that have continuous emissions monitoring systems (CEMS) now will be required to directly monitor CO2 emissions. Facilities without CEMS will have a choice of monitoring via CEMS or calculating GHG emissions using emissions factors.

Fixed facilities and qualifying "suppliers" will be required to report both their direct GHG emissions and indirect GHG emissions that could result from downstream combustion of a fossil fuel or use of a product the facility supplies. Therefore, petroleum refineries will be required to report both their own direct GHG emissions and the anticipated GHG emissions from eventual downstream combustion of the fuel, while a large downstream consumer of that same fuel also will be required to report its actual GHG emissions from combusting that fuel. EPA acknowledged that this would introduce "inherent double-reporting of emissions," but claims the GHG information to be collected is still valuable to assess facility and regional-level GHG emissions.

The first annual GHG emission reports must be submitted to EPA electronically by March 31, 2011. Annual reports are required every March 31 thereafter. Though most data will be collected at the facility level, in some cases the rule provides for reporting at the corporate level (e.g., certain fuel suppliers and GHG importers, and off-road/heavy duty vehicle and engine manufacturers), and in a few cases, reporting is required for individual units or process lines.

Although EPA initially included third-party certification as a possible alternative in the proposed rule, ultimately EPA decided not to require it in the final rule and instead adopted selfcertification. Thus, facilities only will be required to self-certify the accuracy and authenticity of the GHG data they report to the EPA. EPA will retain the right to independently verify any data submitted, including through on-site audits. EPA has also made it clear that this rule is not a part of Title V of the Clean Air Act and EPA will not require that the rule's obligations become part of source's Title V operating permit.

EPA stated that the mandatory reporting rule is not meant to replace or preempt existing state emissions reporting programs, but will be enforced alongside those existing reporting requirements. Facilities will report GHG emissions directly to EPA. EPA has expressed its intent to combine this mandatory federal reporting program with existing GHG reporting programs in individual states and to coordinate implementation to the extent possible. However, EPA has no current plans to delegate authority to the states for implementing and enforcing federal GHG reporting.

Facilities and suppliers potentially subject to mandatory reporting will now have the remainder of 2009 to determine whether they are covered by the rule, which sources are required to report, and steps the facility must take to meet the monitoring standards provided in the rule.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.