On September 30, 2009 we reported (http://tinyurl.com/yb5zes9) that the U.S. Environmental Protection Agency (EPA) issued its final rule for mandatory Greenhouse Gas (GHG) reporting.

In recent months, a number of our industrial clients with plants in the United States, Canada, the United Kingdom, the European Union and Australia have inquired about compliance with the new EPA rule and standards for voluntary and required GHG reports in the United States and elsewhere. In addition to mandatory reporting, our clients are finding that some of their customers are including carbon content in their purchasing decisions and that various government agencies are preparing to require additional carbon emissions reporting. This update suggests that companies may find the World Resources Institute's (WRI) 2009 revised "Greenhouse Gas Protocol Corporate Accounting and Reporting Standard" (http://tinyurl.com/yakjaag) (the WRI Standard)a useful starting point and an additional tool with which to begin responding to fast-developing requirements for GHG emissions reporting

On January 1, 2010, the EPA's Mandatory Reporting of Greenhouse Gases Rule (http://tinyurl.com/ybdrhqn)1 requiring annual reporting of GHG emissions by major emitters went into effect. Canadian jurisdictions, such as British Columbia, also have enacted broad-based mandatory GHG emissions reporting requirements. Australia, the European Union, California, and the Regional Greenhouse Gas Initiative (RGGI) states in the Northeastern United States have as well.

Meanwhile, a number of voluntary GHG reporting programs have emerged. These include the U.S. EPA Climate Leaders, U.S. EPA Voluntary GHG Reporting System, the California Climate Action Registry, the Chicago Climate Exchange and the Climate Registry.

The EPA's rule clearly sets out which companies must report (primarily stationary combustion facilities that annually emit more than 25,000 metric tons of CO2 equivalents). Although the EPA has published extensive information on GHG reporting (http://tinyurl.com/2cy2ah) a number of issues remain undecided. Some of our clients have asked (1) how to inventory and report their emissions; (2) whether a uniform system of carbon reporting yet exists; or (3) whether any system provides adequate information to satisfy regulators, customers, stakeholders and regulatory agencies in different jurisdictions, countries and industrial sectors.

Of course, it's essential that any company deciding whether or how to report GHG emissions should carefully identify the specific rules and reporting protocols it must follow. Perkins Coie lawyers can readily assist you in determining your company's legal obligations in the United States and internationally. To provide a uniform system of recording and reporting that is generally accepted,, the WRI and the World Business Council for Sustainable Development (WBCSD) have published the WRI Standard The WRI is a nonprofit, non governmental organization that includes corporations, entrepreneurs, investors and business schools. The WBCSD is a coalition of 170 international companies active in 35 countries and 20 major industrial sectors. The WRI Standard may be the answer to our clients' (and others') questions about how to report.

The WRI Standard states,

"The GHG Protocol Corporate Standard provides standards and guidance for companies and other organizations preparing a GHG emissions inventory. . . . It covers the accounting and reporting of the six greenhouse gases covered by the Kyoto Protocol. . . . It was designed:

  • To help companies prepare GHG inventories using standardized approaches and principles;
  • To provide industry with information to manage and reduce GHG emissions;
  • To provide consistency in GHG accounting and reporting among various companies and GHG programs;
  • To harmonize GHG accounting and reporting standards internationally; and
  • To encourage different trading schemes and other climate related initiatives to adopt consistent approaches to GHG accounting."


The WRI Standard is designed for industrial companies and public-sector entities to inventory their GHG emissions. It is consistent with numerous reporting, trading and regulatory systems including the United Kingdom Emissions Trading Scheme and the European Union Trading System, the Climate Registry and the California Climate Action Registry, the EPA Climate Leaders Program, the World Wildlife Federation, a number of industry associations and sector-specific programs, and many others. Many government-sponsored mandatory GHG emissions reporting programs are based on concepts that originate in the WRI Standard. In its rulemaking, EPA considered the WRI Standard as the basis for many existing mandatory and voluntary reporting programs, and WRI generally supported the details of EPA's new rule. EPA does not specifically endorse the WRI Standard (or any other protocol). The WRI Standard is not exactly the same as the EPA's rule. For example, the WRI Standard calls for public reporting of GHG emissions (without exception for trade secrets), while the EPA's rule will provide protection for confidential information. The WRI Standard calls for quarterly reporting, while the EPA's rule requires annual reporting. The WRI Standard calls for each reporting entity to provide independent verification of its emissions reporting. The EPA's rule calls for selective verification by the EPA itself. The WRI Standard would require reporting entities to disclose emissions traceable to electricity they consume, while the EPA's rule would not.

Nevertheless, the WRI Standard provides uniform tools for reporting and verifying GHG emissions, calculating GHG reductions and setting GHG reduction goals.

The WRI Standard includes various useful GHG calculation tools and numerous examples drawn from actual company operations, definitions for financial accounting standards, standards for GHG accounting for purchased power and emissions from leased assets, and protocols for reporting GHG emissions as affected by divestments or acquisitions.

The WRI Standard continues to evolve. It does not yet include the agricultural, forestry and land-use (AFOLU) sectors. However, WRI is preparing a proposal for an AFOLU Sector GHG Protocol , which would address common conceptual issues, while providing a foundation for sector-l and region-specific initiatives. Our clients in these sectors should consider monitoring WRI's progress on this new protocol.

Finally, the WRI Standard reminds its users:

Since GHG programs often have specific accounting and reporting requirements, companies should always check with any relevant programs for any additional requirements before developing their inventory.

We heartily agree and repeat that any company deciding whether or how to report GHG emissions should carefully and thoroughly identify the specific rules and reporting protocols it must follow.

Contact counsel if you need assistance to review and apply the information contained in the WRI Standard, participating in the development of additional WRI standards and protocols, and with designing and implementing your GHG inventory, reporting and trading activities.

Footnote

1. 40 C.F.R. pts. 86 et seq.;

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.