EPA Issues Its Final Rule Requiring Mandatory Nationwide Greenhouse Gas Reporting

Responding to a congressional mandate contained in the Fiscal Year 2008 Consolidated Appropriations Act, the Environmental Protection Agency (EPA) issued its final rule regarding the Mandatory Reporting of Greenhouse Gases (the Rule). The Rule, codified at 40 CFR 98, applies to approximately 10,000 facilities and suppliers, which account for an estimated 85 percent of the total annual greenhouse gas emissions in the United States.

The reports required by the Rule will provide EPA, and covered facilities, with an estimate of the greenhouse gas (GHG) emissions generated by a particular industry and source category in a given year.¹ The reports also will provide a basis for facilities within each industry and source category to compare their respective GHG emissions. It is anticipated that the reported emissions data will provide a foundation for the development of future emission reduction programs.

Although the Rule establishes the first national reporting program concerning GHGs, it is important to note that it is narrower in scope and focus than many existing state GHG reporting and reduction programs. The Rule requires emissions reporting only, and is not paired with an emissions reduction program. Additionally, the Rule is not meant to preempt any state from requiring reports on GHG emissions, nor is it intended to supersede any existing state GHG reduction programs.

Reporting Requirements

Commencing January 1, 2010, subject facilities and suppliers must begin monitoring and keeping annual records of the GHGs they release into the atmosphere. Beginning March 31, 2011, each subject entity must electronically submit a report of these emissions, signed by a designated representative or owner. Additionally, all reports must include a provision certifying that, under penalty of law, the report has been prepared and submitted in accordance with the guidelines and requirements of the Rule.

Fundamentally, the Rule requires GHG-producing facilities like cement production plants, electrical generation facilities, manure management systems and municipal solid waste (MSW) landfills, to report all emissions for emission source categories for which a calculation methodology is provided.² Any facility that emits 25,000 metric tons or more of carbon dioxide (CO2) equivalents in a given year is also subject to the mandatory reporting requirements of the Rule. The Rule contains specifics dictating the equipment and methodologies required to monitor source emissions and how to perform emission calculations. Initially, for the first quarter of 2010, the Rule does allow for some leeway in emissions calculations, and does contain some special provisions to simplify the reporting process.

On their face, the requirements for annual reports are not onerous. For example, facilities that emit GHGs must provide, among other things, their name and address, the year and months covered by the report, their annual aggregate GHG emissions (in metric tons of CO2 equivalent), their annual emissions of each source category (in metric tons of each GHG), and such additional information required to adequately explain their calculations and report the results.

The gathering and calculation of this information, however, can impose new challenges, burdens and costs for the reporting entities. For example, owners or operators of subject MSW landfills³ must report methane generation and emissions on an annual modeled basis. Modeling will require the landfill owner/operator to measure (or estimate) the historic annual waste disposal quantities at the landfill site. This quantitative information is either not readily available or generally incomplete at many MSW landfills that operate during the relevant time period. In order to met their reporting requirements under the Rule, MSW landfills with gas collection and control systems must continuously monitor flow rates and the quality, concentration, temperature, pressure and moisture content of the methane they collect and destroy (e.g., via flaring). This may require the installation of new infrastructure and monitoring equipment at a substantial cost.

Record Retention

For a period of three years following each reporting period, each subject facility and supplier of GHGs must retain (either electronically or in paper copy) a list of all operations, processes and activities for which they reported GHG emissions. They must also retain, among other things:

• The data used to calculate the reported GHG emissions (including the calculations and methods used and any facility operating data or information used for the GHG calculation);
• The annual reports;
• A written GHG monitoring plan that identifies, inter alia, the job titles for the people who collected the GHG data, and explanation of the processes and methods used to collect the data, and the methods used for quality assurance, maintenance and repair of the monitoring systems used to collect the data); and
• Maintenance records for all monitoring equipment used to collect the GHG emission data.

Changes from the Proposed Rule

EPA received more that 17,000 comments to the proposed rule during the public comment period. As a result, not surprisingly, the Rule as adopted differs from the rule as initially proposed.  Among the more major changes, the Rule removes several once-included source and supply categories from its reporting requirements, including: food production, wastewater treatment, industrial landfills, coal suppliers, underground coal mines, oil and natural gas systems and electronics manufacturing. The Rule also adds a mechanism for facilities and suppliers to exit the reporting program through the reduction of their GHG emissions. Other changes from the initial proposed rule include technical revisions regarding monitoring methods and equipment, sampling frequency and quality assurance. A summary of these changes can be found here.

Conclusion

In the past, the federal government has left GHG regulation to the states. California and New Jersey have been at the forefront of this movement. By enacting the Rule, the federal government has, for the first time, thrown its hat into the ring. Although the Rule only requires the reporting of GHG emissions, it will result in national inventory of GHG emissions by state, industry and source category. It is also the likely first step toward the future enactment of GHG reduction legislation.  

We will continue to monitor the Rule and its application as the mandatory monitoring, data collection and reporting periods approach. If you have any questions or would like additional details about the proposed rules, their requirements, or their potential impact, you may contact any member of Buchanan Ingersoll & Rooney's Environmental and Toxic Tort Group.