Cap and Trade Delayed, Mandatory Green House Gas Reporting Is Here for Some

With federal health care reform garnering most of the attention these days, it seems fairly certain we will not see a Cap and Trade law for greenhouse gas emissions out of Washington any time soon.  Nonetheless, some companies will still find themselves subject to mandatory reporting requirements for greenhouse gas (GHG) emissions in 2010. 

U.S. EPA issued its Final Mandatory Reporting of Greenhouse Gases Rule earlier this fall.  The rule will become effective December 29, 2009, and includes reporting requirements for 31 types of GHG emission sources.  Reporting requirements for an additional 11 types of emission sources remain in draft as the agency continues to evaluate public comments.  According the U.S. EPA, the monitoring and reporting will guide development of future policies and programs to reduce GHG emissions.  The rule does not limit or require reductions of any GHG emissions.

While carbon dioxide (CO2) gets most of the headlines, the other GHGs regulated by the rule include methane (CH4), nitrous oxide (N2O), hydroflourocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and other fluorinated gases such as nitrogen trifluoride and hydrofluorinated ethers.  Large emitters and suppliers of GHGs must monitor and report their annual green house gas emissions for calendar year 2010.  Reports will include basic facility information as well as GHG emissions for each source, or source category. 

What facilities must monitor and report GHGs in 2010?  While not a comprehensive list, the rule will apply to electricity generation, cement production, petroleum refineries, solid waste landfills, iron and steel producers, pulp and paper manufacturing, manufacturers of certain types of vehicles and engines, as well as other facilities that emit 25,000 metric tons per year of carbon dioxide equivalent.  The rule also requires reporting by GHG suppliers (e.g., commercial CO2 suppliers) and fossil fuel suppliers (e.g., petroleum and natural gas).  The later group must account not only for GHGs emitted in the production of petroleum, natural gas and other fuels, but also the emissions from the anticipated combustion of the fuel by downstream users.  Yes, there will be some double counting when such fuel is used by facilities subject to the GHG reporting rule. 

Major exceptions include research and development activities; small businesses, small vehicle and engine manufacturers, and agriculture.  Among the various information sheets prepared by U.S. EPA, the Guide for Small Businesses may be a good starting point to confirm whether your operations are exempt.   For those that are not exempt, prompt action is required to start tracking GHG emissions in the new year.