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EPA Proposes Rule for GHG Emissions Reporting

06.01.2009

By Larry Kane, Attorney, Bingham Greenebaum Doll LLP

Pursuant to a late 2007 Congressional directive, the U.S. EPA issued a proposed rule on March 11, 2009 to mandate the monitoring and reporting of greenhouse gas (GHG) emissions. The voluminous rule proposal was published in the Federal Register on April 10, 2009 (74 Fed.Reg. 16447). A 60-day comment period on the rule proposal ends on June 9, 2009.

According to the proposal, U.S. EPA estimates that approximately 13,000 facilities will be subject to the rule’s GHG reporting requirements, representing from 85-90% of all GHG emissions in the United States. Six major greenhouse gases or groups of gases would be subject to the rule’s reporting obligations: CO2, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, and perfluorochemicals, along with certain other fluorinated gases. Reporting and recordkeeping obligations under the proposed rule appear to be rather extensive.

Overall, the rule would cover three general classes of entities: (1) larger GHG emitters; (2) producers or manufacturers of fuels or other substances that, when combusted or otherwise used in manufacturing processes, lead to emission of GHGs; and (3) manufacturers of transportation equipment.

Applicability of the rule is generally determined in one of two ways: (1) certain listed source or producer categories would be subject to the rule regardless of the level of GHG emissions; and (2) other sources of GHG emissions above a specific threshold level of 25,000 metric tons/year of CO2 equivalent would also be subject to reporting under the rule. More specifically:

  • Source categories proposed for inclusion regardless of emission levels include facilities that produce adipic acid, aluminum, ammonia, cement, HCFC-22, lime, nitric acid, petrochemicals, phosphoric acid, silicon carbide, soda ash, and titanium dioxide, as well as petroleum refineries.
  • Other source categories that would be subject to the rule if facility emissions exceed 25,000 metric tons of CO2-equivalent include producers of ferroalloys, fluorinated greenhouse gases, glass, hydrogen, iron and steel, ethanol, lead, magnesium, pulp and paper, and zinc. Also included are certain food processing facilities, oil and natural gas systems, and industrial wastewater treatment systems. Facilities potentially subject to the rule only on the basis of combustion of fossil fuels would be exempt if total maximum rated heat input capacity for all stationary combustion units or equipment is less than 30 MMBtu/hr.
  • Still other sources appear to be subject to the rule on the basis of criteria that are a hybrid of the first two approaches, being identified in part by source category but also subject in part on the basis of emission thresholds or other threshold applicability criteria. This latter grouping includes electric power systems, electricity generating facilities, electronics manufacturing facilities, landfills, manure management facilities and underground coal mines.

Excluded from reporting obligations under the proposal would be: (i) individual homeowners and vehicle owners; (ii) operators of vehicle fleets; (iii) most commercial buildings; (iv) the bulk of small businesses; and (v) most agricultural operations (except for large manure management operations).

U.S. EPA intends, if the rule is finalized quickly enough, that monitoring of GHG emissions by affected facilities would begin in 2010 with submittal of annual reports to commence in 2011.

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