On October 30, 2009, the United States Environmental Protection Agency (USEPA) published its final rule regarding the mandatory reporting of greenhouse gas (GHG) emissions. Effective January 1, 2010, suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to monitor annual GHG emissions and submit annual reports to the USEPA. The USEPA estimates that approximately 10,000 facilities and 85 percent of total GHG emissions in the United States will be covered by the reporting rule.

Applicability

With few exceptions, reporting is required at the facility level based on the facility’s source category.

Facilities with production processes in certain source categories are automatically subject to the rule regardless of the quantity of GHGs that they emit. Some of these covered source categories include

• aluminum production
• cement production
• petrochemical production
• petroleum refining
• phosphoric acid production
• lime manufacturing

Other facilities with production processes in certain source categories are subject to the new rule only if the facility’s emissions are equal to or exceed 25,000 metric tons of CO2e per year from all sources at the facility. These source categories include

• glass production
• lead production
• iron and steel production
• pulp and paper manufacturing

Facilities that are not covered by the categories described above must report if they emit more than 25,000 metric tons of CO2e per year from one or more stationary fuel combustion sources that have an aggregate maximum rated heat input capacity of 30 million British thermal units per hour or more.

It should be noted that the new rule also covers suppliers and producers of certain products. For example, some producers of natural gas products, petroleum products, coal-based liquids, carbon dioxide and industrial GHGs are required to report. Additionally, importers and exporters of certain products in quantities equivalent to 25,000 metric tons or more of CO2e per year may also be required to report under the rule.

Reporting Requirements

Annual emissions of the following greenhouse gases must be reported

• carbon dioxide
• methane
• nitrous oxide
• sulfur hexafluoride
• hydrofluorocarbons
• perfluorocarbons
• other fluorinated gases (e.g., nitrogen trifluoride, hydrofluorinated ethers)

Emissions are required to be reported in terms of carbon dioxide equivalents (CO2e), meaning the number of metric tons of carbon dioxide emissions that would have the same global warming potential as one metric ton of the emitted gas.

The first report, for calendar year 2010, is due on March 31, 2011.

Monitoring Methods

From January 1 through March 31, 2010, facilities may use best available monitoring methods for any parameter that cannot reasonably be measured according to the monitoring and quality assurance/quality control (QA/QC) requirements of the rule. Starting no later than April 1, 2010, facilities must discontinue using best available methods and begin following the applicable monitoring and QA/QC requirements provided by the rule.

Recordkeeping Requirements

A facility required to report GHGs under this new rule must retain all required records for at least three years in a format that is suitable for expeditious inspection and review. The recordkeeping requirements include, but are not limited to

• a list of all units, operations, processes, and activities for which GHG emissions were calculated
• the data used to calculate the GHG emissions for each unit, operation, process, and activity, categorized by fuel or material type
• the annual GHG reports
• information describing missing data events
• a written GHG monitoring plan

Program Exit

A facility may exit the emissions reporting program and discontinue reporting when one of the following circumstances has occurred:

• the facility has operated for five consecutive years with emissions below 25,000 metric tons of CO2e per year
• the facility has operated for three consecutive years with emissions below 15,000 metric tons of CO2e per year
• the GHG-emitting processes or operations at the facility are shut down

In each instance, the facility is required to notify the USEPA that it intends to cease reporting.

Enforcement

Facilities and suppliers that fail to monitor or report GHG emissions, quantities supplied, or other data elements according to the requirements of this new rule could potentially be subject to enforcement action by the USEPA under Clean Air Act Sections 113, 203, 204 and 205.

Recommendations

In order to prepare for this new reporting rule, it is recommended that companies immediately compare facility data against the rule’s applicability specifications in order to determine if monitoring and reporting will be required. In that regard, the USEPA offers an online tool to help companies assess whether the new rule applies to a specific facility. To access this tool, please see www.epa.gov/climatechange/emissions/GHG-calculator/index.html.

About the Author

Shane A. Farolino is a partner and practice group manager for the environmental, energy and health & safety law practice of Roetzel and Andress, a law firm with eleven offices in Ohio, Florida and Washington, D.C. He focuses on environmental compliance counseling, permitting, and administrative, civil, and criminal litigation. Mr. Farolino has extensive experience in Clean Air Act and Clean Water Act permitting projects, emergency response and crisis management, the defense of environmental enforcement actions, and toxic tort litigation. Before entering private practice, he served as an Assistant Attorney General in the Environmental Enforcement Section of the Ohio Attorney General’s Office.

Photograph: Landscape by Toshi, Poland.