The first step to establishment of a comprehensive climate change regulatory program has been completed by U.S. EPA .  On September 22nd, the Agency finalized its rule on mandatory reporting of greenhouse gas emissions (GHGs).  The rule give the initial glimpses into what the potential overall control program will look.  The most important insight- which industries are likely to be required to control emissions.  

Who is required to report? 

To be covered by the rule, you must first fall within the source categories specified by U.S. EPA.  You must also emit more that a specified threshold.  EPA estimates 10,000 facilities will be covered representing 85% of all domestic GHG emissions.

COVERED INDUSTRIES- coal fired power plans, aluminum production, ammonia production, cement, electronics production, lime, petrochemical, petroleum refining, certain underground coal mines and municipal landfills.  Also covered are importers and exporters of coal, natural gas and petroleum products.

IMPORTANT "NON-COVERED" INDUSTRIES- reporting is not currently required for the following: electronics manufacturers, ethanol production, industrial landfills, wastewater treatment, suppliers of coal.

THRESHOLD- Only the largest facilities emitting GHGs- those that emit 25,000 metric tons or more of CO2 equivalent emissions per year- are required to report annually to U.S. EPA. 

If you are having trouble figuring out whether your facility may be covered, U.S. EPA has developed an "applicability tool" which walks you through the process of determining coverage.

What pollutants are considered GHGs?

There was some open debate as to some of the more "fringe" GHGs.  For now, U.S. EPA covers the following pollutants under the mandatory reporting rule:  carbon dioxide (CO2), methane (CH4), nitrous oxide (N20), hydofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and other fluorinated compounds.

Non-CO2 pollutants must be converted to CO2 equivalent emission under the rule.  This is so emissions of various pollutants can be measured in a common currency.  The equivalency is based upon the global warming potential of the gas.  For example, one ton of methane is equal to 21 metric tons of CO2.

When does reporting start?

Recordkeeping obligation will begin January 1, 2010 for covered facilities.  The first mandatory report must be submitted to U.S. EPA by March 31, 2011 (reporting 2010 emissions). 

When do I have to install monitors?

U.S. EPA allowed some flexibility on use of required monitoring.  It allows the use of "best available monitoring methods" in the first quarter of 2010.  You can ask for an extension for up to December 31, 2010.  You can also use calculations specified by U.S. EPA in place of some monitoring.   However, if your facility already has a continuous emission monitor (CEM) you are expected to add GHG capability.

Do I have to hire a consultant to assess my emissions?

No, but…  U.S. EPA elected not to require third party verification of reported emissions.  However, companies must certify the accuracy of their records.  If you do not have staff on-hand who understand the protocols and methods for determining emissions, companies should strongly consider outsourcing this work.

Can I ever get out of the reporting obligation?

U.S. EPA decided to show limited flexibility on its "once in always in" policy.  You can exit the mandatory reporting program if you do either of the following:  a)  decrease emissions below 25,000 metric tons for five years in a row; or b) reduce below 15,000 tons per year for three years in a row.