The U.S. Environmental Protection Agency (EPA) has issued a proposed rule to require a large part of industries and businesses to monitor and report their greenhouse gas (GHG) emissions.
Following a congressional insert to the omnibus spending bill in December 2007 that required EPA to issue a proposed rule by September 2008 and a final rule by June 2009, EPA, under the Obama administration, has moved forward with an initial step in establishing a GHG regulatory system. The agency is proposing a substantial program of GHG monitoring and reporting with a publicly available registry – the combined preamble and proposed rule are more than 1,400 pages in length. EPA states that the program will be “economy wide” and cover 85 to 90 percent of GHG emissions in the United States from approximately 13,000 facilities, including extractors of crude petroleum and natural gas, coal and oil refineries, ethanol production facilities, industrial landfills, wastewater treatment plants, and any other facility that emits more than 25,000 metric tons of carbon dioxide (CO2) equivalent per year.
The list of sources that would be required to report under the GHG reporting rule may also be those that would be regulated under a federal GHG cap and trade system being discussed by Congress and the Obama administration. EPA states in its proposed rule that the rule is being implemented to gather information for future regulatory and policy decisions.
What Gases are Covered?
EPA has identified the six traditional GHGs for regulation as CO2, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, perfluorocarbons, as well as certain other fluorinated gases. For purposes of comparing the gases with a single unit, gases other than CO2 are converted into the equivalent GHG impact of CO2. The other gases have a greater impact in terms of causing the greenhouse effect and thereby global warming. As an example, a ton of methane emissions would be reported in terms of carbon dioxide equivalent (CO2e); thus, one ton of methane emissions would equate to 20 tons of CO2e. This is critical in understanding the threshold levels for application of the reporting requirements that will be discussed below. Other non-CO2 gases would need to be converted to CO2e before determining whether the GHG reporting obligations apply to a particular facility.
What Facilities are Covered?
The proposed GHG reporting rules would establish four categories of facilities that would be required to measure and report their GHG emissions. In addition, vehicle manufacturers would be required to report the GHG emissions of their vehicles.
The first category of facilities that would be required to report under the rule fall under a list of source categories identified by EPA. These sources include, among others, the following: electric generating plants subject to the Acid Rain Program, namely certain coal-fired power plants; aluminum, ammonia, cement, electronics, lime, and petrochemical manufacturers or producers; petroleum refining; certain underground coal mines; and municipal landfills.
The second category of sources that would be required to report are facilities that emit 25,000 tons per year or more of CO2 from stationary fuel combustion units, miscellaneous uses of carbonate, and all source categories that are listed and that are located at the facility in any calendar year. These sources include, among others, electricity generation, electronics-photovoltaic manufacturing, ethanol production, food processing, glass production, iron and steel production, ferrous alloy production, oil and natural gas systems, pulp and paper, industrial landfills, and wastewater treatment.
The third source of facilities that would be required to report are those that meet all three conditions: (1) does not contain any source category designated for the first two groups of categories; (2) aggregate maximum heat input capacity of stationary fuel combustion units at the facility is 30 million British thermal units per hour or greater; and (3) emits 25,000 tons CO2 or more per year from all stationary fuel combustion sources.
The final category of facilities that would be required to submit GHG emission reports under the proposed GHG reporting rule are suppliers of certain GHG gases or products that when used or burned produce GHGs. The types of suppliers that fit within this category are as follows: coal and coal-based liquid fuels; petroleum products, natural gas and natural gas liquids; producers of industrial GHGs as listed in the rule; importers and exporters of industrial GHGs exceeding 25,000 tons of CO2e; producers of CO2; and importers and exporters of CO2 exceeding 25,000 tons of CO2e.
When Will Monitoring and Reporting be Required?
The rule, if adopted, would require emitters, sellers of certain fossil fuels and other GHGs, and automobile manufacturers to begin collecting data starting January 2010 and report these emissions beginning March 2011.
The proposal would extend the measurement and reporting to a large part of the economy. As companies continue to review future strategies for evaluating the potential risks and opportunities that a GHG regulatory system and potential cap and trade system will present, this proposed rule is the first step in developing a GHG regulatory system. Climate change legislation could bring either risks or opportunities to the rendering industry.
More information on this proposed rule is available at www.epa.gov/
climatechange/emissions/ghgrulemaking.html. Comments on the proposed rule were due June 9, 2009.
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