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At a Glance
- The Mandatory Greenhouse Gas Reporting Program does not require regulated entities to reduce emissions. However, as noted below, the New York Department of Environmental Conservation will set greenhouse gas emissions amounts for regulated companies that do not file reports.
- The Department’s current guidance indicates that it is “committed to a phased implementation, with the initial focus on education and outreach.” That said, the Department intends to consider formal enforcement / penalties for violations after the educational phase ends (that exact date is currently unclear).
- Repeat noncompliance will be subject to compounding violations (e.g., each metric tonne of carbon dioxide equivalent emitted but not reported will be treated as a separate violation; each day that a report is late, incomplete, or inaccurate will be treated as a separate violation). Under New York’s Environmental Conservation Law, the maximum civil penalty would be up to $18,000 per violation, plus up to $15,000 for each day the violation continues.
Under Governor Kathy Hochul’s direction, the New York Department of Environmental Conservation (the Department) finalized regulations that require certain entities transacting business in New York to track and monitor their 2026 greenhouse gas (GHG) emissions, and to report those emissions by June 1, 2027 (and annually thereafter).
Coming in at over 340 pages, the Mandatory Greenhouse Gas Reporting Program (the Reporting Program) is robust and requires careful attention to various regulatory requirements. The following provides a nonexhaustive overview of “Five Things to Know Now” as regulated entities (referred to as Reporting Entities) prepare to respond to the Reporting Program.
1. Regulatory and Reporting Thresholds Are Definition Intensive
Reporting Entities are broadly defined to include a “facility1 owner2, operator3, supplier4, or electric power entity5” subject to the Reporting Program.
Reporting Entities must have a nexus with the state of New York, which varies by Reporting Entity:
- Facilities located in New York and emit 10,000 metric tonnes or more of carbon dioxide equivalent (CO2e)
- Fuel suppliers that own and distribute for sale any affected liquid or gaseous fuel in any quantity
- Electric power entities that emit any GHG emissions or import megawatt hours into New York regardless of emission volume
- Waste haulers or transporters for which estimated emissions from solid wastes transported to landfills or combustion facilities outside of New York State exceed 10,000 metric tonnes of CO2e in any year
- Anaerobic digestion and liquid storage of waste at facilities like wastewater treatment plants and concentrated animal feeding operations, where wastes are imported to the facility or generated at the facility in an amount that would generate 10,000 or more metric tonnes of CO2e per year
2. Reporting Entities Must Track 2026 GHG Emissions Now — and Will Have to Disclose Robust Technical Data Sets in 2027
The Reporting Program requires Reporting Entities to submit an annual emissions data report that covers all source categories and GHG emissions for the reporting source (and follow specified calculation methods identified by the Reporting Program).
In additional to general requirements, Reporting Entities must report information about the facility’s energy acquisitions and energy provided or sold (e.g., electricity purchases outside the facility’s boundary, thermal energy purchases outside of the facility’s boundary, etc.), emissions from cogeneration, and increases or decreases of five percent or more in GHG emissions.
According to the Department’s guidance, the Reporting Program does not require Reporting Entities to reduce emissions. However, as noted below, the Department will set GHG emissions amounts for regulated companies that do not file reports. While this is not an emissions mandate, the Department’s enforcement approach is likely to generate conflict regarding: (i) the accuracy of the emissions amount set for noncomplying entities by the Department, and (ii) whether that power effectively operates as a “back door” for regulated entities to reduce their emissions.
Reporting Entities will be required to submit their reports online using the Department’s Greenhouse Gas Reporting Tool (e-GGRT).
3. Verification Requirements Are Extensive, but Exclusive to Large Emission Sources
Generally, verification requirements under the Reporting Program apply to Large Emissions Sources only. The Reporting Program requires independent third-party assessment to be provided at a reasonable assurance level.
Large Emission Sources must complete the verification process, including submission of a verification statement to the Department, by December 1, 2027, for emissions year 2026; December 1, 2028, for emissions year 2027; and by August 10 for each emissions year thereafter.
Large Emission Sources are defined as follows:
- Facilities with CO2e emissions of 25,000 metric tonnes or more per emission year
- Suppliers of natural gas that supply 15 million cubic feet or more of natural gas per emission year
- Suppliers of liquid fuels / petroleum products that supply 100,000 gallons or more of affected liquid fuels (i.e., liquid fuels or petroleum products owned in New York and destined for, or resulting in, final sale in New York) per emission year
- Suppliers of liquified natural gas (LNG) or compressed natural gas (CNG) that supply 15 million cubic feet or more of LNG and/or CNG per emission year
- Suppliers of coal that supply 500 U.S. short tons or more of coal per emission year
- Waste haulers and transporters with CO2e emissions of 25,000 metric tonnes or more per emission year. Note that the threshold applies to the sum of emissions reported for out-of-state landfill facilities and out-of-state combustion facilities for all waste exported out of New York State.
Verification requires, among other things, development of a verification plan, documented meetings with the emission source, site visits, review of the emission source’s operations, product data and emissions, development of a sampling plan, data checks to determine the reliability of the emissions data report, a reasonable assurance finding based on the verification team’s review of methods and factors used to develop the emissions data report, logging of any issues identified during the course of the verification process, assessment of material misstatements, review of missing data (if any), and review of product data.
4. Activity-Specific Reporting Requirements Add Granularity and Complexity for Certain Reporting Entities
The Reporting Program includes additional, activity-specific reporting requirements for Reporting Entities that are:
- Aluminum producers
- Operators of anerobic digestors and liquid waste storage
- Cement producers
- Electric power entities
- Generators (or co-generators) of electricity
- Electronics manufacturers
- Facilities that combust fuel at a stationary source (e.g., producing steam, using continuous emissions monitoring systems (CEMS), producing biomass)
- Glass producers
- Hydrogen producers
- Steel and iron producers
- Lead producers
- Oil and gas system operators
- Solid and liquid waste managers
- Agricultural lime and fertilizer suppliers
- Coal suppliers
- Liquid fuel and petroleum product suppliers
- Natural gas, natural gas liquids, compressed natural gas, and liquified natural gas suppliers
- Operators of facilities producing upstream out-of-state emissions from fossil fuels or products
- Waste haulers and transporters
- Fluorinated GHG producers
Careful review of these additional, activity-specific requirements is warranted.
5. Enforcement Will Phase In, but Penalties for Noncompliance Will Be Significant
The Department’s current guidance indicates that it is “committed to a phased implementation, with the initial focus on education and outreach.” That said, the Department intends to consider formal enforcement / penalties for violations after the educational phase ends (that exact date is currently unclear).
The Department will develop and assign emissions for any Reporting Entity that does not submit required emission data reports or verification statements.
Repeat noncompliance will be subject to compounding violations (e.g., each metric tonne of CO2e emitted but not reported will be treated as a separate violation; each day that a report is late, incomplete, or inaccurate will be treated as a separate violation). Under New York’s Environmental Conservation Law, the maximum civil penalty would be up to $18,000 per violation, plus up to $15,000 for each day the violation continues.
In Closing
This alert provides a preliminary, nonexhaustive overview of the Reporting Program. Further analysis is required as each Reporting Entity must determine how to develop the required disclosure based on its unique circumstances.
For further information, you may contact the authors.
- A “facility” is “any physical property, plant, building, structure, source, or stationary equipment located on one or more contiguous or adjacent properties in actual physical contact or separated solely by a public roadway or other public right-of-way and under common ownership or common control, that emits, may emit, or may cause to emit any GHG.”
- “Owner” is not defined expressly under the Reporting Program but is essentially included in the definition of “operator.” See footnote 3, below.
- “Operator” is defined as “the person, including an owner, having operational control of a facility.
- A “supplier” is “a producer, importer, exporter, enterer, position holder, interstate pipeline operator, intrastate pipeline operator, energy service company, or local distribution company of a fossil fuel, fuel, petroleum product, agricultural lime or fertilizer, a fluorinated GHG, or products and systems.”
- An “electric power entity” or “EPE” is “an electricity importer, electricity exporter or a retail provider.”
