EPA Announces Final Rule on Mandatory Reporting of Greenhouse Gas Emissions

On September 22, EPA Administrator Lisa Jackson signed the Final Mandatory Reporting of Greenhouse Gases Rule. The rule requires reporting of greenhouse gas emissions from large sources and suppliers in the United States in order to collect emissions data to inform the development of climate change policy.

The announcement concludes an effort begun in late 2007, when pursuant to a Consolidated Appropriations Act, Congress directed the EPA to issue regulations requiring mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the U.S. economy.

The EPA initially announced its proposed rule on March 10, 2009, with a comment period and White House review occurring in the subsequent months. Although the EPA made some changes in the final rule, several key components of the rule remained intact. In general, the rule covers sources emitting any of the major greenhouse gases (CO2, CH4, N2O, HFC, PFC, SF6, and other fluorinated gases) in an amount equal to or greater than 25,000 metric tons of carbon dioxide or its equivalent per year.

Moreover, the rule covers a wide swath of upstream sources and downstream suppliers, as well as motor vehicle and engine manufacturers. Upstream sources include mainly fuel and industrial gas suppliers. Downstream sources include stationary combustion, which is mainly electricity generation, as well as many different types of industrial processes, from cement manufacturers to chemical plants. All told, the EPA calculates that the reporting requirement would cover about 10,000 facilities (down from an estimated 13,000 facilities covered by the proposed rule), representing an estimated 85 percent of U.S. greenhouse gas emissions.

Information that covered sources would have to report under the rule would include:

• Total annual GHG emissions aggregated for all the source and supply categories for which emissions calculation methods are provided.
• Annual mass GHG emissions for each source and supply category, by gas.
• Within a given source category, emissions at the level required by the subpart that applies to that category.
• Certain activity data (e.g., fuel use, feedstock inputs) that were used to generate the emissions data, as specified in each subpart.
• For some source categories, additional data to support QA/QC and verification.

Even though the final rule contained no dramatic changes, there were some important revisions of note. First, the EPA eliminated certain source and supply categories that were included in the proposed rule, including electronics manufacturing, ethanol production, food processing, industrial landfills, wastewater treatment, and coal suppliers.

Second, the proposed rule had a no-exit provision whereby facilities and suppliers had to continue to report even if they dropped below the 25,000 mt CO2e threshold. Under the final rule, facilities and suppliers can cease reporting after five years of emissions below that threshold, and there are additional incentives for further reductions.

Third, the EPA relaxed certain requirements relating to measuring, monitoring, and sampling, in order to reduce the burden on reporting facilities.

Fourth, for certain sources and suppliers, the EPA required more data to be reported in order to increase the agency's ability to verify reported emissions, yet also lowered the records retention timeline from five to three years.

Finally, in a nod to the agriculture industry, the EPA included an animal population threshold and reduced monitoring requirements on manure management systems.

For most facilities covered by the rule, data collection begins soon—on January 1, 2010—and the first reports are due March 31, 2011. Data collection for motor vehicle and engine manufacturers begins in 2011.