EPA is set to propose new federal greenhouse gas reporting rules in September. Under a provision inserted into the Omnibus Spending Bill in late 2007, the EPA must propose rules by September of this year and issue final rules by June 2009. I have been keeping in touch with my contacts at EPA and the draft rule will be issued in little over a month..
EPA will be proposing several approaches to measuring and reporting greenhouse gas emissions, and then will recommend an approach. The Agency then will be looking for comments from the public and industry on the approach they will ultimately take in the final rules that will be issued next year.
According to my contacts at EPA, several issues will arise:
- Threshold of emissions that will have to be reported--EPA is looking at 1,000, 10,000, or 100,000 tons per year as a cutoff, below which no reporting would be necessary. Since proposed legislation in Congress would regulate sources at or above 10,000 tons per year, this may be the likely threshold that EPA will adopt.
- Who reports, the individual facility or the company?--This an issue EPA will address in the proposed rule.
- Data flow--this is a question of to whom will the information be submitted, whether to EPA or to states.
- Methodology for estimating emissions--EPA is planning on using established methodologies as much as possible, whether from the API, the Climate Registry, or those adopted by California.
- Reporting frequency--the agency is evaluating whether reports will be submitted annually or more frequently.
- Which gases must be measured and reported?--EPA appears to be leaning toward regulating all six greenhouse gases, including CO2, methane, and nitrous oxides.
- Verification--the agency is debating whether a third party must verify the emissions estimates. As EPA is anticipating climate change legislation and carbon credit trading, EPA may require third-party verification in preparation for award of carbon allowances and a carbon credit trading market.
Thes rules will potentially impact a significant portion of industry and business and the US economy. Numerous comments on the proposed rules are expected. The final outcome will not be known until June of next year. It is also possible that a new presidential administration will alter the approach proposed by the Bush Administration.
In any event, these rules once proposed will have a significant effect on many businesses. Companies with significant emissions may want to begin the process of identifying sources of greenhouse gas emissions and estimating those emissions in preparation of future reporting obligations, particulalry those with numerouls sources at numerous facilities.