Wednesday, February 3, 2010

Are You Ready for the EPA, January 2010, GHG Reporting Requirements?


On January 1, 2010, many manufacturing facilities, facilities emitting greenhouse gases, GHG, and suppliers of fossil fuels and industrial GHGs will, for the first time, be required to begin monitoring their emissions of GHGs. By March 31, 2011, these companies (more than 10,000 U.S. facilities) must submit the first annual report to the US Environmental Protection Agency (EPA) on the emissions data collected during the prior year.

With the goal of understanding the origin of GHGs, EPA issued these fairly complicated and potentially expensive requirements in a final rule on September 22, 2009 pursuant to EPA's authority under the Clean Air Act to require reporting of GHG emissions (codified at 40 C.F.R. pts. 86, 87, 89, 90, 94, 98, 1033, 1039, 1042, 1045, 1048, 1051, 1054, and 1065).

One can view the rule and related analysis and information from EPA at
Companies with facilities emitting or products related to GHGs may consider taking the following initial steps to evaluate appropriate measures related to the Rule.

Step 1-Determine If the Rule Applies to the Enterprise

The GHG Rule applies to a variety of categories of industries and types of facilities; however, in certain categories if the facilities do not emit more than a threshold amount they are exempt from the monitoring and reporting requirements.

Facilities Emitting GHGs:

Certain industrial facilities (17 different types2) must report GHG emissions regardless of the level that such facilities emit by facility.

Other specific facilities 3 and those not identified in the rule will only be required to report emissions if they emit in excess of 25,000 metric tons of CO2 equivalent (CO2e) annually from all stationary fuel combustion devices. It is specifically noted in the rule that any CO2 emitted from the combustion of biogenic fuels is excluded from the applicability calculations for this category (however biomass-related emissions must be included in any report generated by a facility subject to the GHG rule and should be independently identified).

Step 2-Evaluate Monitoring and Reporting Readiness

Corporations, enterprises, and companies subject to the reporting rule should investigate and plan for mandatory monitoring in the upcoming weeks. The GHG rule does provide for the use of "best available" monitoring methods for the first quarter of 2010 and establishes an extension request process should facilities require additional time for purchasing and / or installing monitoring equipment.

Procedures for evaluating data and preparing reports may be subject to mid and long term interpretation. Work procedures should be documented and reevaluated for compliance on a repetitive basis. Lastly, collected data and complied records should be retained for at least three years or longer, depending on company records retention policy.

Note, U.S. Federal stimulus funding eligibility (monitoring equipment purchase) should be integrated into the program decision making process. It has been reported that EPA has millions of dollars to support this national initiative.

Step 3-Understand Public Disclose Realities

In today’s environment, all companies are cautious when it comes to external reporting and protecting the brand. GHG reporting should not be an exception. The enterprise should carefully consider its reporting and communication strategy. Reporting policy and downstream implications should be measured before public GHG data dissemination.

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