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MANDATORY REPORTING UNDERWAY FOR GREENHOUSE GAS EMISSIONS EPA issued a final rule in September 2009 requiring mandatory reporting of greenhouse gas (GHG) emissions. This rule is the Obama administration's first major regulatory action on GHGs. The GHG reporting rule, which was Congressionally-mandated in an appropriations bill signed by President Bush in late 2007, requires most sources to submit their first annual GHG emission report on March 31, 2011, covering emissions for the calendar year beginning January 1, 2010. EPA estimates that the rule will cover 85% of total U.S. GHG emissions from approximately 10,000 facilities, and is expected to cost, in total, for all covered private sector facilities, approximately $115 million the first reporting year and $72 million each subsequent year. Covered Sources and GHGs The threshold emissions level for covered facilities is 25,000 metric tons of carbon dioxide equivalent ("O2e") per year - and tere are 31 covered source categories in the final rule. In general, fossil fuel suppliers, industrial gas suppliers, manufacturers of engines and vehicles (except those from the light duty sector), and other downstream facilities that emit at least 25,000 metric tons of CO2e annually are covered under the final rule. The following source categories, which were included under the proposed rule, are not required to report emissions under the final rule: -Oil and natural gas systems -Electronics manufacturers -Ethanol producers -Coal suppliers and underground coal mines -Wastewater treatment facilities -Industrial landfills -Food processors -Fluorinated GHG producers and magnesium producers -Sulfur hexafluoride emissions from electrical equipment -Research and development ("R&D") activities Another key provision in the final rule, not included in the proposed rule, allows facilities to cease reporting if their emissions fall below the threshold for a specified period of time. Specifically, covered facilities and suppliers may: -cease reporting after emissions have fallen below 25,000 metric tons CO2e per year for five consecutive years; -cease reporting after emissions have fallen below 15,000 metric tons CO2e per year for three consecutive years; or -cease reporting if GHG-emitting processes or operations are shut down. As in the proposed rule, the GHGs covered by the proposed rule are: carbon dioxide (CO2); methane (CH4); sulfur hexafluoride (SF6); nitrous oxide (N2O); perfluorocarbons (PFC); hydrofluorocarbons (HFC); and other fluorinated gases, including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE). All GHGs will be measured and reported in CO2e, based on a conversion table supplied in Table A-1 of the final rule. Reporting Methodology for Stationary Sources The reporting methodology for stationary sources varies depending upon the industry sector, but generally, reporting will be from the facility, rather than the corporate, level. Certain suppliers of industrial GHGs and fossil fuels, as well as vehicle and engine manufacturers, will report at the corporate level. Facilities already required to report and collect data regarding one or more GHG, such as those facilities regulated under the Clean Air Act Acid Rain Program, will report GHG emissions based on direct measurements of emissions from each facility. Facility-specific calculation methods will be used for other sources. The proposed rule provides those calculation methods by industry sector, with sectors defined by their NAICS code, starting at Subpart C § 98.30. In response to objections from industry representatives, who had argued that regulated sources would not have sufficient time to install all the required data-collection devices and properly train personnel, the final rule now allows emission estimation for a limited time period. Specifically, during the first quarter (January through March) of 2010, covered entities can collect emissions data based on best available monitoring methods, rather than by using the otherwise-required data collection techniques. Reporting Threshold Calculation for Stationary Sources Unless otherwise addressed, any stationary facility that meets the annual emissions threshold of 25,000 tons of CO2e, in total, must report all GHGs for which there are methods to measure data. A facility may develop capacity-based thresholds, if feasible. Those facilities in the Acid Rain Program, typically electricity generators and oil refineries, are expected to use capacity-based thresholds. Some facilities will have no threshold or thresholds different from 25,000 tons of CO2e. The threshold applicable to each source category is provided in the section of the proposed rule entitled "§ 98.2 Who must report?". EPA also provides tables summarizing the threshold triggers in its Fact Sheet for the proposed rule's General Provisions, available at: http://www.epa.gov/climatechange/emissions/downloads09/generalprovisions.pdf. Reporting will be once a year, except that facilities already required to report GHG emissions more often, such as those reporting GHGs pursuant to the Acid Rain Program, will continue reporting under those other programs, as well as submit annual GHG emission reports under the new rule. All reporting will be to a central EPA registry. For more information go to www.epa.gov/climatechange/emissions/ghgrulemaking.html. (By Gabriell Sigel & Jennifer L. Cassel - Jenner & Block - 9/09)
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