Greenhouse Gas Reporting Rules Proposed by EPA

On March 10, 2009, EPA released its long-awaited proposed rule requiring reporting of greenhouse gas (“GHG”) emissions from sources representing approximately 85 to 90 percent of the greenhouse gas emissions in the United States. The proposed rule was, required by the 2008 Consolidated Appropriations Act, signed by President Bush on December 7, 2007. The Act requires EPA to promulgate within 18 months “a final rule . . . to require mandatory reporting of GHG emissions above appropriate thresholds in all sectors of the economy of the United States.” The statute required a proposed rule within nine months, or September 7, 2008, a deadline which EPA obviously missed. The statutory deadline for the final rule is June 7, 2009.

The reporting rule is widely viewed as a major building block in a federal mandatory GHG regulatory program. The proposed rule, which consists of a 1410-page pre-proposal version, would require suppliers of fossil fuels or industrial GHGs, vehicle and engine manufacturers, and facilities that emit in excess of 25,000 metric tons per year of CO2-equivalent GHGs to submit annual reports to EPA. The first annual report would be submitted to EPA in 2011 for calendar year 2010, except for vehicle manufacturers, which would begin reporting for model year 2011.

The reporting methods in the proposed rule are based on existing reporting programs and protocols, including the Department of Energy § 1605b voluntary reporting program; EPA’s Acid Rain Program; various state and regional reporting programs such as The Climate Registry, The Regional Greenhouse Gas Initiative; various nongovernmental organization protocols, including those developed by the World Resource Institute/World Business Council for Sustainable Development; programs developed by industry associations such as the American Petroleum Institute and the Cement Sustainability Initiative; and international reporting programs, including those of the European Union’s Emissions Trading Scheme, the Intergovernmental Panel on Climate Change, and Environment Canada.

The proposed rule identifies forty source categories, with a subpart of the rule devoted to each category. The list of categories is not exclusive, and EPA’s intent is to require reporting from any source with over 25,000 metric tons per year of CO2 equivalent emissions, even if it is not covered by a source category.