EPA Prepares to Release Greenhouse Gas Reporting Rule

November 9, 2008
by BRYAN FRANEY
Client Alert Newsletter November 2008

Under the Consolidated Appropriations Act of 2008 ("Appropriations Act"), the U.S. Environmental Protection Agency ("EPA") was required to publish, by September 26, a proposed rule mandating the "reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the economy of the United States." However, as of the date of publication, EPA has not yet published a proposed rule. The Appropriations Act requires that EPA issue a final rule by June 26, 2009.

Currently, there is no mandatory system at the federal level for comprehensive reporting of greenhouse gas ("GHG") emissions. EPA administers a voluntary GHG emissions reporting system under the Climate Leaders program and the Department of Energy administers similar voluntary programs under the Climate VISION program and the Section 1605(b) program. The GHG reporting rule is expected to build from these voluntary programs, and from regional and state-level programs—both mandatory (e.g., California) and voluntary (e.g., the Climate Registry and Regional Greenhouse Gas Initiative), corporate programs and industrial protocols. The Appropriations Act grants broad discretion to EPA to determine the frequency of reporting, the threshold for reporting and the method of measuring and reporting.

The Appropriations Act does not specify which GHGs must be addressed by EPA's rulemaking, however, the rule is expected to cover the emissions of carbon dioxide, methane, nitrogen dioxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. When proposed, the GHG reporting rule must require reporting of emissions resulting from "upstream production and downstream sources." "Upstream production" sources could include fossil fuel and chemical producers. "Downstream sources" could include both large and small emitters from the industrial, commercial, agricultural, and transportation sectors. When proposed, the rule has the potential to affect tens of thousands of emission sources.