In an earlier blog post, I reported the the USEPA had published a Proposed Rule that would require certain companies to report the amount of greenhouse gases (GHG) they emit. On October 30, 2009, the USEPA published its final rule, prepared after public notice and comment of the Proposed Rule. This Rule, called "Mandatory Reporting of Greenhouse Gases," becomes effective on December 29, 2009.
According to USEPA, one major benefit of requiring the reporting of GHG emissions was the ability to generate economy-wide data to support future policy decisions on global climate change policy. This data will identify on a facility-specific and industry-specific nature where GHG are generated throughout the American economy. Policymakers will be able to identify which industries would be affected by future legislation and regulation of GHG emissions and where regulation would do the most good in reducing GHG emissions. The Rule also recognizes that many states already have requirements for establishing GHG inventories for industries operating within their borders.
The Rule requires GHG emissions reporting from a wide variety of industries, including the following: electric generation facilities, aluminum production facilities, cement production facilities, petroleum refineries, certain municipal solid waste landfills, and certain manure management systems. The Rule also requires that suppliers report GHG emissions of certain products including coal-based liquid fuels, petroleum products, natural gas, and carbon dioxide.
Affected facilities must begin collecting GHG emission data on January 1, 2010, with a report to be generated for the year 2010 on March 31, 2011. Reports must be then generated annually every March 31 for the previous year's GHG emission figures. There are provisions for ceasing reporting if certain parameters are met and demonstrated to USEPA.
USEPA recognizes that this Rule may be confusing and companies that will be subject to its provisions may not be aware whether and how it may affect them. USEPA will be preparing outreach and education efforts to assist affected industries. However, if companies that are required to report their GHG emissions under the Rule fail to do so or otherwise violate the Rule (like falsifying records), they will be subject to the enforcement provisions of the Clean Air Act. These include administrative, civil and criminal penalties. USEPA may sue to compel compliance or for civil and administrative penalties of $37,500 per day, per violation, so non-compliance can become very expensive, very quickly.
The Federal Register notice of the Final Rule is 216 pages long and contains complete and exhaustive responses to the large number of public comments received since USEPA posted the Proposed Rule. How the Rule will be interpreted and who exactly will need to comply can be gleaned from the Final Rule itself and USEPA's responses to the public comments. The breadth and scope of reporting requirements is quite broad and it is important for companies to review this Final Rule with its plant operations personnel, its consultants and counsel to determine whether it applies to their operations and how to prepare for the reporting obligations that are set to start in two months.