Recent action by the US EPA to finalize the Mandatory Reporting of Greenhouse Gases (GHG) Rule means that environmental managers must now seriously examine whether they are fully prepared to address the imminent requirements. This article provides some assistance by summarizing key points regarding the final versus proposed rule, providing clarification on key questions that have arisen since the rule was proposed, and recommending action items that should be completed now to help ensure compliance.
Mandatory Reporting of Greenhouse Gases Rule Passed
On September 22, the EPA Administrator signed the final Mandatory Reporting of Greenhouse Gases Rule. Although there had been some discussion about EPA potentially delaying the reporting of GHG emissions for one year, EPA did not revise the reporting schedule in the final rule. The final rule requires annual reporting, with the first reports due on March 31, 2011 for calendar year 2010 emissions. This means that monitoring, reporting and recordkeeping activities must begin on January 1, 2010 at subject facilities.
The final GHG reporting rule contains some slightly modified requirements compared to the proposed rule. Most notably, the final rule excludes several sectors from reporting at this time, including the following:
- Electronics manufacturing
- Oil and natural gas systems
- Ethanol production
- SF6 from electrical equipment
- Fluorinated GHG production
- Underground coal mines
- Food processing
- Wastewater treatment
- Industrial landfills
- Suppliers of coal
- Magnesium production
In addition, similar to the flexibility allowed under the California Air Resources Board (ARB) AB 32 GHG reporting requirements, EPA will allow facilities to exit the reporting program if they invest in reducing GHG emissions, as follows:
- Cease reporting after 5 consecutive years of emissions below 25,000 metric tons CO2e/year
- Cease reporting after 3 consecutive years of emissions below 15,000 metric tons CO2e/year
- Cease reporting if the GHG-emitting processes or operations are shut down
Other significant revisions and clarifications to the rule include the following:
Emissions Calculations: The use of the Tier 2 calculation method for CO2 emissions was expanded to include units greater than 250 MMBtu/hr that combust only pipeline natural gas and/or distillate oil.
Exemptions: EPA added exemptions for unconventional fuels, flares, hazardous wastes, and emergency equipment.
Aggregation: More facilities will be able to report aggregate emissions from smaller units rather than report emissions for each individual unit. The proposed rule limited the aggregation of any one group to a combined maximum capacity of 250 <MMBtu/hour heat input. The final rule allows grouping of any units that individually are less than 250 MMBtu/hour heat input.
Fuel Sampling: The fuel sampling frequency for Tiers 2 and 3 was reduced for fuels that are homogeneous or delivered in shipments or lots. Averaging of fuel sampling results is also permitted in certain circumstances. Finally, fuel sampling (as provided by the fuel supplier) as well as the use of fuel billing records to quantify fuel consumption is permissible.
Missing Data: The final rule provides additional clarification and flexibility regarding missing heating value, carbon content, and molecular weight data.
Monitoring: EPA added a provision to allow use of best available monitoring methods in lieu of required monitoring methods for January - March 2010; extensions for this flexibility beyond March 2010 will be considered but will not be granted after 2010. EPA also added monitoring provisions that allow engineering calculation estimates to preclude the need for new monitor installation.
Verification: To better allow EPA to verify reported emissions, more data must be reported rather than kept as facility records.
Electricity Indirect Emissions: Both the proposed and final rules do not require submittal of emissions or usage data regarding electricity purchased.
The final rule will go through a congressional 60-day review period because it is a major rule and must comply with Congressional Review Act (CRA). During this review period, the major rule will be suspended and Congress will either allow the rule to take effect or provide recommendations. There is a chance that passage of the final rule could be challenged, but that would take both houses of Congress to pass a Joint Resolution of Disapproval which must then be signed by the President. If the President vetoes the Resolution, Congress would then have 30 session days to override the rule and prevent it from becoming effective. This is an unlikely scenario given that the final rule stemmed from the congressional Consolidated Appropriations Act.
Q&A Related to the Mandatory Reporting of Greenhouse Gases Rule
As with most Clean Air Act regulations, questions have inevitably arisen on the Mandatory Reporting of Greenhouse Gases Rule concerning key applicability provisions – specifically, the universe of equipment at affected facilities that may be subject and the emissions calculation methodologies that should be applied. Trinity has an in-depth understanding of the questions that many industry sectors have raised on various portions of the rule. Since the proposed GHG reporting rule appeared in the Federal Register in early April, Trinity has provided training to nearly 1,000 environmental professionals on all aspects of the rule in a series of webinars and workshops. Based on this interaction, we have observed some common themes in the questions that we have heard.
Question: If my facility is subject to a certain subpart of the rule, am I required to report my emissions from other subparts?
Answer: The short answer is that many facilities may very well need to report emissions from numerous source categories covered by multiple subparts in the rule. The extent to which a facility must address multiple subparts depends upon which criteria (from Subpart A - General Provisions) trigger rule applicability. Facilities are subject to the rule if they meet specific criteria under sections 98.2 (a)(1), 98.2(a)(2), 98.2(a)(3), or 98.2 of Subpart A. These “doorways” into the rule determine whether or not your facility will need to report emissions using methodologies specified in one or more of the source category subparts B through PP.
If your facility is subject to 98.2(a)(4) for suppliers of fuel and industrial GHG’s, then you must report the GHG emissions that cover all applicable products for which calculation methodologies are provided in subparts KK through PP. If your facility is subject due to exceeding 25,000 MT CO2e from combustion sources as specified in 98.2(a)(3), then you need only report emissions from stationary combustion sources, and you are not required to report under any other source category. If your facility is subject due to exceeding the 25,000 MT CO2e threshold specified in 98.2(a)(2), then you must report the GHG emissions from all source categories for which calculation methodologies are provided in subparts C through JJ. Lastly, if your facility meets one of the source category definitions listed in 98.2(a)(1), then you must report all sources in any source category for which calculation methodologies are provided in subparts C through JJ.
Question: What subparts should I be looking at when determining applicability if I’m subject to sections 98.2(a)(1) and 98.2(a)(2)?
Answer: As discussed above, facilities should first determine which “doorway” triggers rule applicability for their operations. Once a facility has determined that it is subject to the rule, subparts C through JJ should be thoroughly examined. That is, the source categories listed in 98.2(a)(1) and 98.2(a)(2) are an aggregated list of industry types that may have emissions from equipment covered under a number of subparts in the rule. For example, if you are responsible for a Glass Production facility, your facility would be subject to Subpart N, Glass Production. However, your facility may also be required to report emissions addressed under Subpart U, Miscellaneous Use of Carbonates. The only way to determine applicability is to examine each subpart and to determine if your facility meets its applicability definitions. Similarly, a facility subject to the Petrochemical provisions in Subpart X should also evaluate the possible reporting requirements addressed in Subpart C (Stationary Source Combustion) and Subpart D (Electric Generating Units).
Table 2 in the preamble to the rule provides a guide for a facility to consider which ancillary subparts to review, in addition to reviewing the main subpart which triggered applicability for that facility.
Question: What is considered a biogenic fuel?
Answer: Ethanol, animal waste used as fuel, biogas, and many other types of biogenic fuels must be reported if a facility exceeds the reporting threshold. Biogenic CO2 means carbon dioxide emissions generated as the result of biomass combustion from combustion units for which emission calculations are required. Biomass means non-fossilized and biodegradable organic material originating from plants, animals or microorganisms, including products, by-products, residues and waste from agriculture, forestry and related industries as well as the non-fossilized and biodegradable organic fractions of industrial and municipal wastes, including gases and liquids recovered from the decomposition of non-fossilized and biodegradable organic material.
It is important to note that emissions from the combustion of biogenic fuels from downstream emitters would not be included in the initial baseline emissions calculations – but if a facility exceeds the minimum threshold and combusts biogenic fuels – those emissions would be reportable. For the final rule, EPA decided not to apply the same approach to suppliers of CO2. The preamble to the final rule states that EPA has concluded that data on capture of biogenic CO2 would be useful and informative because biogenic CO2 can potentially be stored in geological sequestration sites, or displace fossil CO2 applications. Thus, a facility that captures CO2 from biomass and otherwise meets the applicability test is covered under 40 CFR Part 98, Subpart PP and is required to report all CO2 supplied along with the percentage of that supply that is biomass-based.
Question: Are emissions from “other” types of stationary combustion sources such as control devices, emergency generators, and flares required to be reported?
Answer: The final rule clarifies the applicability of several “other” types of stationary combustion sources. The final rule defines stationary combustion sources and specifies the types of stationary combustion equipment that are exempt under Subpart 98.30. Stationary fuel combustion sources are devices that combust solid, liquid, or gaseous fuel, generally for the purposes of producing electricity, generating steam, or providing useful heat or energy for industrial, commercial, or institutional use, or reducing the volume of waste by removing combustible matter. Stationary fuel combustion sources include, but are not limited to, boilers, simple and combined-cycle combustion turbines, engines, incinerators, and process heaters.
Sources that are exempt from the rule include:
- Portable equipment
- Emergency generators and emergency equipment
- Irrigation pumps at agricultural operations
- Flares, unless otherwise required by provisions of another subpart of 40 CFR Part 98
- Electricity generating units that are subject to Subpart D
- Units that combusts hazardous waste unless either of the following conditions apply:
- Continuous emission monitors (CEMS) are used to quantify CO2 mass emissions
- Any fuel listed in Table C-1 of the rule is also combusted in the unit
In addition, EPA has determined that units larger than 250 mmBtu/hour heat input that combust miscellaneous, non-traditional fuels such as refinery gas, process gas, vent gases, waste liquids, and others must report only if CEMS are used or if these fuels contribute 10 percent or more of the annual unit heat input to the unit. With this exclusion, EPA has concluded that devices such as thermal oxidizers, pollution control devices, fume incinerators, burnout furnaces, and other such equipment would report only GHG emissions from the firing of supplemental fossil fuels.
Question: Will my facility be required to install a CEMS?
Answer: The rule requires direct measurement of emissions from certain units that already are required to collect and report data using CEMS under other programs (e.g., ARP, NSPS, NESHAP, SIPs). In some cases, this may require upgrading existing CEMS that currently monitor criteria pollutants to also monitor CO2 or add a volumetric flow meter. For facilities with units that do not have CEMS installed, reporters may either install and operate CEMS to directly measure emissions or use facility-specific GHG calculation methods. The measurement and calculation methods for each source category are specified in each subpart. As policies and programs evolve and/or particular calculation or monitoring equipment improves, EPA will evaluate whether or not to update the methodologies in the rule. EPA has made changes to individual subparts of 40 CFR Part 98 to clarify when CEMS and CEMS upgrades are required and has made other changes to reduce the monitoring burden.
Sources that have all of the necessary CEMS installed and are certified by January1, 2010 must use Tier 4 in 2010. However, sources that need additional time to upgrade their CEMS can use a lower tier calculation methodology for 2010 and begin to use CEMS on January 1, 2011.
Question: How will existing GHG registries interact with the EPA rule?
Answer: Reporters may not provide data submitted to another registry in lieu of the EPA rule mechanisms. For example, at this time, EPA will not allow an organization to submit GHG emissions data to The Climate Registry (TCR) in lieu of reporting to the EPA using EPA’s reporting requirements. EPA has stated that it is developing an electronic reporting system, but it has not been released yet.
The rule preamble notes that EPA extensively reviewed existing mandatory and voluntary programs to ensure that, to the extent possible, similar methodologies could be used. Nevertheless, EPA developed a reporting rule that is focused on direct emissions and stationary sources, so there are some differences between EPA’s rule and existing GHG registries. While there are many similarities between EPA’s rule and other methodologies (e.g., IPCC, TCR), companies must follow the guidelines provided within the EPA rule and report emissions via the reporting system that EPA will develop.
Recommended Path Forward
Because EPA chose to maintain the schedule of initial required reporting in March 2011, based on 2010 monitoring data, prudent environmental managers have begun to establish their recordkeeping and reporting structure.
Trinity recommends several key steps to organizations for establishing a GHG Reporting Rule compliance structure:
- Analyze existing GHG inventory and determine whether the facility is subject (documenting non-applicability as appropriate)
- Compare existing GHG calculation methodologies versus requirements in the Rule
- Compare current monitoring and recordkeeping practices versus requirements in the Rule
- Develop a plan for closing the gap between existing methodologies/practices and the Rule requirements
- Understand and outline the element of he required Quality Assurance Performance Plan (QAPP)
With these steps completed, your facility will be well on the way toward sound compliance with the Reporting Rule and better positioned to address the GHG mitigation programs that may lie ahead. For assistance with determining applicability and complying with this significant new rule, contact Trinity at (404) 256-1919.