EPA Proposes Greenhouse Gas Reporting Rule

A new rule proposed by the US Environmental Protection Agency will require just over 13,000 facilities accounting for nearly 90% of US greenhouse gas emissions to report their greenhouse gas emissions. The plan would require companies in a broad range of industries that emit at least 25,000 metric tons of CO2e per year to report their emissions.

The EPA is proposing that companies report emissions on a facility level, and then aggregate the information into a corporate profile. In this way, the information can be easily broken back down into facility-level data so that the emissions can be analyzed in greater detail.

While the plan would cover nearly 90% of GHG emissions in the US, the reporting threshold of 25,000 metric tons of CO2e means that small businesses will be largely unaffected by the regulation change. According to EPA Administrator Lisa P. Jackson, “This is a critical step toward helping us better protect our health and environment – all without placing an onerous burden on our nation’s small businesses.”

EPA estimates place the cost of compliance to private sector industry at $160 million in the first year. The cost in the second year is estimated to fall to $127 million as companies establish their reporting framework.

“This is an important foundation step toward regulating greenhouse gases and reducing them,” said David Doniger of the Natural Resources Defense Council. The proposed rule means that many companies will begin actively measuring and reporting GHG emissions for the first time.

First time reporters would be required to report their emissions annually, and the first reporting period would be the calendar year 2010. The emissions data would be self-certified by the reporting entity and then the EPA will verify the data to ensure quality and accuracy.

Companies that take a proactive approach to measuring and managing emissions are likely to find that they can reduce costs by cutting wasteful processes. The new rule may be a sort of forceful ushering of companies into discovering the financial benefits of energy and resource efficiency.

The first time reporters will need a framework in which they can organize their data collection and plans of action. For the proposed regulation to encourage emissions reductions rather than acting as merely a tally of a company’s CO2 footprint, companies will need a framework that allows them to easily report, analyze, and track emissions.

The proposal is a step toward the Obama administration’s goal of a cap-and-trade carbon emissions program, and it is a certainly welcome initiative for those who wish to see business reduce its impact on the environment.

For more information on the proposal: http://www.epa.gov/climatechange/emissions/ghgrulemaking.html