Foster Swift Energy & Sustainability Update
September 29, 2009
In an effort to collect emissions data to inform future policy decisions, on September 22, 2009, the Environmental Protection Agency (EPA) finalized a rule mandating reporting of certain greenhouse gases (GHG) from large GHG sources in all sectors of the United States economy. The rule will apply to Michigan businesses and industries, and will require monitoring and reporting of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).
As of January 1, 2010, many facilities and suppliers must collect GHG data, and initial emissions reports of 2010 emissions are due March 31, 2011. For example, manufacturers of vehicles and engines outside of the light-duty sector must report carbon dioxide for model year 2011 and other GHGs in subsequent model years as part of existing EPA certification programs. According to EPA estimates, average private sector reporting costs will be $115 million in the first year, and $72 million per year thereafter.1
The rule does not require control of greenhouse gases, but only requires monitoring/reporting. The EPA estimates that 85 percent of the total United States GHG emissions (from approximately 10,000 facilities) are covered by this final rule.2
The reporting threshold is generally the emission of 25,000 metric tons or more of carbon dioxide equivalent per year. Reporting will typically be done at the facility level, but certain suppliers of fossil fuels and industrial gases, as well as manufacturers of vehicles and engines, will report at the corporate level. The EPA estimates that most small businesses will fall below the 25,000 metric ton threshold and thus would not be required to report GHG emissions. The EPA also suggests that the only regulated agricultural sources will be the approximately 100 manure management systems at livestock operations that meet or exceed the 25,000 metric threshold.
Michigan industries within the following source and supply categories (not an exhaustive list) which may be affected by the rule include:
- stationary fuel combustion sources like operations with boilers, manufacturers of motor vehicle parts and accessories, educational services, and lumber and wood manufacturers;
- mobile sources, like manufacturers of heavy-duty, non-road, aircraft, locomotive, and marine diesel engines; manufacturers of heavy duty vehicles; manufacturers of small non-road, and marine spark-ignition engines, and manufacturers of personal watercraft and motorcycles;
- electricity generation;
- cement production;
- ferroalloy production;
- glass production;
- hydrogen, iron, steel, lead, lime, and nitric acid production;
- petrochemical production;
- petroleum refineries;
- pulp and paper production;
- silicon carbide production;
- manure management of animal production facilities and farms like beef cattle feedlots and poultry farms; and
- suppliers of coal based liquid fuels, petroleum products, natural gas products, and industrial GHGs.
Electronics manufacturing, ethanol production, fluorinated GHG production, food processing, industrial landfills, magnesium production, oil and natural gas systems, sulfur hexafluoride from electrical equipment, underground coal mines, wastewater treatment, and coal suppliers are not required to report at this time.
The applicability of this rule is to be determined on a case-by-case basis, as the reporting requirements vary based upon the nature of the reporting business/operation. Regulated entities must comply with recordkeeping, monitoring, and reporting requirements or face EPA enforcement. Facilities and suppliers may eventually be able to discontinue annual GHG reporting after reporting below a certain number of metric tons for a certain number of years.
For more information about the rule and how it may affect you or your business, please contact a member of Foster Swift's Energy and Sustainability Team.
1 EPA Mandatory Reporting of Greenhouse Gases Fact Sheet