Separately (but related), the EPA is still accepting comments on its “Regulating Greenhouse Gas Emissions under the Clean Air Act” proposed rulemaking published in July 2008.  Technically, the two rules are not connected, but information gathered under the proposed Reporting Rule would be used to assist in the possible EPA regulation of GHG emissions.

In developing the draft Reporting Rule, the EPA has had extensive discussions with industry participants and stakeholders to try and determine the most effective and least costly means to quantify GHG emissions.  The EPA chose a threshold of 25,000 MT CO2e to cover approximately 85-90% of US emissions, while excluding smaller facilities and sources.  There are some exceptions to this level and are defined within the document.

EPA Proposed GHG Reporting Facilities

The EPA estimates that ~30,000 facilities will need to assess whether they will need to report and of this amount, 13,000 will be above the emissions threshold.  The following chart defines the specific industries and the # of facilities that will need to be covered (above threshold).  The chart also shows the contribution of these different industries to total emissions (red line).  The largest single emissions contributor is the electric generation industry, while the stationary fuel combustion sector has the most reporting sites (~3,000), but contributes only 5.7% of the total of 3,900 million metric tons.

The EPA also recognizes that some of the industry categories below will result in double counting, but believes this is important in order to track the flow of carbon through the economy.

The EPA has selected a monitoring approach that combines direct measurement (CEMS) and other (defined) facility specific calculations.  Note that this methodology is consistent with approaches in California and other programs.

For companies who do not comply with the proposed rules, the CAA allows the EPA multiple levels of enforcement including administrative, civil and criminal penalties.  Failure to comply can be as a result of failure to report, collect data, continuously monitor, keep records, estimate in accordance with rules and/or falsification of records.

It is clear that the EPA has ample authority to proceed with requiring the reporting of emissions and many believe to ultimately regulate GHG emissions.  Regardless, it will be necessary for emissions to be more precisely monitored and reported whether enforcement of GHG levels is through EPA regulation or through some form of cap & trade or carbon tax.