According to a press release issued by Cambridge Energy Research Associates (CERA), the US Environmental Protection Agency (EPA) has taken a major step in climate policy with the introduction of a mandatory greenhouse gas reporting proposal. The proposal, issued on March 10, 2009, is a “first-of-its-kind mandatory greenhouse gas (GHG) reporting program,” the press release said, representing the most expansive reporting program ever established by the EPA. It covers approximately 13,000 facilities and 85% to 90% of all US GHG emissions. “While the rule does not impose emissions reductions, its implications are nonetheless far-reaching,” said Robert LaCount, CERA head of climate change and clean energy research. “Industries will need to prepare for comprehensive GHG reporting requirements, reevaluate current climate change strategies, and assess the implications of a federal GHG cap that may now go forward on an accelerated schedule.” In some ways, the rule simplifies the challenges companies previously faced in reporting GHG emissions, according to LaCount. The rule sets forward a federal standard that will apply across all of a company’s facilities regardless of location. The primary difference between what exists now and what existed before, LaCount said, is that the new system is mandatory. The proposal calls for companies to begin collecting data on January 1, 2010, and to file the first annual report by March 31, 2011. CERA says this is a very aggressive implementation schedule, especially considering that the EPA will be hard pressed to finalize the rule by the end of this year. “Companies will need to plan ahead for the upcoming requirements in order to have new emissions management procedures operational by January 2010 to measure, verify, and report emissions from an extensive list of sources, including stack emissions, fugitive emissions, and vehicle fleets,” LaCount said. CERA believes that when the new rule is implemented, it will enable unprecedented visibility of GHG emissions for the US economy and for specific sectors and companies. “To put this in perspective,” LaCount said, “the reporting system for the European Union’s (EU) Emissions Trading Scheme currently covers approximately 40% of EU GHG emissions. To achieve this high level of coverage, the reporting requirements go beyond direct sources of emissions such as smoke stacks and fugitive emissions from industrial activity. For the first time, suppliers of coal, natural gas, and petroleum products into the US will need to report the carbon content of these products, and manufacturers of new motor vehicles and engines sold in the US will need to report the emissions rates for these products. Not only will this detailed information support the development of a future federal cap on emissions, but companies should prepare for greater scrutiny of their emissions profiles.” The EPA reportedly will make this data available through a variety of publicly accessible sources including the agency’s Website. “One of the stated goals of this rule is to help inform future climate change policy decisions,” LaCount said. “This explicit goal may not be achieved since US policy decisions could precede the first release of data anticipated in March 2011, but nonetheless, the rule is poised to influence future policy. First, the adoption of reporting rules that address a full range of economic activity, including the marketing of fossil fuels, could help build support for and demonstrate the viability of an economy-wide cap-and-trade program that extends beyond industrial facilities and power plants that have been traditionally regulated under these programs. And second, final measurement, verification and reporting protocols could help expedite the implementation of a federal cap-and-trade system. This rule will take close to two years to be developed, proposed, and finally adopted.”
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