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March 17, 2009 |
Schiff Hardin Environmental Update Owners of Large Commercial and Residential Buildings may be Required to Report Annual Greenhouse Gas Emissions under New U.S. EPA Proposed Rule On March 10, 2009, the U.S. Environmental Protection Agency (EPA) released1 a draft regulation for a national mandatory greenhouse gas (GHG) reporting program2. Large commercial and residential buildings may be subject to the proposed rule, and owners and operators should evaluate whether the proposal applies to them. The establishment of a national uniform GHG reporting program is the necessary first step toward a federal climate change mitigation policy. The proposed rule mandates the reporting of GHG emissions from buildings that have stationary fuel combustion equipment, such as furnaces and boilers, if the combined maximum-rated heat input of all stationary fuel combustion equipment located within the building is determined to be in excess of 30 million British thermal units per hour (mmBtu/hr) and the equipment emits greater than or equal to 25,000 metric tons of greenhouse gases per year. The actual scope of affected commercial and residential buildings is unknown at this time. As a guide and not by way of limitation, Schiff Hardin notes that buildings of about 1.5 million square feet quite possibly have furnaces or boilers, or a combination, that meet the threshold heat input of 30 mmBtu/hr. However, the location, use of combustion sources for heating or cooling, unit efficiency, air exchange in the building and many other factors will affect whether the threshold for reporting is met. The proposed rule covers the accepted international suite of GHGs: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorochemicals (PFCs), and other fluorinated gases. These gases are often expressed in metric tons of carbon dioxide equivalent (CO2e). Annual emission reporting is proposed to begin on March 31, 2011 for data collected during the 2010 calendar year. GHG emissions are measured either directly or via source-specific calculation methods. At this time, EPA is not requiring entities to report their electricity purchases or indirect emissions from electricity consumption. For buildings that meet or exceed the 30 mmBtu/hr heat input and the 25,000 metric tons of CO2e per year thresholds, the proposed rule requires annual reporting of the CO2, CH4, and N2O emissions from the stationary combustion equipment (e.g., boilers and furnaces). The proposed rule allows regulated entities to use relatively simplified emissions calculation methods that use a specified emission factor multiplied by the annual fuel use and a default heating value for that fuel. An initial screening for applicability can be performed using utility invoices. EPA's proposed GHG reporting rule is open for public comment for 60 days from the date of its Federal Register publication. Two public hearings are scheduled for April 6-7, 2009 in Arlington, Virginia, and April 16, 2009 in Sacramento, California. Schiff Hardin LLP can assist in reviewing the proposed rule and its impact on your business and can assist in providing comments to the EPA on this proposed rule. Schiff Hardin can also provide general background on climate change, GHG emissions and reduction strategies, energy efficiency projects, renewable energy assistance, and regulatory developments as your business responds to changes in statutory and regulatory requirements. Please contact Jane E. Montgomery, Joshua R. More, or David M. Loring.RECENT ENVIRONMENTAL PUBLICATIONS "New National Mandatory Greenhouse Gas Reporting Rule Proposed by U.S. EPA: All Sectors of the Economy Impacted," Environmental Update (March 13, 2009) ABOUT SCHIFF HARDIN LLP Schiff Hardin's diverse environmental practice advises clients engaged in a wide variety of industries and commercial endeavors such as electric generation, natural gas distribution and production, chemical manufacturing, auto and auto parts manufacturing, consumer goods manufacturing, real estate development and investments by financial institutions and equity investors. For more information, contact us. 1 The EPA released a pre-Federal Register publication on its Web site. The official Federal Register publication date is expected before the end of March 2009 and will be the date from which the 60-day public comment period begins. 2 The EPA Web site contains the text of the preamble and the proposed rule as well as many helpful source-specific fact sheets.
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