On March 10, the U.S. Environmental Protection Agency (EPA) released the text of a proposed rule that, for the first time, would establish comprehensive economy-wide annual reporting requirements from 2010 onward for parties that either emit greenhouse gases (GHGs) or produce or import fossil fuels or industrial GHGs (such as fluorocarbons). The proposed reports would cover carbon dioxide (CO2) as well as methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorochemicals (PFCs), and other fluorinated gases.

The new reports required by EPA would generally apply to facilities that emit 25,000 metric tons or more of GHG per year (based on the CO2 equivalent) but would also apply, regardless of annual emissions, to many other parties including electronics and vehicle manufacturers, and petrochemical refiners. Upstream suppliers and importers of fossil fuels or industrial GHG would also be subject to a volume-based reporting requirement. Vehicle and engine manufacturers would face reporting requirements designed to gather emissions data relating to mobile sources. Reporting would generally be required at the facility level, except for vehicle and engine manufacturers, fossil fuel importers and exporters, and local gas distribution companies, which would report at the corporate level.

The proposed rule contemplates an annual reporting requirement, with the first report covering 2010 emissions due in March 2011. (Reports from vehicle and engine manufacturers, however, would only begin with the 2011 model year.) Any reporting obligations imposed by the proposed rule would be in addition to other mandatory programs, such as the Clean Air Act’s Acid Rain Program, which already requires quarterly reporting of CO2 and other emissions by certain fossil fuel-based generators of electricity.

After the proposed rule is published in the Federal Register later this month, a 60-day public comment period will begin. The EPA has also scheduled two public hearings on the proposed rule in April. The 2008 federal appropriations bill, which directed EPA to promulgate a GHG reporting requirement, established a statutory deadline of June 26, 2009, for the release of a final GHG reporting rule.

Please contact Vinson & Elkins lawyer Larry Nettles for more information, or if you may be interested in submitting public comments on the proposed rule. To learn more about V&E’s Environmental or Climate Change practices, visit our website.