Tuesday, 10 March 2009

EPA proposes mandatory greenhouse gas reporting

The US Environmental Protection Agency (EPA) has proposed mandatory greenhouse gas (GHG) emissions reporting from large sources in the United States.

The idea is that suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines and facilities that emit 25,000 metric tons or more per year of greenhouse gases should submit annual emissions reports to the EPA. This isn't a proposal to control emissions, just that sources above a certain threshold level monitor and report emissi

EPA has come up with costs for the reporting based on estimates of the number of affected facilities and units in each source category and the associated processes that emit GHGs, with an allowance for measurements that are already being made.

The organisation estimates that 13,200 private sector companies will need to comply and that the total national annualised cost for the first year will be $168m - $134m for subsequent years. Of that, 95% will fall on the private sector and 5% on the public sector to administer the programme. The industries most effected will be oil and natural gas systems (21% of ongoing costs) and iron and steel manufacturing (11%).

Interestingly, the EPA also provides comparable costs for different CO2 emissions threshold levels. If the threshold was 100,000 metric tons then only around half the number of entities would need to report and the first year's cost would be just over $100m. On the other hand, if the threshold was 1,000 metric tons then 59,587 companies would be included at a cost of $426m.

Since no one can ever really get to grips with an effective GHG reduction programme unless they have a good handle on the size of the problem, the number of companies covered by legislation like this can only increase. It seems to me to be inevitable that emissions reports will be part of regular accounts reporting in the not-too-distant future, whether by legislation or just corporate convention. Either way, those software and services companies that make it an easy process will have a ready market.

There's lots of info on the proposal at the EPA web site.

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