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Schiff Hardin Environmental Update:
California Mandatory Reporting Requirements for Greenhouse Gases

The California Air Resources Board ("CARB") has adopted a regulation that implements a state mandate to report greenhouse gas ("GHG") emissions by certain industrial facilities (PDF). Effective December 2, 2008, the new regulation requires GHG emissions reports for 2008, based on best available data and methods, to be submitted in 2009, and full compliance with the reporting requirements for all subsequent reporting years, as explained below.

Other states are considering adopting the California reporting protocols or similar reporting protocols. These include Oregon, Washington, New Mexico, Arizona, Montana and Utah.

Some commentators believe that Congress will watch closely the implementation of the California reporting program to determine how a national program will work. Whether the U.S. Environmental Protection Agency will accept a system established by a state as a model and a platform for national reporting will be one of many state/federal power struggles to watch as the new administration takes charge.

Facilities Subject to Mandatory Reporting Requirements

The adopted regulation requires GHG reporting by facilities located in California in eight categories:

1)	cement plants;
2)	petroleum refineries that emit greater than or equal to 25,000 metric tonnes of CO2 in any calendar year after 2007 from the combination of stationary combustion and process sources;
3)	hydrogen plants that emit greater than or equal to 25,000 metric tonnes of CO2 in any calendar year after 2007 from the combination of stationary combustion sources and hydrogen production processes;
4)	electric generating facilities that individually have a nameplate generating capacity greater than or equal to 1 megawatt, and that emit greater than or equal to 2,500 metric tonnes of CO2 in any calendar year after 2007 from electricity generating activities, including hybrid generating facilities;
5)	retail electricity providers;
6)	electricity marketers;
7)	cogeneration facilities that are located in California or operated by a retail provider that individually have a nameplate generating capacity greater than or equal to 1 megawatt, and that emit greater than or equal to 2,500 metric tonnes of CO2 in any calendar year after 2007 from electricity generating activities; and
8)	other facilities in California that emit greater than or equal to 25,000 metric tonnes per year of CO2 from stationary combustion sources in any calendar year after 2007.

Reporting Requirements

Facilities subject to the regulation must report all GHG emissions, including total emissions, process emissions, stationary combustion emissions, fugitive emissions and emissions from indirect energy usage. Existing facilities that were operational as of January 1, 2008 must submit the required emissions data to CARB in 2009 and each subsequent calendar year. The due date for such submissions is determined by facility type as follows:

April 1:
General stationary combustion facilities, excluding oil and gas facilities with a NAICS code of 211111, as well as electricity generating facilities and cogeneration facilities not under the operational control of any of the following: a retail provider, cement plant operator, petroleum refinery operator, hydrogen plant operator or operator of an oil and gas facility with a NAICS code of 211111.

June 1:
Retail providers, marketers, general stationary combustion facilities within the oil and gas sector with a NAICS code of 211111, cement plants, petroleum refineries and hydrogen plants.

Unlike emissions data for 2009 and subsequent years, which are required to be calculated in accordance with the protocol set forth in the regulation, emissions data reported for the 2008 calendar year (due either April 1 or June 1, 2009) may be based on best available data and methods, which is a less onerous protocol. "Best available data and methods" means CARB methods for emissions calculations set forth in the regulation where reasonably feasible; or facility fuel use and other facility process data used in conjunction with CARB-provided emission factors and other data; or other generally accepted methods for calculating greenhouse gas emissions.

CARB has posted an online "Instructional Guidance for Operators," providing sector-specific instructions for GHG reporting.

RECENT ENVIRONMENTAL PUBLICATIONS

"State of North Carolina v. EPA," Environmental Update (December 24, 2008)
"USEPA Steps Up Enforcement of Storm Water Management Plans at Construction Sites," Environmental Update (June 27, 2008)

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.