[Federal Register: December 5, 2003 (Volume 68, Number 234)]
[Proposed Rules]
[Page 68203-68231]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05de03-31]
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Part V
Department of Energy
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10 CFR Part 300
General Guidelines for Voluntary Greenhouse Gas Reporting; Proposed
Rule
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DEPARTMENT OF ENERGY
10 CFR Part 300
RIN 1901-AB11
General Guidelines for Voluntary Greenhouse Gas Reporting
AGENCY: Office of Policy and International Affairs, U.S. Department of
Energy.
ACTION: Proposed rule and opportunity for public comment; proposed
revised guidelines.
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SUMMARY: Section 1605(b) of the Energy Policy Act of 1992 (EPACT), 42
U.S.C. 13385(b), directed the Department of Energy (DOE or Department)
to issue guidelines establishing a voluntary greenhouse gas reporting
program. The guidelines issued by the Department in 1994 to establish
the Voluntary Reporting of Greenhouse Gases Program were intentionally
flexible to encourage the broadest possible participation. On February
14, 2002, the President directed DOE, together with other involved
Federal agencies, to recommend reforms to enhance this voluntary
reporting program. The purposes of the proposed revised Guidelines are
to establish revised procedures and reporting requirements for filing
voluntary reports, and encourage corporations, government agencies,
non-profit organizations, households and other private and public
entities to submit annual reports of their total entity-wide greenhouse
gas emissions, net emission reductions, and carbon sequestration
activities that are complete, reliable and consistent. Public comments
on these proposed revised Guidelines are solicited and a public
workshop has been scheduled to encourage an open exchange of views on
this subject.
DATES: Interested persons should submit written e-mail or written
comments by February 3, 2004 to the addresses given below. You may
present oral views and data at a public workshop that will be held at
the Washington Plaza Hotel, 10 Thomas Circle, NW., Massachusetts Avenue
at 14th Street, Washington, DC 20005, on January 12, 2004, from 8 a.m.
to 5 p.m.
ADDRESSES: Send e-mail comments to: 1605bgeneralguidelines. comments@hq.doe.gov. Alternatively, written comments may be sent to:
Mark Friedrichs, PI-40; Office of Policy and International Affairs;
U.S. Department of Energy; Room 1E190, 1000 Independence Ave., SW.,
Washington, DC 20585. DOE will hold a public workshop at the following
address: Washington Plaza Hotel, 10 Thomas Circle, NW., Massachusetts
Avenue at 14th Street, Washington, DC 20005. You may review comments
received by DOE, the workshop transcript, and any other related
material at the following Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/
enhancingGHGregistry/ proposedguidelines/general guidelines.html. If
you lack access to the Internet, you may access this Web site by
visiting the DOE Freedom of Information Reading Room, 1000 Independence
Avenue, SW., Washington, DC. See Section III of the SUPPLEMENTARY
INFORMATION section of this notice for more information about public
participation in this proceeding.
FOR FURTHER INFORMATION CONTACT: Mark Friedrichs, PI-40, Office of
Policy and International Affairs, U.S. Department of Energy, 1000
Independence Ave., SW., Washington, DC 20585, or email: 1605bgeneralguidelines. comments@hq.doe.gov [Please indicate if your e-
mail is a request for information, rather than a public comment.]
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Background.
B. Process for Finalizing and Implementing Guidelines.
II. Discussion of Proposal and Requests for Comments
A. Overview.
B. Defining Reporting Entities.
C. Defining Entity Boundaries.
D. Emission Sources and Sinks Covered.
E. Entity-Wide Reporting of Emissions Inventories.
F. Entity-Wide Emission Reductions.
G. Guidelines for Small Emitters.
H. Emission Reduction Calculations.
1. Reductions in Emissions Intensity.
2. Absolute Reductions in Emissions.
3. Increased Carbon Storage.
4. Avoided Emissions.
5. Project Emission Reductions.
I. Recordkeeping, Report Certification, and Verification.
J. Starting to Report.
K. Report Acceptance.
L. Registration of Emission Reductions.
M. Sustaining Entity Reports of Emissions and Emission
Reductions.
N. EIA Database and Summary Reports.
O. Cross-cutting and Other Important Issues.
1. Entity-wide v. Sub-Entity or Project-Only Reporting.
2. Treatment of Certain Small Emissions.
3. Excluding the Effects of Changes in Output on Emissions.
4. Emissions and Reductions Associated With Electricity
Generation and Use.
5. Reporting and Registering Changes in Terrestrial Carbon
Stocks.
6. Recognizing Emission Offsets.
7. International Emission Reductions.
8. Relationship of Proposed Guidelines to Climate VISION,
Climate Leaders and Other Voluntary Programs To Reduce Greenhouse
Gas Emissions.
III. Opportunity for Public Comment
A. Written Comments.
B. Participation in Public Workshop.
IV. Regulatory Review and Procedural Requirements
A. Review Under Executive Order 12866.
B. Review Under the Regulatory Flexibility Act.
C. Review Under the Paperwork Reduction Act.
D. Review Under the National Environmental Policy Act.
E. Review Under Executive Order 13132.
F. Review Under the Treasury and General Government
Appropriations Act, 2001.
G. Review Under Executive Order 12988.
H. Review Under the Unfunded Mandates Reform Act of 1995.
I. Review Under the Treasury and General Government
Appropriations Act, 1999.
J. Review Under Executive Order 13211.
I. Introduction
A. Background
Section 1605(b) of the Energy Policy Act of 1992 (EPACT) directed
the Department of Energy, with the Energy Information Administration
(EIA), to establish a voluntary reporting program and database on
emissions of greenhouse gases, reductions of these gases, and carbon
sequestration activities (42 U.S.C. 13385(b)). Section 1605(b) required
that DOE's Guidelines provide for the ``accurate'' and ``voluntary''
reporting of information on: (1) Greenhouse gas emission levels for a
baseline period (1987-1990) and thereafter, annually; (2) greenhouse
gas emission reductions and carbon sequestration, regardless of the
specific method used to achieve them; (3) greenhouse gas emission
reductions achieved because of voluntary efforts, plant closings, or
state or federal requirements; and (4) the aggregate calculation of
greenhouse gas emissions by each reporting entity (42 U.S.C.
13385(b)(1)(A)-(D)). Section 1605(b) contemplates a program whereby
voluntary efforts to reduce greenhouse gas emissions can be recorded,
with the specific purpose that this record can be used ``by the
reporting entity to demonstrate achieved reductions of greenhouse
gases'' (42 U.S.C. 13385(b)(4)).
In 1994, after notice and public comment, DOE issued General
Guidelines and sector-specific guidelines that established the
Voluntary Reporting of Greenhouse Gases Program for recording
voluntarily submitted data and information on greenhouse gas emissions
and the
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results of actions to reduce, avoid or sequester greenhouse gas
emissions. The 1994 General Guidelines are appended to today's proposal
to provide information with regard to reports that were filed under
those Guidelines (The General Guidelines and supporting documents may
be accessed at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.eia.doe.gov/oiaf/1605/guidelines.html). The
Guidelines were intentionally flexible to encourage the broadest
possible participation. They permit participants to decide which
greenhouse gases to report, and allow for a range of reporting options,
including reporting of total emissions or emissions reductions or
reporting of just a single activity undertaken to reduce part of their
emissions. From its establishment in 1995 through the 2001 reporting
year, 365 entities, including utilities, manufacturers, coal mines,
landfill operators and others, have reported their greenhouse gas
emissions and/or their emission reductions to EIA.
On February 14, 2002, the President announced a series of programs
and initiatives to address the issue of global climate change,
including a greenhouse gas intensity reduction goal, energy technology
research programs, targeted tax incentives to advance the development
and adoption of new technologies, voluntary programs to promote actions
to reduce greenhouse gases, and international initiatives. In addition,
the President directed the Secretary of Energy, in consultation with
the Secretary of Commerce, the Secretary of Agriculture, and the
Administrator of the Environmental Protection Agency, to propose
improvements to the current Voluntary Reporting of Greenhouse Gases
Program required under section 1605(b) of EPACT. These improvements are
to enhance measurement accuracy, reliability, and verifiability,
working with and taking into account emerging domestic and
international approaches.
On May 6, 2002, DOE published a Notice of Inquiry soliciting public
comments on how best to improve the Voluntary Greenhouse Gas Reporting
Program (67 FR 30370). Written comments were received from electric
utilities, representatives of energy, manufacturing and agricultural
sectors, Federal and State legislators, State agencies, waste
management companies, and environmental and other non-profit research
and advocacy organizations.
On July 8, 2002, after considering public comments, the Secretaries
of Energy, Commerce and Agriculture, and the Administrator of the
Environmental Protection Agency provided the President with ten
recommendations on improvements to the Voluntary Greenhouse Gas
Reporting Program. The four agencies also outlined a public process for
developing specific revisions to the program Guidelines. Following are
the ten recommendations for improving the greenhouse gas reporting
program:
[sbull] Develop fair, objective and practical methods for reporting
baselines, reporting boundaries, calculating real results, and awarding
transferable credits for actions that lead to real reductions.
[sbull] Standardize widely accepted, transparent accounting
methods.
[sbull] Support independent verification of registry reports.
[sbull] Encourage reporters to report greenhouse gas intensity
(emissions per unit of output) as well as emissions or emissions
reductions.
[sbull] Encourage corporate or entity-wide reporting.
[sbull] Provide credits for actions to remove carbon dioxide from
the atmosphere as well as actions to reduce emissions.
[sbull] Develop a process for evaluating the extent to which past
reductions may qualify for credits.
[sbull] Assure the voluntary reporting program is an effective tool
for reaching the 18 percent goal.
[sbull] Factor in international strategies as well as State-level
efforts; and
[sbull] Minimize transaction costs for reporters and administrative
costs for the Government, where possible, without compromising the
foregoing recommendations.
DOE held public workshops in Washington, D.C., Chicago, San
Francisco and Houston during November and December of 2002 to receive
oral views and information from interested persons. In addition, the
U.S. Department of Agriculture sponsored two meetings in January 2003
to solicit input on the accounting rules and guidelines for reporting
greenhouse gas emissions in the forestry and agriculture sectors. These
workshops and meetings explored in greater depth many of the issues
raised in the Notice of Inquiry and addressed in the written comments.
The public comment covered a broad range of issues and views diverged
widely on some key issues. Generally, there was substantial support for
revising the current General Guidelines to enhance their utility and to
accomplish the President's climate change goals.
DOE today is proposing revised General Guidelines, and subsequently
will propose Technical Guidelines, that when effective will modify and
replace the guidelines for the Voluntary Reporting of Greenhouse Gases
issued by DOE in October 1994. The proposed revised General Guidelines
would continue to provide procedures for entities to report their
greenhouse gas emissions inventories and a wide range of actions they
have taken to reduce, avoid or sequester greenhouse gas emissions. In
addition, the proposal would enable entities that meet criteria
established by DOE to register such reductions in a database maintained
by the Energy Information Administration (EIA). The criteria
established by DOE will ensure that units of registered reductions will
be comparable with regard to the standards of accuracy, reliability and
verifiability. Registered reductions will be recorded in a publicly
accessible database.
The Secretary of Energy has approved issuance of this notice.
B. Process for Finalizing and Implementing Guidelines
After full consideration of the public comments received, DOE will
develop and issue final revised General Guidelines. In parallel, DOE
intends to propose Technical Guidelines that will, when finalized,
specify the methods and factors to be used in measuring and estimating
greenhouse gas emissions, emission reductions, and carbon
sequestration. Concurrently with development of the General and
Technical Guidelines, DOE's Energy Information Administration will,
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35),
solicit public comment on the reporting elements to be contained in the
reporting forms to be used under the revised program Guidelines. With
respect to the existing 1994 General Guidelines, DOE intends to publish
a Federal Register notice of termination on the same day that DOE
publishes the notice of final rulemaking setting forth the revised
guidelines under section 1605(b) of EPACT. Both the notice of
termination and the notice of final rulemaking will contain an
effective date, which will be the beginning of a future reporting
period.
II. Discussion of Proposal and Requests for Comments
The following section describes the proposed revised General
Guidelines, summarizes the rationale for the key elements of the
proposal and solicits public comments on a wide range of specific
issues.
A. Overview
The proposed revisions to the General Guidelines are designed to
enhance the measurement accuracy, reliability and verifiability of
information reported
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under the 1605(b) program and to contribute to the President's climate
change goals. The proposed revised Guidelines will continue to provide
considerable flexibility to entities that wish to report emissions or
emission reductions in the future, as they have in the past. In
addition, the revised Guidelines will provide a means for entities that
are able to meet additional requirements to register emission
reductions achieved after 2002. This registry will provide special
recognition to such emission reductions.
To register emission reductions, reporting entities with
substantial emissions (average annual emissions of over 10,000 tons of
carbon dioxide (CO2) equivalent) will need to provide an
inventory of their total emissions and calculate the net reductions
associated with entity-wide efforts to reduce emissions or sequester
carbon. Entities with average annual emissions of less than 10,000 tons
of CO2 equivalent (small emitters) would be eligible, under
certain conditions, to register emission reductions associated with
specific activities even without completing an entity-wide inventory or
reduction assessment.
The proposed revised Guidelines would enable and encourage entities
to report (but not register) emission reductions achieved prior to
2003. The revised Guidelines would also permit entities to report (but
not necessarily register) emission reductions associated with specific
actions or with specific parts of the entity, even if these reports
were not accompanied by entity-wide emissions and reductions reports.
The chief executive officer of the company or institution, an
agency head, head of household or other responsible official would be
required to certify that the reporting entity accurately followed the
revised Guidelines for determining emissions, emission reductions and
sequestration. Entities would be encouraged to obtain independent
verification of the accuracy of their reports, and their compliance
with DOE Guidelines.
For convenience, the basic elements of the proposed revised
guidelines are graphically represented in Figure 1. DOE solicits public
comments on this approach and any suggestions of alternative means of
achieving the objectives outlined above.
BILLING CODE 6450-01-P
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[GRAPHIC] [TIFF OMITTED] TP05DE03.000
BILLING CODE 6450-01-C
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B. Defining Reporting Entities
Under the proposed revised Guidelines, the first step in the
reporting process is the definition of the corporation, institution,
household or other entity that will be submitting reports. At a
minimum, entities would have to be legally distinct businesses,
institutions, organizations or households, although reporters would be
encouraged to define themselves at the highest meaningful level of
aggregation. The legal basis for determining whether an entity (or its
subparts) is distinct could be derived from any Federal, state or local
law (or regulation) governing the entity, including regulations
applicable to corporations, partnerships, cooperatives, government
agencies, non-profit organizations, households, or other entities. This
approach would permit a legally-distinct company, plant or activity to
define itself as an entity, even if it is partially-or wholly-owned by
another company. In such cases, any registered reductions would accrue
only to the reporting entity, rather than the parent company.
Given the flexibility inherent in this definition, some companies
and institutions could be all or part of a reporting entity at any one
of several different levels. For example, an individual electric power
generating plant might be owned by a partnership of several different
companies or individuals. One of these partners might be an electric
utility that owns and operates several other electric generating
plants, and a transmission and distribution system. And this utility
might, in turn, be owned by a regional holding company that also owns
other utilities, as well as other non-electric generating companies. In
this case, the reporting entity could be defined as the electric
generating plant, the utility or the holding company. The program
encourages reporting entities to report at the highest level of
meaningful financial and operational control, which in this case is
likely to be either the utility or the holding company. DOE solicits
comment on whether the proposed guidelines are likely to cause entities
to establish boundaries that reflect a higher level of corporate or
institutional aggregation, as is desired. DOE also solicits
recommendations on what additional provisions might preserve
flexibility in the establishment of boundaries while also preventing or
further discouraging the shifting of emissions to non-reporting parts
of the entity in order to create the appearance of net emission
reductions. Finally, DOE solicits comment on the desirability of more
prescriptive approaches to the definition of entities, such as a
requirement that entity definitions correspond to those used for
Federal tax purposes.
The Guidelines would require that the name chosen to represent the
entity generally correspond to the activity covered by the report. For
example, a large multi-product manufacturer should not use its
corporate name to report the emissions and emission reductions of just
one of its many subsidiaries. However, there may be instances when
some, but not all subsidiaries of a large corporation may want to
report as a single entity. One reason to report as a single entity
might be that certain subsidiaries have a common business activity,
while others do not. However, another reason might be that some
subsidiaries could demonstrate emission reductions, while others could
not. DOE solicits comments on how the Guidelines might provide the
flexibility needed by entities with special circumstances, while
discouraging abuses of this flexibility that could produce misleading
impressions of entity performance.
Another question concerns the possible role of trade associations
and other third parties as consolidators of entity-specific reports
into an aggregate report to DOE. While associations may report
information collectively for their memberships under the current
guidelines, this may have implications for the accuracy and
reliability--and transparency--of reports submitted under the revised
guidelines. Should trade associations and other third parties be
required to submit some or all of the entity-specific data that might
be required by the revised Guidelines? Should the CEOs, other senior
officials, or heads of entities be required to certify the accuracy of
their companies' reports when submitted to or through trade
associations? Should trade associations and other third parties be able
to ``register emission reductions'' or only file reports for the
record?
C. Defining Entity Boundaries
To report on an entity-wide basis and to register emissions
reductions, reporting entities would have to provide an ``entity
statement'' that meaningfully defines the operations and facilities
(such as office buildings or vehicle fleets) covered by their entity-
wide reports, and the greenhouse gas sources and sinks encompassed by
these operations and facilities. Such operations would include those
wholly owned and operated by the entity, and might include those
operations that are partially-owned, leased or operated by the entity.
Entities would be required to coordinate with other entities that
shared ownership of particular operations to ensure that no double
counting occurred. Entities would also have to ensure that each annual
report consistently used the boundaries identified in prior year
reports, unless an explicit description of any changes made and their
effects on emissions accompanied the report. In cases where an entity
undergoes a significant structural change, it may have to establish a
new base year for all or part of its operations, or, in the case of
acquisitions, recalculate its original baseline based on the prior year
emissions of the acquired plant.
D. Emission Sources and Sinks Covered
Reports would be able to cover any greenhouse gas or sink that is
consistent with the definitions established in the General Guidelines.
An entity-wide inventory would need to cover all significant
(determined by share of total emissions or absolute quantity of
emissions), anthropogenic greenhouse gas emission sources within the
entity's defined boundaries. Entity-wide reports must also cover all
significant emission sinks. Entity-wide reports must encompass, at
minimum, all six greenhouse gases specified in the Guidelines, whether
emitted directly by the entity's operations and facilities, or
indirectly in the generation of purchased electricity, steam or hot (or
chilled) water used by the entity. Indirect emissions other than those
specifically cited in the Guidelines may be reported separately, but
reductions associated with such other indirect emissions may not be
registered. Entities also may separately report, but not register,
emissions and emission reductions associated with other gases (e.g.
chlorofluorocarbons, black soot) that may have significant,
quantifiable climate forcing effects, provided that DOE's Technical
Guidelines specify the methods for measuring and reporting their
emissions. DOE is soliciting comment on criteria for identifying such
gases and on procedures for developing the necessary Technical
Guidelines. All DOE proposals to permit the reporting of additional
gases will be made available for public comment before being put into
effect. DOE solicits comment on this approach and on a possible
alternative that would permit participating entities to report (but not
register) the emissions and emission reductions associated with other
gases, even if DOE's Technical Guidelines did not specifically cover
such other gases.
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E. Entity-Wide Reporting of Emissions Inventories
To be eligible to register emission reductions, entities with
substantial emissions (an annual average in excess of 10,000 tons of
CO2 equivalent) would need to report annual entity-wide
inventories of their emissions and sequestration. Such inventories
would provide a basis for assessing the significance of reported
emission reductions relative to the entity's total emissions.
F. Entity-Wide Emission Reductions
To register emissions reductions, entities with average annual
emissions over 10,000 tons of CO2 equivalent would be
required to demonstrate, to the maximum extent practicable, that the
reported reductions represent an actual net decrease in entity-wide
emissions, as calculated using one or more of the methods allowed by
the General and Technical Guidelines. Some entities, such as
electricity generators, would be expected to calculate net emission
reductions for their entire entity (using one or more of the methods
described below and in the Technical Guidelines). Others, such as
multi-product manufacturers, may not be able to determine the net
emission reductions achieved by all elements of their entity using the
methods allowed by the Guidelines. These types of reporters could
report the net emission reductions for as much of their entity as was
practicable, in addition to reporting their entity-wide emission
inventories.
Example: A multi-product manufacturer has instituted company-
wide efforts to reduce emissions, but because its U.S. output is
growing rapidly, its absolute U.S emissions have not declined. By
using different calculation methods (intensity for many facilities
and absolute emissions for others, as well as some project-specific
calculations) it can quantify the emission reductions associated
with 90% of its total emissions. It would report its total emissions
and quantified emission reductions to DOE, and explain that it is
not practicable to quantify the emission reductions associated with
the remaining 10% of its operations because there are no year-to-
year measures of output for these operations (because they involved
the production of totally new products). In this case, the entity
could register its reported emission reductions, but the data
submitted in its report would clearly indicate that these reductions
were based on an assessment of just 90 percent of the entity's
emissions.
Net emission reductions achieved by third parties (offsets)
could be included in an entity's report and be registered as long as
the third party or other entity involved observed all of the rules
that would have applied had it chosen to report its net emission
reductions directly, and the entities involved have agreed that the
reporting entity can register the emission reductions identified
(see section II.O.5 below for additional discussion on the treatment
of offsets).
The proposed Guidelines indicate that the owner of the facility,
land or vehicle that generated the emission reductions or sequestration
is the entity presumed to have the right to report and register any
emission reductions or sequestration. For example, the owner of a wind
turbine that sells its power to the grid is presumed to have the right
to register such resulting emission reductions, even though this wind-
generated electricity might be purchased at a premium by a local
utility and, ultimately, resold at a premium rate to a local
manufacturer. This presumption can be altered, however, if there is a
written agreement between the entities involved to transfer this right.
G. Guidelines for Small Emitters
Entities with average annual emissions of less than 10,000 tons of
CO2 equivalent, such as many farms and forest operations,
small businesses and individuals, could report and register emission
reductions that have occurred during and after 2003 without submitting
the results of an entity-wide emissions inventory or an entity-wide
assessment of the annual changes in their emissions, avoided emissions
and sequestration. Entities reporting under this provision would be
required to determine the total annual emissions and sequestration
associated with the type of activities on which they choose to report,
the net emission changes associated with these specific activities, and
to certify that the changes reported were not caused by actions likely
to cause increases in emissions elsewhere within the entity's
operations. Small emitters would be required to use the same methods
for calculating emission reductions available to other reporters. DOE's
Technical Guidelines will provide a list of the types of activities
about which small emitters might report. It is expected that households
and many small businesses, farms, and forest operations would be exempt
from the requirement to submit entity-wide inventories. The use of a
multi-year average rate of emissions is intended to enable certain
small entities that have periodic spikes in their annual emissions (for
example, a land owner that periodically harvests trees) to qualify for
this exemption. Comments are specifically solicited on (1) whether
10,000 tons of CO2-equivalent emissions would be the
appropriate threshold quantity to achieve this objective, and (2) the
appropriate period of time over which small entities should be
permitted to average their annual emission rates. DOE is also
soliciting comments on whether these special rules for small emitters
are appropriate and how to ensure that reductions reported by small
emitters are not a result of shifting emissions to non-reporting parts
of the entity.
H. Emission Reduction Calculations
All reported and registered emission reductions would have to be
calculated using one of the methods identified below, together with the
procedures to be set forth in DOE's Technical Guidelines. The proposed
revised General Guidelines recommend the use of emission intensity
indicators as the basis for determining emission reductions, but would
permit the use of several other methods to calculate emission
reductions and sequestration as long as the method used excludes
reductions caused by reductions in output. Regardless of the method
used, a reporting entity would have to certify that none of the
reported emission reductions were: Double counted by the reporting
entity (or, to its knowledge, by any other reporting entity); or were
the result of shifts in operations or activity from one part of the
entity to another part of the entity, or to outside the boundaries of
the entity. Entities would be required to report each emission
reduction and sequestration calculation by type, indicate the types of
actions taken that resulted in the reported emission reduction, and
explain the selection of each indicator of output used. Comments are
invited on the appropriateness of each of the methods described below
and on the definitions provided in the proposed Guidelines. Additional
guidance on each of these methods will be provided in the Technical
Guidelines, including lists of possible output indicators, calculation
methods for determining reductions associated with agricultural,
forestry and geologic sequestration, methods and emission factors for
calculating avoided emissions, and project-based methods, among others.
1. Reductions in emissions intensity, as long as the reporting
entity demonstrates that the intensity metrics used are based on
measured (or estimated) emissions and measured indicators of output
that accurately represent the physical (or, in some cases, economic)
output associated with the covered emissions, and that acquisitions,
divestures or changes in products have not contributed significantly to
the reductions.
2. Absolute reductions in emissions, as long as the entity
demonstrates that these measured reductions were not caused by declines
in its U.S. output.
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3. Increased carbon storage (for actions within entity boundaries),
as long as the entity demonstrates the sequestration measured or
estimated represents a net increase in the quantity stored by the
entity and has not been re-released to the atmosphere (ongoing, annual
reports would be required).
4. Avoided emissions (for actions within entity boundaries that
reduce emissions outside entity boundaries) that reflect the indirect
emission reductions achieved as a result of a measured increase in the
net sales of energy generated by low-or no-emission technologies.
5. Project emission reductions (for actions taken to reduce direct
or indirect emissions within entity boundaries), as long as they
exclude any reductions that might have resulted from reduced output or
from shifting emissions to operations not included in the reported
projects, and are derived from measured performance data or by using
estimation methods consistent with DOE Technical Guidelines. In the
context of entity-wide reports, this last calculation method is
intended only for use when none of the other methods is practicable.
I. Recordkeeping, Report Certification, and Verification
Reporters under the existing program must certify the accuracy of
their reports, but are not required to maintain records. Under the
proposed revised Guidelines, the chief executive officer, agency head,
head of household or person responsible for the reporting entity's
compliance with environmental regulations would certify that reports
are complete, accurate and consistent with DOE guidelines, and that
sufficient records will be maintained for at least three years to
enable independent verification. Reporting entities are strongly
encouraged to obtain independent verification of their reports. The
proposed Guidelines describe what would constitute such verification,
including a description of the types of firms or institutions that
might be qualified to independently verify the entity's reports, and
the elements of an entity's records and reports that should be
verified.
The proposed General Guidelines would require reports to EIA that
are sufficiently detailed to enable EIA to review and confirm the final
emission reduction calculations for each method and output measure
utilized, and to review and confirm the rates of conversion used for
each category of greenhouse gas covered and for electricity-related use
or emissions avoidance, by region. EIA's review of the data submitted
would be intended to assure consistency with the requirements specified
in the General and Technical Guidelines. This level of reporting would
indicate the basic components of each entity's emission inventory and
of its entity-wide emission reductions. Entities would be required to
maintain more detailed records, sufficient to permit an independent
verification. The proposed levels of data reporting and recordkeeping
represent a middle ground between the views of stakeholders who favor
summary data and those stakeholders who prefer more detailed data that
would be the basis for independent verification.
The proposal limits the recordkeeping requirement to three years.
Of course, reporting entities may keep their records for a longer
period of time if they deem it in their interest to do so.
The proposed Guidelines would require that the chief executive
officer or other senior official of the reporting entity certify the
accuracy, consistency and completeness of all reports. In addition, the
Guidelines would encourage, but not require, independent verification
of all reports. The proposed Guidelines would provide only general
guidance on what DOE considers the necessary qualifications of
verifiers and the information that they must verify. This guidance is
intended to provide some assurance that such verifiers are independent
and appropriately qualified, while still giving entities considerable
flexibility in the selection of the type of firm most appropriate to
perform such an independent verification. DOE invites comments on
whether the general guidance provided is sufficient to achieve this
objective.
While some stakeholders believe that independent verification
should be required of all reports, many felt that independent
verification is only necessary if entities seek to sell their
registered emission reductions and, in such cases, private markets are
likely to specify the type of independent verification required. While
DOE received many comments that questioned the credibility of many of
the emission reductions reported under the existing program, most of
these concerns related to the methodology used to calculate the
reported reductions, rather than the validity of the data used or
reported. While DOE believes that requiring a senior officer to certify
reports will provide adequate assurance that the data reported are
reliable, the proposed Guidelines would strongly encourage reporters to
obtain independent verification. DOE solicits public comment on this
approach and on whether further consideration should be given to
requiring independent verification of emission reductions prior to
registration.
J. Starting To Report
Under the proposed revised Guidelines, entities would be permitted
to begin reporting their prior-year emissions and emission reductions
at any time. In general, the first full year for which an emissions
inventory is available would be considered the entity's base year,
although DOE would encourage entities to determine their base year by
calculating the average emissions or emissions intensity during a base
period of up to four years in length. This flexibility would permit a
reporter to select the base year or base period most representative of
actual operations. It may also, however, allow a reporter to select the
most advantageous base year or base period (i.e., a period that would
enable the reporter to register the greatest amount of reductions). DOE
solicits comments on whether this flexibility is appropriate and, if
not, what steps might be taken to limit this flexibility. To focus the
program on current and future efforts to reduce greenhouse gas
emissions, entities would be permitted to register only those emission
reductions calculated using a base year no earlier than 2002 (or base
period of up to four sequential years ending no earlier than 2002).
However, entities may still report emission inventories and reductions
for previous years, as long as any prior year emission reductions are
calculated using a base year no earlier than 1990 (or a base period no
earlier than 1987-1990). To be accepted as entity-wide reports under
the revised Guidelines, emission reductions already reported to the
1605(b) registry must be recast to fully comply with the revised
Guidelines.
K. Report Acceptance
Upon receipt, EIA would review all reports to ensure consistency
with the revised Guidelines. If EIA determines the report follows the
General and Technical Guidelines, and EIA's Reporting Form
Instructions, the report would be classified as either an entity-wide
report or otherwise, and accepted.
L. Registration of Emission Reductions
Accepted entity-wide reports and reports from small emitters would
then be further reviewed to determine if reductions were eligible to be
registered. Entity-wide reports and reports from small entities that
have used the methods identified in the General and Technical
Guidelines, as well as EIA's Reporting Form Instructions, to
[[Page 68211]]
demonstrate they have achieved emission reductions after 2002 and have
met all other applicable requirements would have the identified
reductions registered in the 1605(b) database under the name of
reporting entity and the year the reduction was achieved.
Registering only reductions that are achieved after 2002 would
focus the program on those reductions most likely to contribute to the
achievement of the President's goal for reducing U.S. emissions
intensity by 18% between 2002 and 2012. In addition, because all of the
data required to register reductions would be relatively recent, it
would help ensure that all entities have an equal opportunity to
register emission reductions under the new program. Nevertheless, the
revised Guidelines would continue to permit entities to report emission
reductions back to 1991, the earliest year permitted by the authorizing
statute, and reports that comply with the Guidelines would be made
publicly available by EIA. DOE solicits public comments on this
approach and any suggestions of alternative means of achieving the
objectives outlined above.
M. Sustaining Entity Reports of Emissions and Emission Reductions
To register emission reductions in any future year, an entity would
be required to submit ongoing annual reports that document the net,
cumulative emission reductions achieved relative to the entity's base
year (or base period). Only additions to cumulative emission reductions
(relative to the chosen base year or base period) would be recognized
in future years. This requirement would reduce the quantity of emission
reductions eligible for registration in future years if the reporting
entity experiences a net increase in output-adjusted emissions after
beginning to report. This approach would preserve the recognition given
to all previously registered emission reductions, even if an entity
experienced net emission increases in the future or stopped reporting.
DOE solicits comments on this approach and possible alternatives,
including those that might permit or require DOE to delete previously
registered emission reductions if an entity did not continue to submit
annual reports. Ongoing, annual reporting would be required to maintain
recognition for registered emission reductions resulting from
sequestration.
N. EIA Database and Summary Reports.
The EIA Administrator would establish a public database including
all data that meets the definitional, measurement, calculation and
certification requirements of the revised Guidelines. The database
would provide summary information on each reporting entity's greenhouse
gas emissions and its registered emission reductions, by year,
according to the categories described above. The database would also
provide access to all accepted reports.
O. Cross-Cutting and Other Important Issues
This section discusses various issues that affect more than one
provision of the proposed revised Guidelines or were not highlighted in
any of the preceding sections. DOE is seeking public comment on all of
these issues, and certain specific questions are posed.
1. Entity-Wide v. Sub-Entity or Project-Only Reporting
The proposed Guidelines would highlight the net contribution of
reporting entities to reducing greenhouse gas emissions, rather than
sub-entity reductions resulting from actions taken in only some parts
(rather than the whole) of the entity. This reflects the
Administration's interest in fostering broad efforts by corporations,
institutions and other entities to reduce their total emissions. Over
time, individual companies and other entities often take many actions
that either increase or decrease their emissions of greenhouse gases.
It is the net effect of all of these actions on an entity's emissions
that is the most important indicator of an entity's contribution to the
President's goal of reducing U.S. emissions intensity. Under the
revised Guidelines, most reporters would be able to register emission
reductions only if they could demonstrate they had achieved a net
reduction in their total emissions, relative to their physical or
economic output. Small emitters, such as households, and some farms,
forest operations, and small businesses, would be permitted to register
the reductions achieved in just one area of activity, such as building
operations or forestry, rather than accounting for all of their
emissions, so long as they certify that these reductions are not a
product of shifting emissions to non-reporting parts of the entity. In
addition, the proposed Guidelines would continue to provide a mechanism
for large emitters to report, but not register, the reductions
resulting from individual actions or projects affecting a part of the
entity's emissions, even if they could not demonstrate that they had
achieved a net reduction in their total emissions, relative to their
physical or economic output. DOE solicits comments on this approach and
on possible alternatives to this approach, including circumstances
under which project-based or sub-entity reductions might be registered
in the absence of net entity wide reductions.
2. Treatment of Certain Small Emissions
The proposed Guidelines would permit reporters to exclude certain
emissions that are comparatively small, as well as all non-
anthropogenic emissions. Specifically, an entity could exclude
emissions from multiple sources (and multiple gases) as long as the
total emissions excluded did not exceed 3% of its total emission
inventory or 10,000 tons of CO2 equivalent, whichever was
smaller. This exclusion is intended to enable entities to exclude
small, and possibly widely dispersed, emissions that are likely to be
especially costly to monitor and report, but which would have little
effect on the total emissions or emission reductions reported. However,
this approach has some potential drawbacks. For example, very large
emitters, such as large power generators or large energy intensive
industries applying this standard would have to account for a very high
percentage of their total emissions (in some cases over 99.9%).
Accounting for such a high percentage of total emissions could be
burdensome and would have little effect on the totals reported. Several
possible alternatives exist. One option might be to provide for uniform
percentage exclusion, such as permitting all entities to exclude up to
3 percent of their emissions. This could lead some large utilities or
industries to exclude large quantities of emissions that would be
relatively easy to include in their reports. Another possible
alternative is the addition of a minimum percentage exclusion, such as
1 percent. Still another alternative might be to permit firms to
exclude up to 3 percent or 10,000 tons of CO2 equivalent,
whichever is greater. DOE solicits comments on the approach proposed,
as well as various alternatives approaches.
3. Excluding the Effects of Changes in Output on Emissions
The proposed Guidelines would strongly encourage the use of
emissions intensity indicators as the basis for calculating emission
reductions and would require that any method used to calculate emission
reductions ensure that reductions caused by declines in the reporting
entity's output be excluded. This would require entities to develop
useful physical (and/or possibly economic) indicators of the output
associated with the emissions being assessed. For power generators
[[Page 68212]]
supplying electricity to the grid, the preferred measure of output is
clear: kilowatt hours. Certain large manufacturers also have well-
established measures of output that have already been widely used for
many years, such as tons of cement. But many product manufacturers may
have some difficulty identifying useful output indicators especially if
they desire to develop indicators that represent the output associated
with a large a number of different processes and products. Broad
physical units, such a pounds of product (sometimes used by chemical
manufacturers), often encompass a wide range of different products, and
a similarly wide range of production processes and product values. As a
result, some important shifts between processes or product types may
not be captured by such a broad indicator. As an alternative, some
entities might consider the use of economic indicators, although
analysis of some entity-level economic indicators suggests that they
may be significantly affected by changes in market conditions and may
serve as poor indicators of production-related changes by individual
entities. DOE intends to identify in the Technical Guidelines various
output indicators and provide guidance on the selection of appropriate
indicators. DOE may specify the use of particular indicators for
certain types of economic activity, but is likely to give most
reporters the flexibility to adopt the best indicators for their
particular circumstances. Given the potential deficiencies of some
output indicators, DOE invites public comment on what information
entities should be required to provide to justify the selection of
their output indicators and what criteria DOE should use to determine
whether a particular output measure is acceptable.
A related issue concerns entities that base their emission
reductions on changes in their ``absolute'' emissions. The proposed
Guidelines would require such entities to demonstrate that any reported
reductions were not associated with declines in the output associated
with those emissions. Because entities should only use this approach if
they could not develop an output indicator that would enable them to
track their emissions intensity, they may have difficulty demonstrating
that their output had not declined. Again, DOE is interested in
receiving comments on what output measures or other information such
entities should be required to provide to demonstrate that their output
has not declined and what criteria DOE might use to determine whether
the information provided was sufficient.
4. Emissions and Reductions Associated With Electricity Generation and
Use
Several key provisions of the Guidelines deal with how entities are
to report emissions and emission reductions associated with electricity
generation and use. Approximately 32 percent of total U.S. emissions of
greenhouse gases are released in the generation of electricity. As
there are substantial opportunities to reduce the emissions associated
with both the generation and use of electricity, it is important that
the program cover both electricity generators and consumers. In doing
so, however, it is also important to ensure: (1) That electricity-
related emissions and emission reductions are not double counted; (2)
that the conversion factors used to translate kilowatt hours into
emissions are accurate indicators of the actual emissions associated
with the generation of the electricity; and (3) that recognition for
reductions is given to those entities primarily responsible for those
reductions. Both these proposed General Guidelines and the Technical
Guidelines, to be proposed subsequently, will attempt to achieve these
objectives.
To avoid double counting, the proposed General Guidelines would
require users to distinguish between the ``indirect'' emissions
associated with electricity purchases (as well as purchased steam, and
chilled/hot water) and their direct emissions. This will enable entity-
level emission inventories to include such indirect emissions, while
permitting DOE to exclude such emissions from compilations of multiple
reports, if desired. In the Technical Guidelines, DOE will specify the
factors to be used to convert purchased electricity use to greenhouse
gas emissions. For the purposes of emission inventories, DOE is likely
to specify a factor based on the average emissions per kilowatt hour
for the region in which the electricity was consumed. However, for the
purpose of calculating emission reductions associated with reduced
electricity demand, DOE may specify an alternative factor, such as one
based on the emissions associated with regional electricity supplies at
the margin (largely excluding electricity generated by hydro, nuclear
power plants and some coal, which tend to be fully utilized, regardless
of changes in regional demand for power). These factors might change
annually and could be required to be used by all consumers of purchased
electric power, unless the reporter could demonstrate special
circumstances.
There may be two methods for determining emission reductions
associated with the generation of electricity. One method might be used
to calculate reductions in the emissions intensity of existing power
production (e.g., through fuel switching or increased efficiency) and
the other might be used to calculate the indirect reductions (or
avoided emissions) that result from increasing the electric power
generation from non-emitting or low-emitting sources. DOE is seeking to
provide recognition to existing power generators that reduce their
emissions intensity, while also establishing a level playing field
among producers of new or additional power supplies, and end-users of
electricity that reduce their demand.
DOE intends to provide, through its Technical Guidelines, clear
direction on how to calculate emission reductions associated with the
generation and purchase of electricity. While the specific
methodologies and factors to be used have yet to be defined, DOE is
soliciting suggested approaches that would achieve the objectives
identified, as well as specific recommendations on how to develop the
conversion factors described and how to most appropriately distinguish
between existing and new power production and emissions.
5. Reporting and Registering Changes in Terrestrial Carbon Stocks
The proposed guidelines would require entity-wide emission
inventories to include emissions and sequestration associated with
terrestrial carbon stocks. Changes in the amount of carbon stored in
sinks within the entity's boundaries over the inventory year would
determine the quantities of such emissions and sequestration included
in inventories. Entities that meet all of the relevant requirements in
the general and technical guidelines may also register year-to-year
increases in carbon stocks as ``registered reductions.'' Ongoing
reporting will be required to ensure that any future changes in these
stocks are fully reflected in the entity's emission inventories and
registered emission reductions. The Department seeks comments on this
provision as well as alternatives. For example, one alternative
approach would calculate registered reductions as the change in carbon
stocks during an inventory year relative to the change in stocks during
a base year or period.
[[Page 68213]]
6. Recognizing Emission Offsets
As proposed, the General Guidelines would permit entities to report
and register emission reductions achieved by others, as long as the
entity that achieved the reductions observed all of the requirements
applicable to reporters and the entities involved indicated that they
had an agreement stipulating who would report the emission reductions.
These provisions are designed to enable and encourage large emitters to
support efforts to reduce emissions outside the boundaries of their
entities. DOE believes this may be especially desirable when the
opportunities for reducing emissions within an entity's boundaries are
comparatively limited or costly. However, these provisions raise a
number of issues upon which DOE is seeking public comment.
Most of these issues concern the information that must be submitted
by a reporting entity about the emission reductions achieved by a non-
reporting entity. For example, must the reporting entity provide all of
the information that the non-reporting entity would have been required
to submit directly, including an Entity Statement, an emissions
inventory (unless exempted), and an entity-wide assessment of emission
reductions (unless exempted)? Must the chief executive officer or other
senior manager of the non-reporting entity certify to the accuracy of
all of the information reported by the reporting entity? Could a non-
reporting entity enter into agreements permitting some of its emission
reductions to be registered by one entity and the remainder by one or
more other entities? Must the reporting entity demonstrate that it
helped finance or manage the achievement of the emission reductions
achieved by some other entity? One approach that might avoid many of
these potential issues would be to require direct reporting by all
entities that generate emission reductions. This approach would ensure
that complete reports, submitted directly by the entity that owned the
facilities or land that produced the emission reductions, would be
available for all registered emission reductions. But requiring direct
reports by all entities might discourage emission reductions by
entities that are unwilling to report directly and might discourage
support for such offset projects by large emitters, such as utilities.
DOE solicits comments on the approach proposed and on possible
alternatives.
7. International Emission Reductions
The proposed revised Guidelines do not address either the reporting
of non-U.S. emissions and emission reductions or the registration of
non-U.S. emissions reductions. DOE is soliciting public comments on
whether non-U.S. emissions and emission reductions should continue to
be eligible for reporting under the revised program, recognizing that
the current guidelines provide for reporting of international
activities.\1\ DOE is also soliciting public comments on whether non-
U.S. emissions and emission reductions should qualify for registration
and, if so, what procedures and requirements should be established for
registration of such emissions and emission reductions.
---------------------------------------------------------------------------
\1\ Since the current Guideline became effective in 1994, DOE
has interpreted the Congressional intent underlying the statute to
allow for the reporting of international activities.
---------------------------------------------------------------------------
Many factors are relevant to how non-U.S. emissions and emission
reductions should be treated under the program with respect to both
reporting and registration. Since 1994, many entities have reported on
overseas activities; many companies likely to participate in the
revised program have substantial business operations both inside and
outside the United States. At the same time, reporting and registration
of non-U.S. emissions and emission reductions raise certain issues that
do not arise in the context of the reporting and registration of U.S.
emissions and emission reductions. (For example, certifying the
accuracy of data may be more complicated.)
In addition to requesting comment on the overall issue of whether
to include international activities, DOE specifically requests comment
on the following questions: How would the concept of ``entity-wide''
reporting be extended to include non-U.S. activities? Should an entity
wishing to report non-U.S. emission reductions achieved in its own non-
U.S. operations be required to inventory and report on all non-U.S.
emissions and to assess changes in its emissions worldwide? Or should
such entity only be required to report on its non-U.S. operations in
specific countries? What requirements should third-party non-U.S.
offsets be required to meet? To be eligible for registration, should
reports of non-U.S. emissions reductions require independent
verification? What would be the implications, including for
participation in the 1605(b) program, if non-U.S. activities were
excluded from reporting and/or registration?
8. Relationship of Proposed Guidelines to Climate VISION, Climate
Leaders and Other Voluntary Programs To Reduce Greenhouse Gas Emissions
DOE, the Environmental Protection Agency and other Federal agencies
have established programs to encourage companies, trade associations
and other non-government organizations to take voluntary actions to
reduce, sequester, or avoid greenhouse gas emissions. For example,
industry participants in DOE's ``Climate VISION'' program, a
Presidential initiative launched in February 2003, and EPA's Climate
Leaders program have made voluntary commitments to reduce GHG emissions
or emissions intensity by a specified amount, and to monitor and report
on their progress.
The Administration intends to use the 1605(b) program to document,
where possible, the progress of participants in these voluntary Federal
programs. This is consistent with the President's desire that the
1605(b) registry be a ``tool that goes hand-in-hand with voluntary
business challenges * * * by providing a standardized, credible vehicle
for reporting and recognizing progress.'' However, additional reporting
may be required for other specific voluntary Federal programs in order
to provide distinct benefits to program participants.
DOE is soliciting comment on the merits of using the 1605(b)
program for documenting progress of participants in voluntary Federal
programs towards meeting their emissions reduction goals.
III. Opportunity for Public Comment
A. Written Comments
You should submit written comments by February 3, 2004. Because we
continue to experience occasional mail delays due to extra processing
required for delivery of mail to Federal agencies, we encourage you to
submit comments electronically by e-mail at 1605bgeneralguidelines. comments@hq.doe.gov. We will consider comments received after the
comment deadline only to the extent practicable. Comments should be
submitted to the e-mail or street addresses given in the ADDRESSES
section of this notice. Written comments should be identified on the
documents themselves and on the outside of the envelope, or in the e-
mail message, with the designation [insert name of rulemaking and
docket number]. All comments received and transcripts of any public
workshop held will be available for public inspection at the following
Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/
[[Page 68214]]
enhancingghgregistry/ proposedGuidelines/comments. Persons without
access to the internet can obtain such access to this Web site by
visiting the DOE Freedom of Information Reading Room, Room 1E-190,
Forrestal Building, 1000 Independence Avenue, SW., Washington, DC
20585, (202) 586-3142, between 9 a.m. and 4 p.m., Monday through
Friday, except Federal holidays.
If you submit information that you believe to be exempt by law from
public disclosure, you should submit one complete hardcopy and two
hardcopies from which the information claimed to be exempt by law from
public disclosure has been deleted. DOE is responsible for the final
determination with regard to disclosure or non-disclosure of the
information and for treating it accordingly under the DOE Freedom of
Information Act regulations at 10 CFR 1004.11.
B. Participation in Public Workshop
You will find the time and place of the public workshop at the
beginning of this notice. We invite any person who has an interest in
today's notice, or who is a representative of a group or class of
persons that has an interest in these issues, to participate in the
workshop. Because space may be limited, persons wishing to participate
in the workshop should inform DOE by identifying the person or persons
likely to attend, an e-mail or phone number for follow-up contacts, and
providing a brief description of the specific issues of particular
interest. This information may be provided electronically at the
following Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/ enhancingGHGregistry/
proposedguidelines/general guidelines.html or may be provided in
writing to the person listed in the beginning of this notice.
DOE will designate a DOE official to preside at the workshop, and
may also use a professional facilitator to facilitate discussion. The
workshop will not be conducted under formal rules governing judicial or
evidentiary-type proceedings, but DOE reserves the right to establish
procedures governing the conduct of the workshop. The workshop will be
organized so as to encourage the open discussion of specific issues by
the range of stakeholders and government representatives present. Prior
to the workshop a draft agenda, identifying specific issues for
discussion, will be made available at the following Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/
enhancingGHGregistry/ proposedguidelines/general
guidelines.html. There will also be opportunities during the workshop
for the identification and discussion of issues not specifically
identified on the agenda. The presiding official will announce any
further procedural rules, or modification of the above procedures,
needed for the proper conduct of the workshop. Statements for the
record of the workshop will be accepted at the workshop.
DOE will make the entire record of the rulemaking, including the
workshop transcript, available for inspection at the following Web
site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/ enhancingGHGregistry/
proposedguidelines/general guidelines.html. In addition, any person may
purchase a copy of the transcript from the transcribing reporter.
IV. Regulatory Review and Procedural Requirements
A. Review Under Executive Order 12866
Today's action has been determined to be ``a significant regulatory
action'' under Executive Order 12866, ``Regulatory Planning and
Review'' (58 FR 51735, October 4, 1993). Accordingly, this action was
subject to review under that Executive Order by the Office of
Information and Regulatory Affairs of the Office of Management and
Budget (OMB).
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by Executive Order 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking'' (67 FR 53461, August 16, 2002), DOE published
procedures and policies to ensure that the potential impacts of its
draft rules on small entities are properly considered during the
rulemaking process (68 FR 7990, February 19, 2003), and has made them
available on the Office of General Counsel's Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.gc.doe.gov.
DOE has reviewed today's proposed Guidelines under the
provisions of the Regulatory Flexibility Act and the procedures and
policies published on February 19, 2003. Although section 1605(b)(1) of
EPACT mandates a public comment opportunity before Guidelines can be
issued, the proposed guideline provisions are policy statements and
procedural rules. They are not substantive regulatory requirements that
would have an economic impact on small entities. On the basis of the
foregoing, DOE certifies that the proposed Guidelines, if promulgated,
would not have a significant economic impact on a substantial number of
small entities. Accordingly, DOE has not prepared a regulatory
flexibility analysis for this rulemaking.
C. Review Under the Paperwork Reduction Act
The Energy Information Administration previously obtained Paperwork
Reduction Act clearance by the Office of Management and Budget (OMB)
for forms used in the current Voluntary Reporting of Greenhouse Gases
program (OMB Control No. 1905-0194). EIA will prepare new forms and
associated instructions to implement the revised guidelines for the
program, and it will publish a separate notice in the Federal Register
requesting public comment on the proposed collection of information in
accordance with 44 U.S.C. 3506(c)(2)(A). After considering the public
comments, EIA will submit the new forms, instructions, and related
guidelines to OMB for approval pursuant to 44 U.S.C. 3507(a)(1).
D. Review Under the National Environmental Policy Act
DOE has concluded that this proposed rule falls into a class of
actions that would not individually or cumulatively have a significant
impact on the human environment, as determined by DOE's regulations
implementing the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.). This action deals with the procedures and policies for
entities that wish to voluntarily report their greenhouse gas emissions
and their reduction and sequestration of such emissions to the Energy
Information Administration. Because the proposed Guidelines relate to
agency procedures and impose no substantive requirement on those
entities wishing to report, the proposed Guidelines are covered under
the Categorical Exclusion in paragraph A6 to subpart D, 10 CFR part
1021. Accordingly, neither an environmental assessment nor an
environmental impact statement is required.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism'' (64 FR 43255, August 4, 1999)
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit
[[Page 68215]]
the policymaking discretion of the States and carefully assess the
necessity for such actions. The Executive Order also requires agencies
to have an accountable process to ensure meaningful and timely input by
State and local officials in the development of regulatory policies
that have federalism implications. On March 14, 2000, DOE published a
statement of policy describing the intergovernmental consultation
process it will follow in the development of such regulations (65 FR
13735). DOE has examined today's proposed action and has determined
that it does not preempt State law and does not have a substantial
direct effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. No further
action is required by Executive Order 13132.
F. Review Under the Treasury and General Government Appropriations Act,
2001
The Treasury and General Government Appropriations Act, 2001 (44
U.S.C. 3516, note) provides for agencies to review most disseminations
of information to the public under guidelines established by each
agency pursuant to general guidelines issued by OMB. OMB's guidelines
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed
today's notice under the OMB and DOE guidelines and has concluded that
it is consistent with applicable policies in those guidelines.
G. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform'' (61 FR 4729, February 7, 1996), imposes on
Federal agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. Section 3(b) of Executive
Order 12988 specifically requires that Executive agencies make every
reasonable effort to ensure that the regulation: (1) Clearly specifies
the preemptive effect, if any; (2) clearly specifies any effect on
existing Federal law or regulation; (3) provides a clear legal standard
for affected conduct while promoting simplification and burden
reduction; (4) specifies the retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses other important issues affecting
clarity and general draftsmanship under any guidelines issued by the
Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in section 3(a) and section 3(b) to determine whether they
are met or it is unreasonable to meet one or more of them. DOE has
completed the required review and determined that, to the extent
permitted by law, this proposed rule meets the relevant standards of
Executive Order 12988.
H. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to assess the effects of a Federal
regulatory action on state, local, and tribal governments, and the
private sector. The Department has determined that today's regulatory
action does not impose a Federal mandate on state, local or tribal
governments or on the private sector.
I. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
These proposed guidelines would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
J. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR
28355, May 22, 2001) requires Federal agencies to prepare and submit to
the OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgated or is expected to lead to promulgation of
a final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use. Today's regulatory
action would not have a significant adverse effect on the supply,
distribution, or use of energy and is therefore not a significant
energy action. Accordingly, DOE has not prepared a Statement of Energy
Effects.
List of Subjects in 10 CFR Part 300
Administrative practice and procedure, Energy, Gases, Reporting and
recordkeeping requirements.
Issued in Washington, DC on November 20, 2003.
Robert G. Card,
Under Secretary for Energy, Science and Environment.
For the reasons set forth in the preamble, DOE proposes to amend
Chapter II of Title 10 of the Code of Federal Regulations by adding a
new Subchapter B consisting of part 300 to read as follows.
SUBCHAPTER B--CLIMATE CHANGE
PART 300--VOLUNTARY GREENHOUSE GAS REPORTING PROGRAM: GENERAL
GUIDELINES
Sec.
300.1 General.
300.2 Definitions.
300.3 Guidance for defining the reporting entity.
300.4 Selecting operational boundaries for reporting.
300.5 Submission of an entity statement.
300.6 Emissions inventories.
300.7 Net entity-wide emission reductions.
300.8 Calculating emission reductions.
300.9 Reporting and recordkeeping requirements.
300.10 Certification of reports.
300.11 Independent verification.
300.12 Acceptance of reports and registration of entity emission
reductions.
Appendix A to Part 300--Voluntary Reporting of Greenhouse Gases
Under 1605(b) of the Energy Policy Act of 1992: General Guidelines
(October 1994).
Authority: 42 U.S.C. 7101, et seq., and 42 U.S.C. 13385(b).
Sec. 300.1 General.
(a) Purpose. These Guidelines govern the Voluntary Reporting of
Greenhouse Gases Program authorized by section 1605(b) of the Energy
Policy Act of 1992 (42 U.S.C. 13385(b)). The purposes of the Guidelines
are to establish the procedures and requirements for filing voluntary
reports, and encourage corporations, government agencies, non-profit
organizations, households and other private and public entities to
submit annual reports of their net
[[Page 68216]]
greenhouse gas emissions, emission reductions, and sequestration
activities that are complete, reliable and consistent. Over time, it is
anticipated that these reports will provide a reliable record of the
contributions reporting entities have made to reducing their greenhouse
gas emissions.
(b) Registration and reporting options. An entity may choose to
register or report emissions and emission reductions as follows.
(1) Registration. An entity may have entity-wide emissions and
emissions reductions registered by conforming to the requirements of
this part, including the registration standards set forth in Sec. Sec.
300.6 and 300.7 of this part.
(2) Reporting. If an entity does not choose to report emissions in
a manner that conforms to the registration requirements set forth in
Sec. Sec. 300.6 and 300.7 of this part, then the entity may choose to
report on any emissions or any emissions reductions by complying with
the requirements of this part other than Sec. Sec. 300.6 and 300.7.
(c) Forms. Annual reports of greenhouse gas emissions, emission
reductions, and sequestration must be made on forms or software that
are available from the Energy Information Administration of the
Department of Energy (EIA).
(d) Status of reports under previous General Guidelines. EIA will
continue to maintain in its Voluntary Reporting of Greenhouse Gases
database all reports received pursuant to DOE's October 1994 General
Guidelines. For the convenience of the readers, those Guidelines are
included as Appendix A to this part 300.
Sec. 300.2 Definitions.
This section provides definitions for commonly used terms in the
Guidelines.
Avoided emissions means the emissions displaced by increases in the
generation and sale of electricity, steam, hot water or chilled water
produced from energy sources that emit fewer greenhouse gases per unit
than other competing sources of these forms of distributed energy.
Carbon stocks are the quantity of carbon stored in biological and
physical systems including: Trees, plants and other terrestrial
biosphere sinks, soils, oceans, sedimentary and geological sinks, and
the atmosphere. [This term is to be further defined in DOE's Technical
Guidelines.]
De minimis emissions means emissions from one or more sources and
of one or more gases that when summed are less than 3 percent of the
total annual CO2 equivalent emissions of a reporting entity
or less than 10,000 metric tons of CO2 equivalent, whichever
is smaller.
DOE or Department means the U.S. Department of Energy and, as
appropriate in context, includes the Energy Information Administration.
Direct emissions means greenhouse gas emissions resulting from
stationary or mobile sources within the organizational boundary of an
entity, including but not limited to emissions resulting from
combustion of fossil fuels, process emissions, and fugitive emissions.
Emissions means direct and specified indirect emissions of
greenhouse gases from any anthropogenic (human induced) source.
Emissions intensity means emissions per unit of output--usually the
quantity of physical output, but sometimes a non-physical indicator of
an entity's output activity.
Fugitive emissions means releases to the atmosphere of greenhouse
gases from the processing, transmission, and/or transportation of
fossil fuels or other materials, such as HFC leaks from refrigeration,
SF6 from electrical power distributors, and methane from solid waste
landfills, among others, that are not emitted via a pipe(s) or
stack(s).
Greenhouse gases means:
(1) Carbon dioxide: CO2
(2) Methane: CH4
(3) Nitrous oxide: N2O
(4) Hydrofluorocarbons: HFCs
(5) Perfluorocarbons: PFCs
(6) Sulfur Hexafluoride: SF6
(7) Other gases or particles that have been demonstrated to have
significant, quantifiable climate forcing effects when released to the
atmosphere in significant quantities.
Indirect emissions means greenhouse gas emissions from stationary
or mobile sources outside the organizational boundary of an entity,
including but not limited to the generation of electricity, steam and
hot/chilled water, that are the result of an entity's energy use or
other activities.
Natural emissions means emissions that are naturally occurring and
produced independent of human actions, including biogenic (produced by
biological processes), geologic and potentially other non-anthropogenic
sources.
Net emissions or net entity-wide emissions means the total net
annual contribution of the greenhouse gases specifically identified in
section 300.6(f) to the atmosphere by an entity: total, entity-wide
emissions, both direct and indirect, minus entity-wide sequestration.
Net emission reductions or net entity-wide emission reductions
means the sum of all annual changes in emissions, carbon stocks and
avoided emissions of the greenhouse gases specifically identified in
section 300.6(f), determined in conformance with Sec. Sec. 300.7 and
300.8 of these Guidelines.
Offsets means an emission reduction that meets the requirements of
these guidelines, but is achieved by a party other than the entity that
reports or registers the reduction.
Sequestration means the removal of atmospheric carbon dioxide,
either through biologic processes or physical processes, including
capture, long-term separation, isolation, or removal of greenhouse
gases from the atmosphere, such as through cropping practices, forest
and forest products management or injection into an underground
reservoir.
Sink means an identifiable discrete physical process, occurring at
a particular location, set of locations or area, by which carbon
dioxide or some other greenhouse gas is sequestered.
Source means an identifiable discrete physical process, occurring
at a particular location, set of locations, or area, by which a
greenhouse gas is emitted.
Sub-entity means a component of any entity, such as a discrete
business line, facility, plant, vehicle fleet, or energy using system,
which has associated with it emissions of greenhouse gases that: can be
distinguished from the emissions of all other components of the same
entity; and, when summed with the emissions of all other sub-entities,
equal the entity's total emissions.
Sec. 300.3 Guidance for defining the reporting entity.
A reporting entity must be composed of one or more legally distinct
businesses, institutions, organizations or households, although
reporters are strongly encouraged to define themselves at the highest
level of aggregation appropriate. The legal basis for determining
whether a reporting entity or its components are distinct can be
derived from any Federal, State or local law or regulation governing
the entity, including regulations applicable to corporations,
partnerships, cooperatives, government agencies, non-profit
organizations, households, or other entities. This legal basis must be
described in the entity statement required by Sec. 300.5 of these
Guidelines.
Sec. 300.4 Selecting operational boundaries for reporting.
(a) An entity must determine, document, and maintain its
operational boundary for accounting and reporting purposes. Because of
the large number
[[Page 68217]]
of different operational structures, reporting entities are given some
flexibility to set their operational boundaries in a manner that best
suits their circumstances. However, all reports submitted should adhere
to the following:
(1) To the extent feasible, reporting entities should establish
operational boundaries in a manner that is consistent with the entity's
existing legal, managerial and financial structure; and
(2) The reporting entity should establish operational boundaries
that will result in accurate and comprehensive reports of its
greenhouse gas emissions and sequestration.
(b) In general, a reporting entity should select operational
boundaries so as to encompass all emissions and sequestration
associated with facilities and vehicles that are wholly owned and
operated by the named and defined entity. Emissions from facilities or
vehicles that are partially owned or leased, or not directly controlled
or managed by the entity, may be included at the entity's discretion,
provided that the entity has taken reasonable steps to assure that
doing so does not result in the double counting of emissions,
sequestration or emission reductions.
Sec. 300.5 Submission of an entity statement.
(a) Initial entity statement requirements. When an entity first
reports under these Guidelines, the reporting entity must provide the
following information in its entity statement:
(1) The name to be used to identify the reporting entity. This
should be the name commonly used to represent most of the activities
being reported, as long as it is not also used to refer to substantial
activities not covered by the entity's reports.
(2) The names of any parent or holding companies the activities of
which will not be covered comprehensively by the entity's reports;
(3) The names of any large subsidiaries or organizational units
that will be covered comprehensively by the entity's reports;
(4) A description of the entity and its primary economic
activities, such as electricity generation, product manufacturing,
service provider, freight transport, or household operation;
(5) A description of the types of operations, facilities,
processes, vehicles and other emission sources or sinks covered in the
entity's inventories;
(6) The names of the entities that share the ownership or
operational control of significant facilities or sources included in
the reporting entity's report, and certify that, to the best of the
preparer's knowledge, the direct greenhouse gas emissions and
sequestrations in the entity's report are not included in the 1605(b)
report of any of those other entities for the same calendar year;
(7) Identification of the first year for which the entity will
report emissions and the base year or base period from which emission
reductions will be calculated.
(b) Reasons for changing the scope of entity reports. From time to
time, entities may choose to change the scope of activities included
within the entity's reports or the level at which the entity wishes to
report. An entity may also choose to change its operational boundaries,
its base year (or base period) or, since many entities are dynamic by
nature, other elements of its Entity Statement or reporting methods.
For example, companies buy and sell business units, and equity share
arrangements evolve. The dynamic nature of economic activity may pose a
challenge for the objective of a comprehensive and accurate
documentation of greenhouse gas emissions and sequestrations from year
to year. In general, DOE encourages changes in the scope of reporting
that expand the coverage of an entity's report and discourages changes
that reduce the coverage of such reports unless they are caused by
divestitures or plant closures. Any such changes should be reported in
amendments to the Entity Statement and major changes may warrant or
require changes in the reporting entity's base year or base period. The
Technical Guidelines under this part provide more specific guidance on
how such changes should be reflected in entity reports and emission
reduction calculations.
(c) Documenting changes in amended entity statements. A reporter's
Entity Statement in subsequent reports should focus primarily on
changes since the previous report. Specifically, the subsequent Entity
Statement should report the following information:
(1) Significant changes in the entity's organizational (geographic
or operational) boundaries. In particular, the entity statement should
document:
(i) The acquisition or divestiture of discrete business units,
subsidiaries, facilities, and plants;
(ii) The closure or opening of significant facilities;
(iii) The transfer of economic activity to or from specific
operations outside the U.S.;
(iv) Significant changes in land holdings (applies to entities
reporting on greenhouse gas emissions or sequestration related to land
use, land use change, or forestry);
(v) Whether the entity is reporting at a higher level of
aggregation than it did in the previous report, and if so, a listing of
the subsidiary entities that are now aggregated under a revised
conglomerated entity; and
(vi) Changes in its activities or operations (e.g., changes in
output, contractual arrangements, equipment and processes, outsourcing
or insourcing of significant activities) that are likely to have a
significant effect on emissions, together with an explanation of how it
believes the changes in economic activity influenced its reported
emissions or sequestrations.
(2) If very substantial changes have occurred, then the reporting
entity is required to submit a new Entity Statement that provides a
complete and current overview of the entity's operations, facilities
and emission sources.
Sec. 300.6 Emissions inventories.
(a) General. The objective of the entity-wide reporting standard is
to provide a comprehensive inventory of an entity's total net
greenhouse gas emissions, including all six greenhouse gases listed in
paragraph (f) of this section and all emissions and sequestration
associated with changes in terrestrial carbon stocks. The reporting
entity should report all of the covered greenhouse gas emissions from
within the entity, using the methods specified in the Technical
Guidelines (to be issued subsequently). Entity-wide reports are a
prerequisite for the registration of emission reductions by entities
with average annual emissions of more that 10,000 tons of
CO2 equivalent. Entities that have average annual emissions
of less than 10,000 tons of CO2 equivalent are eligible to
register emission reductions associated with specific activities
without also reporting an inventory of the total emissions.
(b) Direct emissions inventories. (1) Direct greenhouse gas
emissions that must be reported are those emissions resulting from
stationary or mobile sources within the organizational boundaries of an
entity, including but not limited to emissions resulting from
combustion of fossil fuels, process emissions, and fugitive emissions.
Process emissions should be reported (e.g., PFC emissions from aluminum
production) along with fugitive emissions (e.g., leakage of greenhouse
gases from equipment).
(2) Entities should separately report emissions of greenhouses
gases from combustion of biomass fuels or biomass-
[[Page 68218]]
based fuels (e.g., wood waste, landfill gas, ethanol from corn,
charcoal). The Technical Guidelines (to be issued subsequently) will
specify the applicable list of biomass fuels or biomass-based fuels.
(c) Inventories of indirect emissions associated with purchased
energy. (1) To provide a clear incentive for the users of electricity
and other forms of purchased energy to reduce demand, the consumption
of purchased electricity, steam, and hot or chilled water must be
included in a reporting entity's inventory as indirect emissions. To
avoid double counting among entities, the reporting entity must report
all indirect emissions (as defined in Sec. 300.2) separately from its
direct emissions. Reporting entities should use the methods for
quantifying indirect emissions specified in the Technical Guidelines.
(2) Reporting entities may also choose to report other forms of
indirect emissions, such as emissions associated with employee
commuting, materials consumed or products produced, although emission
reductions associated with such other indirect emissions are not
eligible for registration. All such reports of other forms of indirect
emissions must be clearly distinguished from reports of indirect
emissions associated with purchased energy. The Technical Guidelines
also address the reporting of these other types of indirect emissions.
(d) Entity-level inventories of changes in terrestrial carbon
stocks. Annual changes in terrestrial carbon stocks should be
comprehensively assessed and reported across the entity and the net
emissions resulting from such changes included in the entity's
inventory of its net emissions. In other words, activities that lead to
the release of carbon to the atmosphere must be reported along with
activities that sequester carbon. This is necessary to provide an
accurate entity-wide estimate of net greenhouse gas emissions. Entities
should use the methods for estimating changes in terrestrial carbon
stocks specified in the Technical Guidelines.
(e) Treatment of de minimis emissions and sequestration. Although
the goal of the entity-wide reporting Guidelines is to provide an
accurate and comprehensive estimate of total entity-wide emissions,
there may be small emissions from certain sources that are unreasonably
costly or difficult to quantify. A reporting entity may exclude
particular sources of emissions or sequestration if the total
quantities excluded represent less than 3 percent of the total annual
CO2 equivalent emissions of the entity or less than 10,000
metric tons of CO2 equivalent, whichever is less. The entity
must identify the types of emissions excluded and provide a short
justification as to why an estimate was not included in the entity's
report.
(f) Covered gases. (1) Entity-wide emissions inventories must
include all emissions of the following greenhouse gases:
(i) CO2
(ii) CH4
(iii) N2O
(iv) HFCs
(v) PFCs
(vi) SF6
(2) Entities may also choose to report other greenhouse gases, as
defined in section 300.2, but such gases are to be reported separately
and any emission reductions associated with such other gases are not
eligible for registration.
(g) Units for reporting. Emissions and sequestration should be
reported in terms of the mass (not volume) of each gas, using metric
units (e.g., metric tons of methane). Entity-wide and sub-entity
summations of emissions and reductions from multiple sources shall be
converted into carbon dioxide equivalent units using the global warming
potentials for each gas. Entities should specify the units used (e.g.,
kilograms, or metric tons). Where necessary, reporting entities must
use the standard conversion factors specified in the Technical
Guidelines to convert existing data into the common units required in
the entity-level report. Consumption of purchased electricity must be
reported by region (from a list to be provided by DOE in the Technical
Guidelines). Consumption of purchased steam or chilled/hot water must
be reported according to the type of system and fuel used to generate
it (from a list provided by DOE in the Technical Guidelines). Purchased
energy will be converted to carbon dioxide equivalents using conversion
factors in the Technical Guidelines.
Sec. 300.7 Net entity-wide emission reductions.
(a) Assessing entity-wide emission reductions. (1) Entity-wide
reports are a prerequisite for the registration of emission reductions
by entities with average annual emissions of more that 10,000 tons of
CO2 equivalent. Net annual entity-wide emission reductions must be
based, to the maximum extent practicable, on a full assessment and sum
total of all changes in an entity's emissions, avoided emissions and
sequestration relative to the entity's established base year (or base
period), plus any emission offsets. All changes in emissions, avoided
emissions, and sequestration must be determined using methods that are
consistent with the guidelines described in Sec. 300.8 of this part,
and in compliance with all other relevant DOE guidelines.
(2) If it is not practicable to assess the changes in net emissions
resulting from certain entity activities using at least one of the
methods described in Sec. 300.8 of this part, the reporting entity may
exclude them from its estimate of net entity-wide emission reductions.
The reporting entity must describe the sources excluded for this reason
from the entity's assessment of its net emission reductions, the
reasons why it was not practicable to assess the changes that had
occurred, and the approximate quantity of emissions or sequestration
not assessed.
(3) A reporting entity should also exclude from the entity-wide
assessment of changes in emissions, avoided emissions and sequestration
any emissions or sequestration that have been excluded from the
entity's inventory.
(b) Assessing the emission reductions of entities with small
emissions. Entities with average annual emissions of less than 10,000
tons of CO2-equivalent emissions are not required to inventory their
total emissions or assess all changes in their emissions, avoided
emissions and sequestration in order to register their reductions. They
may register the emission reductions that have occurred since 2002 and
that are associated with certain activities, as long as they perform a
complete assessment of the annual emissions and sequestration
associated with all of the activities of the same type, determine the
changes in the emissions, avoided emissions or sequestration associated
with these activities, and certify that the reductions reported were
not caused by actions likely to cause increases in emissions elsewhere
within the entity's operations. For example, a farmer may report
emission reductions associated with tree plantings on a single wood
lot, but must assess and report the net sequestration resulting from
the farmer's management of all woodlots within the entity's boundaries.
(c) Net emission reductions achieved by third parties (offsets).
Net emission reductions achieved by third parties may be included in an
entity-wide assessment of emission reductions as long as:
(1) The emission reductions reported were calculated using the same
method(s) that would have been applicable if the third party that
achieved the emission reduction had chosen to report it directly to
DOE.
[[Page 68219]]
(2) All of the reporting entities or other parties involved certify
to DOE that they have agreed that the reporting entity should be
recognized as the entity responsible for the reduction.
(d) Adjusting for year-to-year increases in net emissions. Net
annual emission reductions are calculated normally relative to an
entity's base year (or base period). However, if the entity has
experienced a net increase (relative to the base year) in emissions for
one or more intervening years, these increases must be subtracted from
net emission reductions reported in future years.
Sec. 300.8 Calculating emission reductions.
(a) Establishing base year (or base period) emissions. In general,
base year or base period emissions are those that occurred over the
full year (or average annual emissions over the full multi-year period)
immediately preceding the first year of calculated emission reductions.
Base year or base period emissions may represent the whole entity, or
specific sub-entities, but must be defined so as to correspond to the
scope of the chosen emission reduction calculation. To ensure that the
summation of entity annual reports accurately represents net, multi-
year emission reductions, a specific base year or base period may be
used to determine emission reductions in a given future year only if
the entity has submitted qualified reports for each intervening year.
(b) Calculation methods. Entities must calculate any change in
emissions, avoided emissions or sequestration using one or more of the
methods described in this section. All changes must be calculated
relative to a base year or base period established by the entity,
unless the change results from an offset (see subsection 300.7(c)). In
general, entities are encouraged to use changes in net emissions
intensity as the primary basis for calculating changes in net, entity-
wide emissions.
(1) Changes in emissions intensity. A reporting entity may use
reductions in the rate of emissions per unit of output (emissions
intensity) as a basis for determining emission reductions as long as
the reporting entity demonstrates in its report that the measure(s) of
output used in the emissions intensity metric is a reasonable indicator
of the physical output or economic value produced by the activity
associated with these emissions, and that acquisitions, divestures or
changes in products have not contributed significantly to changes in
emissions intensity.
(2) Changes in absolute emissions. A reporting entity may use
changes in the absolute (actual) emissions (direct or indirect) as a
basis for determining net emission reductions, as long as the entity
demonstrates in its report that any reductions derived from such
changes were not achieved as a result of reductions in U.S. output, or
major shifts in the types of products or services produced.
(3) Changes in carbon storage (for actions within entity
boundaries). A reporting entity may use changes in carbon storage as a
basis for determining net emission reductions as long as the reporting
entity uses estimation and measurement methods that comply with DOE
Technical Guidelines, and has included an assessment of the net changes
in all sinks included in its inventory.
(4) Changes in avoided emissions (for actions within entity
boundaries). A reporting entity may use changes in the avoided
emissions associated with the sale of electricity, steam, hot water or
chilled water generated from non-emitting or low-emitting sources as a
basis for determining net emission reductions as long as:
(i) the measurement and calculation methods used comply with DOE
Technical Guidelines, and
(ii) the reporting entity certifies that any increased sales were
not attributable to the acquisition of a generating facility that had
been previously operated, unless the entity utilized base year
generation values derived from records of the facility's operation
prior to its acquisition.
(5) Project-based emission reductions (for actions within entity
boundaries). Emission reductions may be determined based on an estimate
of the effects on emissions of a specific action, as long as the
reporting entity demonstrates that the estimate is based on analysis
that:
(i) Uses output, utilization and other factors that are consistent,
to the maximum extent practicable, with the action's actual performance
in the year for which reductions are being reported;
(ii) Excludes any emission reductions that might have resulted from
reduced output or were caused by actions likely to be associated with
increases in emissions elsewhere within the entity's operations; and
(iii) Uses methods that are in compliance with DOE Technical
Guidelines. Entity-wide reporters should use this project-based
approach only if it is not possible to measure accurately emission
changes by using one of the methods identified in paragraphs (a)(1)
through (a)(4) of this section.
(c) Summary description of actions taken to reduce emissions. Each
reported emission reduction must be accompanied by an identification of
the types of actions that were the likely cause of the reductions
achieved.
(d) Emission reductions associated with plant closings, voluntary
actions and government requirements. Each report of emission reductions
shall indicate whether the reported emission reductions were the
result, in whole or in part, of plant closings, voluntary actions, or
government requirements.
(1) If emission reductions were associated, in whole or part, with
plant closings, the report should include an explanation of how such
emission reductions did not result from a decline in the U.S. output of
the reporting entity.
(2) If the reductions were associated, in whole or part, with
government requirements, the report should identify the government
requirement involved and describe the type of effect these requirements
had on the reported emission reductions.
(e) Determining the entity responsible for emission reductions. The
entity presumed to be responsible for emission reduction, avoided
emission or sequestered carbon is the legal owner of the facility, land
or vehicle which generated the affected emissions, generated the energy
that was sold so as to avoid other emissions, or was the place where
the sequestration action occurred. If ownership is shared, reporting of
the associated emission reductions should be determined by agreement
between the entities involved in order to avoid double-counting, and
this agreement must be reflected in the entity statements filed and in
any report of emission reductions. DOE will presume that an entity is
not responsible for any emission reductions associated with a facility,
property or vehicle excluded from its entity statement.
Sec. 300.9 Reporting and recordkeeping requirements.
(a) Starting to report under the revised Guidelines. (1) Entities
may report emissions and sequestration on an annual basis beginning in
any year, but no earlier than the base period of 1987-1990 specified in
the Energy Policy Act of 1992. To be recognized under these revised
Guidelines, all reports must conform to the measurement methods
established by the Technical Guidelines. This requirement applies to
entities that report to the revised Voluntary Reporting of Greenhouse
Gases Program registry for the first time as well as those entities
that have previously submitted emissions reports pursuant to section
1605 (b) of the Energy Policy Act of 1992.
[[Page 68220]]
(2) Entities may submit initial reports or corrected reports for
previous calendar years at any time. For example, an entity may choose
to begin reporting in 2005 and may choose, at that time, to submit
reports on prior year emissions back to 2002. Also, if a change in the
emissions calculation method is made for 2005, an entity may submit
revised estimates for its previous reporting years to ensure that a
consistent method is used across the whole time-series. Entities may
also submit revised reports to reflect agreements with other entities
regarding the appropriate entity to designate as the entity responsible
for certain registered emission reductions.
(b) Continuing to report. Reporting entities are strongly
encouraged to report emissions on an annual basis, starting from the
first year they submit a report under these revised Guidelines. Annual
entity reporting is necessary to ensure that calculated reductions have
been sustained over time. If a reporting entity chooses not to submit a
report in any given year, the next report made should include reports
for intervening years, or the reporting entity must establish a new
base year from which to calculate all future emission reductions.
Entities that wish to sustain recognition for previously registered
emission reductions resulting from sequestration must continue to
report annually.
(c) Definition and deadline for annual reports. Entities should
report emissions on an annual basis, from January 1 to December 31,
although DOE may grant exceptions to these dates. To be included in the
earliest possible DOE annual report of greenhouse gas emissions
reported under section 1605(b), entity reports must be submitted to DOE
no later than July 1 for emissions during the previous calendar year.
(d) Recordkeeping. Entities must maintain adequate records for at
least three years to enable independent verification of all information
reported. Such records must include:
(1) A full description of the process and methods used to gather
emissions data;
(2) A full description of the process and methods used to calculate
emission reductions;
(3) The primary data upon which the data included in the any report
to DOE was based; and
(4) A full description of any internal quality control or other
verification measures taken to ensure that the data reported was in
compliance with all relevant DOE Guidelines and other measurement
protocols.
Sec. 300.10 Certification of reports.
(a) The chief executive officer, agency or household head, or
person responsible for the reporting entity's compliance with
environmental regulations must, for each report of such entity, certify
that:
(1) The information provided to DOE is complete and accurate, in
accordance with DOE's revised Guidelines, and is consistent with all
prior year reports submitted by that entity (unless otherwise
indicated); and
(2) Adequate records will be maintained for at least 3 years to
enable independent verification of the information reported.
(b) If the report has been independently verified in accordance
with DOE's Guidelines, the certification of the report by the entity
reporting should so indicate.
Sec. 300.11 Independent verification.
(a) Reporting entities are encouraged to have their annual reports
verified by independent and qualified auditors.
(1) ``Independent'', as used in this paragraph (a), means that the
verifiers must not be owned in whole or part by the reporting entity,
nor should they provide any ongoing operational or support services to
the entity, except services consistent with independent financial
accounting or independent certification of compliance with government
or private standards.
(2) ``Qualified'', as used in this paragraph (a), means that
verifiers must be certified by independent and nationally-recognized
certification programs for the types of professionals needed to
determine compliance with DOE's reporting Guidelines, such as the
American Institute of Certified Public Accountants, the American
National Standards Institute and Registrar Accreditation Board's (ANSI-
RAB's) National Accreditation Program, or the Board of Environmental,
Health, and Safety Auditor Certification (BEAC).
(b) The independent verifier must provide a written description of
the relevant qualifications and professional certifications of the
persons that performed the independent verification and must certify
that:
(1) The information provided to DOE is complete and accurate, in
accordance with DOE's revised Guidelines, and is consistent with all
prior year reports submitted by that entity (unless otherwise
indicated); and
(2) Adequate records have been maintained by the reporter to enable
further independent verification in the future.
Sec. 300.12 Acceptance of reports and registration of entity emission
reductions.
(a) Acceptance of reports. Upon receipt, DOE will review all
reports to ensure they are consistent with the revised Guidelines. If
DOE determines the report follows the definitional, measurement,
calculation and certification Guidelines, the report will be accepted.
(b) Registration of emission reductions. DOE will review accepted
reports to determine any eligible emission reductions that were
calculated using the reporting entities' base year emissions (no
earlier than 2002) or the average annual emissions of its base period (
a period of up to four sequential years ending no earlier than 2002),
and to ensure that the reports meet other relevant DOE requirements.
DOE will also review its records to verify that the entity has
submitted accepted annual reports for each year between the
establishment of its base year or base period and the year covered by
the current report. DOE will notify entities that the reductions that
meet these requirements have been registered.
(c) EIA database and summary reports. The Administrator of the
Energy Information Administration will establish a publicly accessible
database composed of all reports that meet the definitional,
measurement, calculation and certification requirements of these
Guidelines. A portion of the database will provide summary information
on the emissions and registered emission reductions of each reporting
entity.
Appendix A to Part 300--Voluntary Reporting of Greenhouse Gases Under
Section 1605(b) of the Energy Policy Act of 1992: General Guidelines
(October 1994)
Voluntary Reporting and You
This program was designed to help you measure and record the
actions you take to reduce greenhouse gas emissions or to increase
carbon storage in soil or plants. The voluntary reporting program
provides an opportunity for you to gain recognition for the good
effects of your actions--recognition from your customers, your
shareholders, public officials, and the Federal government.
Reporting the results of your actions adds to the public groundswell
of efforts to deal with the threat of climate change. Reporting can
show that you are part of various initiatives under the President's
Climate Change Action Plan. Your reports can also record a baseline
from which to measure your future actions. Finally, your reports,
along with others, can contribute to the growing body of information
on cost-effective actions for controlling greenhouse gases.
We've designed this simple, flexible program to encourage you to
accurately record your achievements. The program allows you to
define activities you choose to
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report and to determine how you will estimate the effects of those
activities on greenhouse gas emissions and carbon sequestration.
We recognize that you must balance your efforts to ensure the
accuracy of reported data with your goals of keeping costs
reasonable in generating the reports.
We are optimistic that the response to this program will show
that voluntary programs can do the job. We have been impressed by
the level of commitment to the President's initiatives on climate
change. This reporting program provides opportunities to report your
achievements and to track your progress as you use your ingenuity
and creativity in responding to the challenge of climate change.
General Guidelines
GG-1 How Are These Guidelines and Supporting Documents Organized?
GG-2 Why Report Under This Voluntary Reporting Program?
GG-3 May I Report and What Should I Report?
GG-4 What Is Involved in Reporting Emissions?
GG-4.1 Gases and Sources.
GG-4.2 Use of Existing Information.
GG-4.3 Scope of Emissions Reporting.
GG-5 How Should I Analyze Projects I Wish to Report?
GG-5.1 What Should the Project be Compared To?
GG-5.2 What Effects Did the Project Have?
GG-5.3 How Do I Estimate Project Accomplishments?
GG-5.4 What If Two or More Organizations Wish to Report the Same
Project?
GG-5.5 May I Report Through My Trade Associations or Other Third
Parties?
GG-5.6 What Else Will I Be Asked to Report?
GG-5.7 May I Report International Projects?
GG-5.8 May I Report Prospective Emissions Reductions?
GG-5.9 How Far Back May I Report Projects?
GG-5.10 Must I Take into Account the Different Effects of
Different Greenhouse Gases?
GG-5.11 Is It Necessary to Report Emissions Reductions and
Carbon Sequestration Every Year?
GG-5.12 May I Amend My Previous Years' Reports?
GG-6 What Are the Minimum Reporting Requirements?
GG-7 Can My Data Be Kept Confidential?
GG-8 What Certification Is Required?
GG-9 What Should I Do Next?
Figures
GG-1 Careful Project Analysis Requires that you Consider Several
Interrelated Elements
GG-2 Standard Projects Utilize Physical and Default Data
GG-3 Reporter-Designed Projects Utilize Your Own Measured or
Engineering Data Along with Physical and Default Data
Case Studies
1. Rarotonga Coconut Cream, Inc. (industrial cogeneration)
Project Description and Emissions Reporting
Reference Case
Project Effects
Estimation Methods
2. Rural-Urban Office Managers, Inc. (energy efficiency in
buildings)
Project Description and Emissions Reporting
Reference Case
Project Effects
Estimation Methods
3. Illinois-Ohio Unlimited (new solar-powered electricity
generation)
Project Description and Emissions Reporting
Reference Case
Project Effects
Estimation Methods
4. Black Forest Cake, Inc. (long-term project reporting)
General Guidelines
Because of concerns with the growing threat of global climate
change from increasing emissions of greenhouse gases, Congress
authorized a voluntary program for the public to report achievements
in reducing those gases. This document offers guidance on recording
historic and current greenhouse gas emissions, emissions reductions,
and carbon sequestration. Under the Energy Policy Act (EPAct) of
1992 Section 1605(b) program, reporters will have the opportunity to
highlight specific achievements.
If you have taken actions to lessen the greenhouse gas effect,
either by decreasing greenhouse gas emissions or by sequestering
carbon, the Department of Energy (DOE) encourages you to report your
achievements under this program. The program has two related, but
distinct parts. First, the program offers you an opportunity to
report your annual emissions of greenhouse gases. Second, the
program records your specific projects to reduce greenhouse gas
emissions and increase carbon sequestration. Although participants
in the program are strongly encouraged to submit reports on both,
reports on either annual emissions or emissions reductions and
carbon sequestration projects will be accepted.
These guidelines and the supporting technical documents outline
the rationale for the program and approaches to analyzing emissions
and emissions reduction projects. Your annual emissions and
emissions reductions achievements will be reported on forms that are
available through the Energy Information Administration (EIA) of the
Department of Energy, 1000 Independence Avenue, SW., Washington, DC
20585.
GG-1 How Are These Guidelines and Supporting Documents Organized?
In these pages, you will find answers to your questions about
who may report, what is involved in reporting, and how to develop a
credible project analysis to help you accurately report your
achievements. The General Guidelines (GG) illustrate the process for
analyzing projects using three hypothetical examples (an industrial
cogeneration project, an energy efficiency program, and new
electricity generating capacity).
You will also find guidance on such issues as joint reporting
(if two or more persons or organizations are responsible for
achievements), third-party reporting (through a trade association,
for example), international projects, confidentiality,
certification, and other elements of the reporting process.
For more specific guidance, you may consult one or more of the
supporting documents that discuss sector-specific issues and
analytic approaches. The supporting documents, organized in two
volumes, contain limited examples of project analysis for the
relevant sectors. Supporting documents have been developed as
follows:
[sbull] Volume I
--Electricity Supply Sector (Part 1)
--Residential and Commercial Buildings Sector (Part 2)
--Industrial Sector (Part 3)
[sbull] Volume II
--Transportation Sector (Part 4)
--Forestry Sector (Part 5)
--Agricultural Sector (Part 6).
Each volume includes appendixes that provide conversion tables
and default emissions factors (for various fuels and for electricity
on a state-by-state basis). You can use these tables and factors for
almost any report you submit. The final appendix in each volume
presents a list of greenhouse gases for which the Intergovernmental
Panel on Climate Change has developed Global Warming Potentials (an
index of the relative effects on climate of different gases).
GG-2 Why Report Under This Voluntary Reporting Program?
If you are undertaking activities to reduce greenhouse gas
emissions or to sequester carbon, reporting under this program can
be valuable to you and to others. It can be valuable to you because
it provides a way to present information about your greenhouse gas-
related activities to your customers or constituents who are
concerned about the issue of global climate change. It can be
valuable to others, including the Federal government (to recognize
your achievements under various initiatives), decisionmakers and
legislative bodies (to inform the public debate on future greenhouse
gas policies), and other individuals or organizations (to learn from
each other).
You may wish to report under this program for at least three
reasons:
[sbull] To Record Emissions and Achievements. You may wish to
formally record, in a national database, your greenhouse gas
emissions and the results of your activities that reduce or avoid
these emissions. Reporting may be part of your participation in
programs that recognize your contributions to achieving greenhouse
gas emissions goals. These programs include national initiatives
such as the Climate Change Action Plan and programs such as Climate
Challenge, ClimateWise, and Motor Challenge. However, reporting
under this voluntary reporting program is not limited to
participants in these programs; you may wish to record the emissions
reductions benefits from activities pursued independently of formal
recognition programs.
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[sbull] To Inform the Public Debate. You may wish to provide
data which will contribute to more informed public debate on
national policy on greenhouse gas reductions. Although a database
built upon voluntary reports cannot provide a complete picture of
national or sectoral emissions, it could provide credible
information on emissions reductions and carbon sequestration
projects to evaluate their potential for broader application.
[sbull] To Participate in Educational Exchanges. Data reported
under the voluntary re