Industry Must Prepare for Greenhouse Gas Inventory and Reporting

All organizations—regardless of industry sector—must begin today to inventory their greenhouse gas emissions (GHG) to prepare for an incoming regulatory wave, according to an expert from BSI Americas.

Wilhelm Wang, BSI product manager for sustainability, has followed the development of mandatory regulatory schemes and voluntary GHG inventory and reporting programs since the 1980s, and he says companies can no longer afford the luxury of putting off developing a GHG inventory plan.

In the Obama Administration, Wang has seen a “swift and drastic change in political wills and regulatory determination,” with Environmental Protection Agency (EPA) administrator Lisa P. Jackson’s signature on a proposed rule to institute the first comprehensive national system for mandatory reporting of GHG emissions at the facility level. 

“Our efforts to confront climate change must be guided by the best possible information,” said Jackson in a statement released by the agency on March 10. “Through this new reporting, we will have comprehensive and accurate data about the production of greenhouse gases. This is a critical step toward helping us better protect our health and environment—all without placing an onerous burden on our nation’s small businesses.”

The final rule mandating GHG reporting was published [1] in the Federal Register on Oct. 30 and will become effective on Dec. 29.

According to the regulatory agency’s web site, the EPA recommends “that suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions submit annual reports to EPA.  The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).”

Although the final rule doesn't include all companies and industries, Wang recommends that every organization begin to address their GHG emissions as the regulation requires covered facilities to begin monitoring on Jan. 1, 2010, and submit their GHG emission reports no later than March 21, 2011. This reporting requirement will be on top of a number of burgeoning and conflicting state requirements related to GHG reporting and verification, Wang adds.

The EPA is on the record stating its respect for various reporting schemes in some states and geographical regions, as well as some voluntary initiatives, yet industry is supportive of a federal legislative approach that would provide for uniform GHG reporting regulations, Wang says.

“Some people say to me that they are taking a wait-and-see position and postponing any decisions relating to GHG emissions unless it is deemed mandatory; but that is not a good management strategy or philosophy,” says Wang, who believes federal regulatory reform to counter climate change will be real and long lasting. For skeptics who say politicians and government regulations come and go, Wang pointed to a different level of determination in this administration.

In early October, President Obama signed an executive order making reduction of GHG emission in the federal government a top priority to further the push preparing the nation towards a carbon-constraint economy. 

"As the largest consumer of energy in the U.S. economy, the Federal government can and should lead by example when it comes to creating innovative ways to reduce greenhouse gas emissions, increase energy efficiency, conserve water, reduce waste, and use environmentally-responsible products and technologies," says President Obama in signing the order. 

Among other specific mandates, this executive order now requires all federal agencies to establish a 2020 GHG emission reduction goal within 90 days for Scope 1 (direct emissions) and Scope 2 (indirect emissions via energy acquisition) and within 240 day for Scope 3 (other indirect emissions) in absolute terms relative to fiscal year 2008 baseline. Furthermore, within 30 days, each agency must designate a “Senior Sustainability Officer” who will be tasked with and responsible for complying with requirements of this executive order. 

This executive order also re-affirms the importance of taking a management system approach in achieving GHG reduction and energy conservation goals in federal agencies. The expectation is that, by creating an example for the private sector, the Administration can demonstrate sustainable practices do lead to improved fiscal performance, and business will have a clearer road map to follow in creating sustainable organizations.

“The executive order, together with the EPA mandatory reporting rule, and the fact that both House and Senate now have climate change bills on the fast track, the Obama Administration and Congress are sending a genuine and strong signal to private industry that it is committed to taking firm, direct, and swift actions in curbing and reducing GHG emissions,” says Wang. “Business managers need to capitalize on this opportunity rather than ignoring the risks.”     

“These dynamic development from both executive and legislative branches have created an environment in which business managers must recognize and take proactive action to inventory organizational GHG emissions,” Wang continues, “Everyone has a carbon footprint of one type or another regardless what you do or which industry sectors you are operating in.  It is time to measure that footprint to limit and mitigate its impact.”

For more information on the impact of pending legislation and best practice to inventory and manage greenhouse gas emissions, register here [2] for BSI's next free webinar on Project Planning for Greenhouse Gas Requirements, Nov. 19, at 1:00pm EST.