Massachusetts Issues Mandatory Greenhouse Gas Reporting Rules

Beveridge & Diamond, P.C. - Massachusetts Environmental, Land Use & Real Estate Alert, 2009

On December 29, 2008, the Massachusetts Department of Environment Protection (MassDEP) issued rules imposing mandatory greenhouse gas reporting requirements on a wide range of entities.  In particular, the rules require that certain facilities register with MassDEP by April 15, 2009, and report, certify, and verify emissions of greenhouse gases annually, starting with April 15, 2010.  The rules implement the Massachusetts Global Warming Solutions Act, Chapter 298 of the Acts of 2008, which was signed into law in August 2008.  Because they were issued as emergency regulations, they are immediately effective. 

To Whom Do These Rules Apply?  As required by the Global Warming Solutions Act, the rules apply to any person owning, operating or controlling a facility that either:

• is required to report emissions to the DEP under the operating permit program and had stationary sources that emitted greenhouse gases during the previous calendar year; or 

• has one or more stationary sources that collectively emitted greenhouse gases in excess of 5,000 short tons during the prior calendar year. 

Who Must Register by April 15, 2009?  Registration is required by any person owning, operating or controlling a facility that either: 

• reported air emissions under the operating permit program and combusted any quantity of any fossil fuel that resulted in direct stack emissions of carbon dioxide during 2008; or

• combusted any combination of solid, liquid, and gaseous fossil fuels that resulted in direct stack emissions of more than 5,000 short tons of carbon dioxide emissions during 2008.

Registration is a one-time requirement.

Who Must Report Annual Emissions?  DEP has created two categories of entities that must report annual greenhouse gas emissions, beginning with emissions during calendar year 2009.  They are:

1. Any person owning, operating or controlling a facility that is required to report emissions to the DEP under the operating permit program; and
      
2. Any person owning, operating or controlling a facility that is:
   • not required to report emissions to the DEP under the operating permit program, and
   • had stationary sources that collectively emitted greenhouse gases in excess of 5,000 short tons during the previous calendar year. 

What Must be Reported?  The Climate Registry has developed technical guidelines for quantifying and reporting greenhouse gas emissions. The regulations require reporting in accordance with The Climate Registry’s General Reporting Protocol, with limited exceptions.  Entities that are required to report but emitted 5,000 short tons or less of greenhouse gases during the prior year must report “direct stack emissions.”  This includes emissions from stacks, processes, vents, and fugitive emissions, and excludes motor vehicle emissions.  Entities that are required to report and emitted more than 5,000 short tons of greenhouse gases during the prior year must report “direct emissions.” This includes direct stack emissions and emissions from motor vehicles owned or leased by the person owning, operating or controlling the facility and used primarily to support operations of the facility.

For illustrative purposes, MassDEP has supplied the following fuel usage examples to demonstrate the quantity of fuel that when combusted would emit approximately 5,000 tons greenhouse gases: 83,100,000 cubic feet of natural gas; 442,000 gallons of No. 2 fuel oil.

The first annual greenhouse gas report is due by April 15, 2010, for the 2009 calendar year.  Calculations and reporting are to occur on the basis of carbon dioxide equivalents; however for the 2009 calendar year report only, MassDEP is limiting reporting to carbon dioxide emissions. Following 2009, all reporting must include carbon dioxide equivalents.

How Do You Report?  DEP states that it is considering requiring reporting to The Climate Registry and other regional registries, and is seeking comment on what registry to use.

While the regulations are immediately effective, state law requires a public notice and comment period for emergency regulations.  MassDEP has already proposed to make changes to the emergency regulations to clarify a number of issues. One such change would adopt a once-in-always-in requirement for annual emission reporting that would prevent facilities from reducing emissions below the reporting threshold once they are first required to report.   The notice and comment period for this rulemaking, including MassDEP’s proposed revisions, will end February 23, 2009.

DEP has indicated that it will in the near future propose additional regulations relating to verification, voluntary reporting, and reporting of greenhouse gas emissions by retail sellers of electricity.

For further information on climate change issues, please contact Steve Richmond at srichmond@bdlaw.com or Jeanine Grachuk at jgrachuk@bdlaw.com.