Environmental Leader

With large emitters scheduled to begin collecting their emissions data Jan. 1, companies are gearing up to ensure their compliance. But that hasn’t stopped critics from ramping up their rhetoric.

On Sept. 22, the Environmental Protection Agency announced it would require about 10,000 facilities that emit about 85 percent of the nation’s greenhouse gases to begin collecting their emissions data.

The largest emitters will have to submit annual reports of their emissions, starting in 2011, with information from the 2010 calendar year. Vehicle and engine manufacturers are getting a one-year reprieve. They don’t have to start reporting until model year 2011. For a list of reporting requirements, click here.

Some politicians are making last-ditch efforts to stop the reporting rule. Louisiana Gov. Bobby Jindal (R), in a letter to EPA Administrator Lisa Jackson, said that the rule would negatively impact oil refining and production in his state. He has asked Jackson to back off for now, reports The Hill.

Companies that emit 25,000 metric tons of carbon dioxide equivalents are subject to the reporting rule. Failure to measure and report emissions to the EPA can result in fines of up to $37,500 per day, per violation.

The reporting is intended to set a baseline for any future cap-and-trade program, as well as ensure compliance if, or when, cap-and-trade gets rolling.

Law firms are encouraging companies to get ahead of the rolling wheels of bureaucracy.

“Companies need to understand that from the standpoint of government regulation and public opinion, the debate about global warming is over. That means it’s time for them to develop sustainability plans and carbon reduction strategies before regulators, environmental advocates, shareholders and other groups force them to act,” said Saulius Mikalonis, Senior Attorney at law firm Plunkett Cooney.

Because the reporting rules will put companies’ emissions data in the public eye, activist groups will be able to do company-to-company and plant-to-plant comparisons, Mikalonis said.

“They will create public relations issues and potential legal problems for some companies, especially if they have been marketing themselves as ‘green’ when the emissions report says otherwise. But they also may speed up the adoption of energy-saving technologies, which can flow straight to the bottom line,” he said.

Yet other environmental lawyers say the EPA is “walking through a legal minefield” if it plans to truly regulate GHGs, reports Truth About Trade & Technology, via the Wall Street Journal.

Strictly defined under the Clean Air Act, the EPA’s endangerment finding means that emitters above a 100-ton to 250-ton per year threshhold will be subject to emissions standards. Despite the wording in the 1970’s-era Clean Air Act, the EPA has said, however, that facilities emitting less than 25,000 metric tons annually would be exempt, at least for the first few years.

But that hasn’t kept the critics at bay.

EPA’s so-called “tailoring rule” that would apply to large emitters only could come under challenge, said Patrick Traylor, a partner at the Washington office of Hogan & Hartson, in the Wall Street Journal article.

“The EPA is on a tightwire without a net with this tailoring rule,” Traylor said. “There’s a very real risk a court could vacate the rule and a higher-than- normal risk they could stay it.”

The EPA’s plan to study for five years the permitting process for facilities under 25,000 metric tons is a positive, said Jason Schwartz, a Legal Fellow at the Institute for Policy Integrity at New York University School, in the article.

However, lower thresholds can be passed at the state level, and individuals, unions and business competitors could use the Clean Air Act to expose emitters to regulation and lawsuits, Schwartz said.

The National Cattlemen’s Beef Association, fearing potential penalties related to greenhouse gas emissions, filed a challenge to EPA’s endangerment finding on GHG gases. The petition, filed Dec. 23 in the Washington, D.C., Circuit Court of Appeals, said that EPA climate regulations would harm the profitability of large farms.

Without a cap-and-trade law in place, some companies are turning to voluntary emissions reporting as a means of being ready for any such change, and to let investors know that they won’t be exposed if such changes come, reports the New York Times.

Boeing is one such company. Earlier this year it took steps to improve insulation and other HVAC properties at a Seattle-area IT facility, and five similar sites. The company expects to save $55,000 a year and 685,000 kilowatt hours of electricity because of the effort, reports NYT.

Corporations participating in voluntary emissions reporting programs such as the Carbon Disclosure Project can gain a modicum of investor support, but because emissions figures filed through the project do not have to be third-party verified, even this measure is open to skepticism, the NYT reports.