processors do not know the constituents of the gas they process. They
further stated that since bulk NGLs are often sent from one processor
to another, reporting by processors on bulk NGLs would result in
double-counting of supply. Ultimately, several commenters were confused
by the multiple definitions provided in the rule for a natural gas
processor and were not clear on the exact covered party in 40 CFR part
98, subpart NN.
    Response: In the final rule, we specify the source category as NGL
fractionators rather than as natural gas processors, and we have
removed the requirement to report bulk NGLs. To avoid any remaining
potential for double-counting, we provide an equation for a
fractionator to subtract from its calculations any NGL constituents
received from other fractionators that would report those products
under this rule.
    By requiring reporting from NGL fractionators, we have removed the
need for the term ``natural gas processor'' in 40 CFR part 98, subpart
NN. Multiple definitions for this term no long exist in the rule.
Monitoring and QA/QC Requirements
    Comment: Many commenters interpreted EPA's measurement and
calibration requirements differently than we intended, and as a result
pressed upon EPA the inability of industry to reasonably meet such
requirements. Many commenters interpreted that EPA required meter
reading and calibration of every customer meter. Other commenters
interpreted that EPA required daily measurement totals of throughput.
    Response: In today's rule, we provide precise language to remove
any confusion about monitoring and QA requirements. First, we clarify
that the point of measurement for natural gas supply is the city gate
meter. If the LDC makes its own measurements at the city gate according
to business as usual practices, then it must use its own measurements.
If not, it must use the delivering pipeline invoices measurements. The
only exceptions are that the point of measurement for natural gas
delivered to large end-users is the customer meter and the point of
measurement for natural gas stored or removed from storage is the
appropriate storage meter. However, we clarify that customer meters and
storage meters are not subject to the 40 CFR part 98, subpart NN
calibration requirements.
    Second, we clarify that the minimum frequency of the measurements
of quantities of NGLs and natural gas shall be based on the reporter's
standard practices for commercial operations. For NGL fractionators the
minimum frequency of measurements shall be the measurements taken at
custody transfers summed to the annual reportable volume. For natural
gas the minimum frequency of measurement shall be based on the LDC's
standard measurement schedules used for billing purposes and summed to
the annual reportable volume. If daily measurements are not standard
practice for a reporter, then that reporter need not conduct daily
measurements.
    EPA clarifies in the final rule that customer meters do not face
calibration requirements under 40 CFR part 98, subpart NN. Other
equipment used to measure quantities must be calibrated prior to their
first use for reporting under this subpart, using a suitable standard
test method published by a consensus based standards organization or
according to the equipment manufacturer's directions. Such equipment
must also be recalibrated at the frequency specified by the standard
test method used or by the manufacturer's directions. EPA has concluded
that initial calibration requirements are necessary to ensure
consistency across all reporters and accuracy of data. Since such a
wide variety of calibration methods is allowed and since commenters
stated that industry already calibrates carefully as a result of State
Utility Commission and other regulations, EPA concluded that industry
is already following such calibration requirements for usual business
operations.
Data Reporting Requirements
    Comment: EPA received many comments on the requirement for LDCs to
report information on individual customers. In general, commenters
interpreted the reason for EPA to collect this data differently than
was intended. Many commented on the CBI nature of customer-specific
delivery information. Others commented that LDCs do not or may not have
access to the EIA or EPA numbers of their customers. One commenter told
us that a LDC can only attest to the gas volume delivered through a
single particular meter at a single particular location, which is not
necessarily an individual customer.
    Response: In the final rule, EPA has clarified that an LDC must
report on customers that receive more than 460,000 million standard
cubic feet (Mscf) per year in order to subtract that volume out of its
total calculations. EPA's intention is to use this data to remove
potential double-counting and to prevent a LDC from calculating and
reporting an overstated supply volume. EPA can also use these data to
verify that covered direct emitters are approximately reporting under
the rule. In response to comments that LDCs do not or may not have
access to customers' EIA or EPA numbers, we have changed the reporting
of this from required to voluntary, if known. We have further specified
that LDCs must report large volumes delivered to a single meter rather
than to a particular end-user.

OO. Suppliers of Industrial GHGs

1. Summary of the Final Rule
    Source Category Definition. Suppliers of industrial GHGs consist of
the following:
     Facilities producing any fluorinated GHG or
N2O, except those that produce

only HFC-23 generated as a byproduct during HCFC-22 production.
     Bulk importers of fluorinated GHGs or N2O, if
the total combined imports of industrial GHGs and CO2 exceed
25,000 metric tons of CO2e per year.
     Bulk exporters of fluorinated GHGs or N2O, if
the total combined exports of industrial GHGs and CO2 exceed
25,000 metric tons CO2e per year.
    Suppliers of Industrial GHGs that meet the applicability criteria
in the General Provisions (40 CFR 98.2) summarized in Section II.A of
this preamble must report industrial GHG supply flows.
    GHGs to Report. Suppliers of industrial GHGs must report the amount
of N2O and each fluorinated GHG produced, imported,
exported, transformed, or destroyed during the calendar year. Importers
and exporters of CO2 must calculate and report annual
amounts of CO2 according to 40 CFR part 98, subpart PP.
    GHG Emissions Calculation and Monitoring. Suppliers must use the
following methods to calculate annual industrial GHG supply flows:
     The mass of each fluorinated GHG or N2O
produced must be determined by measurements of gas production, less the
mass of that GHG added to the process upstream (e.g., where used GHGs
are added back to the production process for reclamation).
     The mass of each fluorinated GHG transformed must be
determined considering the mass of fluorinated GHG fed into the
transformation process and the efficiency of that process (as indicated
by yield calculations or quantities of unreacted fluorinated GHGs or
nitrous oxide permanently removed from the process and recovered,
destroyed, or emitted).
     The mass of each fluorinated GHG destroyed must be
determined by measurements of the mass of fluorinated GHG fed to the
destruction device and a measurement of the destruction efficiency.
    Data Reporting. In addition to the information required to be
reported by the General Provisions (40 CFR 98.3(c)) and summarized in
Section II.A of this preamble, reporters must submit additional data
that are used to calculate industrial GHG supply flows or that can be
used to verify industrial gas supply flows. A list of the specific data
to be reported for this source category is contained in 40 CFR part 98,
subpart OO.
    Recordkeeping. In addition to the records required by the General
Provisions (40 CFR 98.3(g)) and summarized in Section II.A of this
preamble, reporters must keep records of additional data used to
calculate GHG emissions. A list of specific records that must be
retained for this source category is included in 40 CFR part 98,
subpart OO.
2. Summary of Major Changes Since Proposal
    The major changes since proposal are identified in the following
list. The rationale for these and any other significant changes can be
found below or in ``Mandatory Greenhouse Gas Reporting Rule: EPA's
Response to Public Comments, Subpart OO: Suppliers of Industrial
GHGs.''
     EPA has elaborated on the definition of ``produce'' to
clarify what it does and does not include. The definition now
explicitly includes (1) the manufacture of a fluorinated GHG for use in
a process that will result in the transformation of that GHG (either at
or outside of the production facility) and (2) the creation of a
fluorinated GHG (with the exception of HFC-23) that is captured and
shipped off site for any reason, including destruction. The definition
now explicitly excludes the creation of by-products that are released
or destroyed at the production facility.
     EPA has eased the accuracy and precision requirements for
measuring production, transformation, and destruction. EPA is also
permitting facilities flexibility in the frequency of measurements and
calibration of measurement devices. Masses produced, fed into
transformation processes, and fed into destruction devices must now be
estimated to a precision and accuracy of one percent rather than 0.2
percent. Requirements to measure concentrations, which had previously
been associated with the transformation and destruction provisions,
have been changed to requirements to estimate concentrations or related
quantities.
     EPA has eliminated the requirement that fluorinated GHG
production facilities that destroy fluorinated GHGs annually verify the
destruction efficiency of their destruction devices.
     EPA has added an additional method for estimating missing
mass flow data in the event that a secondary mass measurement for that
stream isn't available. In that event, producers can use a related
parameter and the historical relationship between the related parameter
and the missing parameter to estimate the flow.
     EPA has removed the option for reporters to develop their
own methods for estimating missing data if they believe that the
prescribed method will over- or under-estimate the data.
     EPA has added some reporting requirements to be consistent
with the changes to the calculations and monitoring sections and to
permit verification of emissions calculations.
     EPA has added an exemption from reporting requirements for
import or export shipments containing less than 250 metric tons of
CO2e.
     EPA has clarified that the criteria for imported container
heels at paragraph 98.417(e) set forth the conditions under which
importers do not need to report heels; they do not establish
requirements for all containers containing residual gas. If importers
import containers with residual gas that does not meet these
conditions, they must simply report these imports under paragraph
98.416(c). In addition, EPA is adding another condition under which
imported heels do not need to be reported; that is the case in which
the heels are recovered and included in a future shipment.
     EPA is requiring fluorinated GHG production facilities to
submit a one-time report describing current measurement and estimation
practices.
    EPA is requiring the one-time report on measurement practices
because the Agency is providing some flexibility to reporters regarding
the methods that they use to calculate industrial gas supply flows.
This flexibility permits reporters to use a larger range of methods and
measurement equipment than were proposed, and it is important for EPA
to understand the methods and equipment and their accuracies. Similar
reports are required under EPA's Stratospheric Ozone Protection
Regulations at 40 CFR part 82.
    As noted above, EPA removed the option for reporters to develop
their own methods for estimating missing data if they believe that the
prescribed method will over- or underestimate the data. EPA removed
this option for two reasons. First, the proposed provision lacked clear
guidance on when alternative methods should be used (e.g., on the size
of an underestimate that would justify use of an alternative method)
and on how they should be developed. Second, the proposed provision was
redundant with the new provision that permits reporters to estimate
missing data using a related parameter and the historical relationship
between the related parameter and the missing parameter. This new
option provides reporters with flexibility in substituting for missing
data in the event that a secondary mass measurement is not available,
but sets out general guidance on how to select the substitute data.

3. Summary of Comments and Responses
    This section contains a brief summary of major comments and
responses. A large number of comments on suppliers of industrial GHGs
were received covering numerous topics. Responses to significant
comments received can be found in ``Mandatory Greenhouse Gas Reporting
Rule: EPA's Response to Public Comments, Subpart OO: Suppliers of
Industrial GHGs.''
Definition of Source Category
    Comment: EPA received a number of comments regarding the proposed
definition of ``fluorinated greenhouse gas.'' Several commenters argued
that the proposed definition was too broad because it would include
nonvolatile materials that could not be emitted to the atmosphere and
materials for which GWPs had not been calculated. One commenter
suggested establishing a lower vapor pressure limit for fluorinated
GHGs (heat transfer fluids) of 400 Pa (0.004 bar, or three mm Hg
absolute) at 25 C. Some commenters expressed the concern that the lack
of GWPs for some covered compounds would lead to incomplete or
inconsistent reporting because facilities would assign their own GWPs
to compounds for which GWPs were not provided in Table A-1 of 40 CFR
part 98, subpart A.
    Some commenters recommended that EPA address these concerns by
requiring reporting of only those fluorinated compounds listed in Table
A-1 of 40 CFR part 98, subpart A. However, one of these commenters
noted that the list in A-1 is incomplete and inconsistent, excluding
for example, some high-GWP compounds whose low-GWP alternatives are
included. This commenter recommended that EPA establish a ``visible and
participative process'' to add other compounds as appropriate to Table
A-1 of 40 CFR part 98, subpart A.
    Response: In today's final rule, EPA is modifying the proposed
definition of fluorinated GHG by adding an exemption for ``substances
with a vapor pressure of less than one mm of Hg absolute at 25 degrees
C.'' This modification ensures that non-volatile fluorocarbons such as
fluoropolymers are excluded from reporting requirements, while
requiring reporting of fluorocarbons (as well as SF6 and
NF3) that could reasonably be expected to be emitted to the
atmosphere.
    As noted by several commenters, this definition would require
reporting of some fluorocarbons to which GWPs have not been assigned in
either IPCC or World Meteorological Organization (WMO) Scientific
Assessments (i.e., fluorocarbons for which Table A-1 of 40 CFR part 98,
subpart A does not provide GWPs). However, the lack of GWPs for some
fluorocarbons will not impede reporting because EPA is requiring
reporting of production and other quantities in tons of chemical rather
than in tons of CO2e. For purposes of determining whether or
not the 25,000 metric ton CO2e import or export threshold is
exceeded, EPA is requiring facilities to include only substances whose
GWPs appear in Table A-1 of 40 CFR part 98, subpart A.
    EPA believes that this approach is prudent and appropriate. As
acknowledged by commenters, Table A-1 of 40 CFR part 98, subpart A is
not a complete listing of current or potential fluorinated GHGs; the
IPCC and WMO lists on which it is based reflect only the facts that the
listed materials have been synthesized, their atmospheric properties
investigated, the results published, and the publications found by the
IPCC and WMO Assessment authors. Table A-1 is known to omit some
existing fluorinated GHGs and it unavoidably omits future fluorinated
GHGs that have not yet been synthesized. Given the radiative properties
of the carbon-fluorine bond, any fluorocarbon emitted into the
atmosphere may have a significant GWP. This is true even for some
fluorocarbons with lifetimes of less than one year, including, for
example, HFE-356pcc3, with a lifetime of four months and a 100-year GWP
of 110.
    Reporting of fluorocarbons that do not appear in Table A-1 of 40
CFR part 98, subpart A will provide valuable information on the full
range of volatile fluorocarbons entering U.S. commerce. This
information can be used to assess the overall volume and importance of
compounds for which GWPs have not been evaluated and to help identify
which compounds should have their GWPs evaluated first. In addition,
once GWPs have been identified for these compounds, historical reports
in tons of chemical can be converted into CO2e. Without a
comprehensive reporting requirement, such historical information could
be lost. Ultimately, all of this information can be used to inform
policy decisions regarding the appropriate type and scope of emission
reduction measures for these gases. Considering the modest cost of
reporting production, import, and export of such compounds, the
potential value of this information justifies a comprehensive
definition of fluorinated GHG.
    EPA agrees with commenters who noted that Table A-1 of 40 CFR part
98, subpart A should be periodically updated through a visible and
participative process. EPA anticipates that as GWPs are evaluated or
re-evaluated by the scientific community, the Agency will update Table
A-1 of 40 CFR part 98, subpart A through notice and comment rulemaking.
EPA may also, through rulemaking, establish a more proactive process
for ensuring that GWPs are appropriately evaluated or re-evaluated.
    Comment: EPA received comments both supporting and opposing a
requirement to report imports of fluorinated GHGs contained in
equipment and foams. Commenters supporting such a requirement noted
that these imports comprised a significant fraction of U.S. consumption
of fluorinated GHGs, that excluding these imports from reporting would
put domestic manufacturers at a disadvantage and lead to leakage of
manufacturing and increased emissions of GHGs, and that the burden of
reporting these imports would be low, since there are relatively few
importers and the reported information is easily accessible. Commenters
opposing such a requirement stated that the benefit of reporting would
be small because pre-charged equipment and foams are ``hermetically
sealed systems that essentially emit no GHGs,'' while the cost would be
high due to the large number of importers.
    Response: EPA did not propose to require reporting of fluorinated
GHGs contained in imported products because EPA was concerned that the
administrative burden of such a requirement could be considerable,
while the quantities imported in at least some types of products could
be small. However, in the proposal EPA acknowledged that the quantities
of fluorinated GHGs imported in pre-charged equipment and foams
appeared significant, and that ascertaining the identity and quantity
of fluorinated GHGs in these products might be relatively
straightforward. EPA is continuing to research these issues, and is
deferring the final decision on whether to include imports of equipment
and foams containing fluorinated GHGs to a later rulemaking.
Monitoring and QA/QC Requirements
    Comment: Several commenters stated that facilities could not meet
the proposed accuracy, precision, and frequency requirements for their
measurements of production, transformation, and destruction using
existing equipment and practices. These commenters stated that they
would need to expend significant funds (millions of

dollars in some cases) and time to install Coriolis flowmeters in
multiple streams and to implement daily sampling protocols to analyze
the contents of these streams. One commenter requested that EPA revise
its precision and accuracy requirements to one percent for measurements
of mass. Other commenters argued that instead of establishing strict
accuracy, precision, and frequency requirements for measuring
production, EPA should permit facilities to use existing measurement
instruments and practices, such as NIST Handbook 44 and the trial HFC
reporting program patterned on EPA's reporting requirements for ozone-
depleting substances.
    Response: Given the limited amount of time before 2010 data
collection must begin, EPA agrees that it is appropriate to ease the
accuracy and precision requirements proposed for measuring production,
transformation, and destruction. EPA is therefore revising these
requirements in the final rule. EPA is also permitting facilities
flexibility in the frequency of measurements and calibration of
measurement devices.
    This approach will permit facilities to begin measuring their
production, transformation, and destruction for purposes of the rule
beginning in January 2010, using their current practices and equipment.
However, EPA is planning to revisit the precision and accuracy
requirements for industrial gas supply as we review public comments and
perform analyses related to proposed 40 CFR part 98, subpart L
(fluorinated gas production), which is not included in today's final
rule. This is because the accuracy and precision with which production
facilities track production, transformation, and destruction can have a
profound influence on the accuracy and precision of these facilities'
fluorinated GHG emission estimates. For one method of monitoring F-GHG
emissions under consideration, a one percent relative error in
production mass measurements could result in a much higher relative
error in the emissions estimate, e.g., over 90 percent at an emission
rate of 1.5 percent. For other methods of monitoring F-GHG emissions,
however, a one percent relative error in production mass measurements
would not lead to large errors in emission estimates. For both 40 CFR
part 98, subpart OO and 40 CFR part 98, subpart L, EPA's goal is to
optimize methods of data collection to ensure data accuracy while
considering industry burden.

PP. Suppliers of Carbon Dioxide (CO2)

1. Summary of the Final Rule
    Source Category Definition. Under the rule, suppliers of
CO2 consist of the following:
     Facilities with production process units that capture and
supply CO2 for commercial applications or that capture and
maintain custody of a CO2 stream in order to sequester or
otherwise inject it underground.
     Facilities with CO2 production wells that
extract a CO2 stream for the purpose of supplying
CO2 for commercial applications.
     Importers of bulk CO2, if total combined
imports of CO2 and other GHGs exceed 25,000 metric tons of
CO2 equivalent (CO2e) per year.
     Exporters of bulk CO2, if total combined
exports of CO2 and other GHGs exceed 25,000 metric tons
CO2e per year.
    This source category is focused on upstream supply. It does not
cover: Storage of CO2 above ground or in geologic
formations; use of CO2 in enhanced oil and gas recovery;
transportation or distribution of CO2; or purification,
compression, on-site use of CO2 captured on site, or
processing of CO2. This source category does not include
CO2 imported or exported in equipment, such as fire
extinguishers.
    Suppliers of CO2 that meet the applicability criteria in
the General Provisions (40 CFR 98.2) summarized in Section II.A of this
preamble must submit GHG reports.
    GHGs to Report. Suppliers of CO2 must report the mass of
CO2 in a stream captured from production process units and
extracted from production wells, and the mass of CO2 in
containers that is imported and exported.
    GHG Emissions Calculation and Monitoring. While this source
category is focused on upstream supply of CO2, EPA
recognizes that all CO2 supplied to the economy does not
necessarily result in an emission. There are a variety of downstream
applications for CO2--some applications are emissive and
some are non-emissive. Under this rulemaking, a CO2 supplier
facility must calculate the mass of CO2 supplied quarterly
by measuring the mass or volumetric flow of gas and multiplying by the
CO2 concentration, and density in the case a volumetric flow
meter is used, of the gas or liquid, as specified below. EPA requires
quarterly monitoring because EPA has concluded that the CO2
concentration of the stream varies throughout the year, and a quarterly
concentration number multiplied by a quarterly volume will generate
more accurate calculation of CO2 supply than annual
measurements. EPA requires these quarterly numbers to be reported so
that EPA can electronically verify the calculations. The CO2
supplier must also provide information on the downstream CO2
application, if known. Reporters must use the following methodologies,
as applicable, for calculating CO2 supplied:
     For suppliers that make measurements with mass flow
meters, calculate quarterly for each meter the total mass of
CO2 in a CO2 stream in metric tons, prior to any
subsequent purification, processing, or compressing, according to
Equation PP-1 of 40 CFR 98.423. Measure mass flow and concentration in
accordance with 40 CFR 98.424.
     For suppliers that make measurements with volumetric flow
meters, calculate quarterly for each meter the total mass of
CO2 in a CO2 stream in metric tons, prior to any
subsequent purification, processing, or compressing, according to
Equation PP-2 of 40 CFR 98.423. Measure volumetric flow, concentration
and density in accordance with 40 CFR 98.424.
     For suppliers that have multiple flow meters, aggregate
data according to methods specified in Equation PP-3 in 40 CFR 98.423.
     Importers or exporters that import or export
CO2 in containers must calculate the total mass of
CO2 supplied in metric tons, prior to any subsequent
purification, processing, or compressing, according to equation PP-4 of
40 CFR 98.423. Use weigh bills, scales, or load cells to measure the
mass of CO2 imported or exported in containers.
    Data Reporting. In addition to the information required to be
reported by the General Provisions (40 CFR 98.3(c)) and summarized in
Section II.A of this preamble, reporters must submit additional data
that are used to calculate CO2 supply. A list of the
specific data to be reported for this source category is contained in
40 CFR 98.426.
    Recordkeeping. In addition to the records required by the General
Provisions (40 CFR 98.3(g)) and summarized in Section II.A of this
preamble, reporters must keep records of additional data used to
calculate CO2 supply. A list of specific records that must
be retained for this source category is included in 40 CFR 98.427.
2. Summary of Major Changes Since Proposal
    The major changes since proposal are identified in the following
list. The rationale for these and any other significant changes can be
found below or in ``Mandatory Greenhouse Gas

Reporting Rule: EPA's Response to Public Comments, Subpart PP:
Suppliers of Carbon Dioxide.''
     We added equations and QA requirements to allow reporters
to determine CO2 quantity using volumetric flow meters,
weigh bills, scales, or load cells, as appropriate. These additions
supplement the proposed equations and quality assurance requirements to
determine CO2 quantity using mass flow meters.
     We revised the reporting procedures for missing data in 40
CFR 98.425. Facilities must use quarterly values as substitute data as
they can no longer use annual average values. We added missing data
procedures to allow for more quarterly data points to be used, as
appropriate. EPA concluded that quarterly missing data values will
generate more accurate estimates than annual average values.
     To improve the emissions verification process, we
reorganized and updated 40 CFR 98.426. We moved some data elements from
40 CFR 98.427 to 40 CFR 98.426, and added some data elements that a
reporter must already use to calculate GHGs as specified in 40 CFR
98.423 to 40 CFR 98.426 for clarity.
     We revised the reporting and calculation procedures to
require facilities using flow meters to determine annual mass for every
flow meter used. To aggregate data at the facility level for
CO2 being captured in production wells or production process
units, we have added Equation PP-3.
     To decrease unnecessary sampling burden, we have removed
the requirement of quarterly concentration sampling for importers and
exporters that use containers of CO2.
3. Summary of Comments and Responses
    This section contains a brief summary of major comments and
responses. A large number of comments on suppliers of CO2
were received covering numerous topics. Responses to significant
comments received can be found in ``Mandatory Greenhouse Gas Reporting
Rule: EPA's Response to Public Comments, Subpart PP: Suppliers of
Carbon Dioxide.''
Definition of Source Category
    Comment: EPA received many comments about how we defined the source
category in this Subpart. One group of comments stated that the
CO2 supplied to the economy should not be characterized as
an emission. Some in this group of comments specified that much of the
supplied CO2 is stored at enhanced oil recovery (EOR) sites,
which are ``closed systems'', rather than emitted. In general, these
same commenters stated that any CO2 reporting requirements
placed by EPA on industry should be placed on downstream CO2
users, such as EOR facilities, rather than CO2 suppliers and
should be for actual emissions only. Other comments echoed that EPA
needs to collect data from recipients of supplied CO2 such
as EOR sites. This group pressed upon EPA the need to collect not only
data on actual emissions but also data on injection, production, and
geologic sequestration of CO2. Some of the benefits cited
for collecting such comprehensive data include: Assisting in ensuring
no more than negligible releases at a facility if it is properly sited,
designed, and permitted; achieving full public accountability of
CO2 geologic sequestration effectiveness; and tracking the
CO2 throughout the entire carbon dioxide capture and
sequestration (CCS) chain for the purposes of adjusting CO2
emissions reported or assigning offsets. Along those lines, some
commenters urged EPA to rely on or expand the existing underground
injection control (UIC) program to deal with CCS.
    Response: EPA did not intend to characterize all CO2
supplied to the economy as emissions and recognizes that there are a
variety of applications for CO2, both emissive and non-
emissive. CO2 supplied to the economy would result in an
emission if the CO2 were used in an application which would
ultimately result in release of the CO2 to the atmosphere.
EPA is also collecting information from upstream suppliers in other
subparts of this rulemaking such as natural gas supply and petroleum
product supply.
    EPA recognizes that, in order to determine whether or not supplied
CO2 has been or will be released to the atmosphere (e.g.,
emitted), the Agency needs information on the downstream CO2
end-use. In today's final rulemaking, CO2 suppliers must
provide information on the downstream CO2 application, if
known. EPA believes information on the end-use will provide some idea
of the amounts of CO2 which are emitted. Where that end-use
is geologic sequestration (at EOR or other types of facilities), EPA
will need additional information on the amount of CO2 that
is permanently and securely sequestered and on the monitoring and
verification methodologies applied. With respect to EOR, the geology of
an oil and gas reservoir can create a good barrier to trap
CO2 underground. Because these formations effectively stored
oil or gas for hundreds of thousands to millions of years, it is
believed that they can be used to store injected CO2 for
long periods of time. However, EPA also recognizes that the
requirements to identify a suitable GS site extend beyond geophysical
trapping parameters alone and include: The evaluation and appropriate
management of potential leakage pathways, appropriate rate and pressure
of injection, appropriate monitoring, and other such features. While
some amount of CO2 injected into oil and gas reservoirs for
EOR purposes will be trapped in the subsurface, these and other site-
specific elements influence the amount of CO2 securely
sequestered and the potential for release of CO2 during EOR
operations.
    Given the comments in support of downstream data collection,
particularly with respect to EOR systems and CO2 geologic
sequestration (at EOR or other types of facilities), EPA plans to issue
a new proposal on geologic sequestration and will consider how to
address emissions and sequestration at active EOR facilities. EPA will
take action on this issue in the near future with the goal that data
collection for these types of facilities can begin as quickly as
possible. EPA will seek comment on monitoring, reporting, and
verification methodologies which can be used to determine the amount of
CO2 emitted and geologically sequestered at active EOR
facilities and geologic sequestration sites where CO2 is
injected (for long-term storage) into saline aquifers, oil and gas
reservoirs, or other geologic formations. Furthermore, as stated in
Section III.W of this preamble, EPA plans to take additional time to
consider alternatives to data collection procedures and methodologies
in the proposed 40 CFR part 98, subpart W and will consider inclusion
of GHG reporting from other sectors of the oil and gas industry besides
those proposed for reporting in proposed 40 CFR part 98, subpart W. EOR
surface facility operations may be part of those considerations. The
data reported under subsequent regulatory actions and the data reported
under today's rulemaking will together enable EPA to understand the
amount of CO2 supplied, emitted, and sequestered in the
U.S., to carry out a wide variety of CAA provisions. The options that
we will have considered and the resulting recommended approaches will
be further fleshed out through a notice and comment process. See the
next comment response for a discussion of why EPA still needs to
collect CO2 supplier data in today's rulemaking even though
a new rulemaking on sequestration is planned.
    In response to comments that EPA should rely on or expand the UIC
program to address emissions of CO2,

that issue is outside the scope of this rulemaking. However, EPA agrees
that the UIC program and EPA's authority under the Safe Drinking Water
Act (SDWA) will provide a foundation for ensuring safe and effective
containment of CO2. However, SDWA is focused on permitting
sites for protection of ground and drinking water; the new proposal
discussed above will be designed to address issues related to the CAA.
EPA intends to harmonize CCS requirements across relevant statutory or
other programs in order to minimize any redundancy and any burden on
reporters. The reporting requirements in today's rulemaking for
CO2 suppliers and the reporting requirements in new
rulemaking for CO2 geologic sequestration sites will
complement each other and together they can be harmonized with
reporting requirements under the UIC proposed rulemaking. In a new CAA
rulemaking on geologic sequestration reporting, EPA will rely on UIC
permit requirements to the maximum extent possible. EPA will seek
comment on these issues and will also endeavor to issue a geologic
sequestration GHG reporting rule in the same time frame as it has
planned for the stand-alone UIC GS rulemaking.
    Comment: EPA received comments requesting information on how
CO2 supply will assist EPA in developing future climate
policy. Commenters stated that they do not believe CO2
supply data will provide EPA with useful information. Commenters stated
that data collection from CO2 suppliers does not fit within
EPA's mandate from Congress to measure upstream emissions only as
appropriate.
    Response: As discussed in Sections I.C and II.Q of this preamble,
EPA is collecting data from CO2 suppliers in today's rule to
carry out a wide variety of CAA provisions, as authorized broadly under
CAA Sections 114 and 208. For example, this data will enable EPA to
evaluate the appropriate action to take under section 103 regarding
non-regulatory strategies for pollution prevention. It will also inform
evaluation of possible CAA regulation of the supplier and/or recipient
of the CO2 Data on CO2 supply to the economy will
allow EPA to make a well informed decision about whether and how to use
the CAA to regulate facilities that capture, sequester, or otherwise
receive CO2 as an end-user.
    Though CO2 capture and geologic sequestration are
occurring now on a relatively small scale, CCS is expected to play a
major role in mitigating GHG emissions from a wide variety of
stationary sources. According to the Inventory of U.S. Greenhouse Gas
Emissions and Sinks: 1990-2007 (EPA, April 2009), stationary sources
contributed 67 percent of the total CO2 emissions from
fossil fuel combustion in 2007. The stationary sources represent a wide
variety of sectors amenable to CO2 capture; electric power
plants (existing and new), natural gas processing facilities, petroleum
refineries, iron & steel foundries, ethylene plants, hydrogen
production facilities, ammonia refineries, ethanol production
facilities, ethylene oxide plants, and cement kilns. Furthermore, 95
percent of the 500 largest stationary sources are within 50 miles of a
candidate CO2 reservoir.\22\
---------------------------------------------------------------------------

    \22\ Dooley, JJ, CL Davidson, RT Dahowski, MA Wise, N Gupta, SH
Kim, EL Malone, ``Carbon Dioxide Capture and Geologic Storage: A Key
Component of a Global Energy Technology Strategy to Address Climate
Change.'' Joint Global Change Research Institute, Battelle Pacific
Northwest Division. May 2006. PNWD-3602. College Park, MD.
---------------------------------------------------------------------------

    With this rule, EPA will begin building capacity to track the
growth in CO2 supply and learn about its disposition
throughout the economy. EPA has concluded that we need data now from
CO2 suppliers--both industrial facilities and CO2
production wells--in order to effectively track how the supply sources
will change over time. For example, we will need to track if and by how
much CO2 captured from industrial facilities will offset or
displace CO2 produced from natural formations. Even after
EPA begins collecting data on CO2 geologic sequestration
under the proposed new rulemaking (discussed above), EPA will continue
to need data from CO2 suppliers in order to track any
CO2 that is not sequestered.
    Comment: EPA received some comments asking whether a specific
situation results in coverage under 40 CFR part 98, subpart PP, and
some comments requesting that their specific situation be exempt from
coverage. For example, one commenter asked whether a facility
separating CO2 that is not supplied to downstream customers
is a covered facility. Another asked that a pulp and paper mill that
transfers a CO2 stream to an adjacent facility by pipeline
be exempt from 40 CFR part 98, subpart PP. Several commenters requested
clarification on specific scenarios such as taking ownership of an
already separated CO2 stream for further processing,
separating CO2 for their own use, and operating versus
owning the separation unit.
    Response: EPA did not intend for 40 CFR part 98, subpart PP to
cover facilities that take ownership of a CO2 stream that
has already been separated and removed from a manufacturing process or
that has already been extracted from CO2 production wells in
order to do any of the following: Store it in above ground storage of
CO2; transport or distribute it via pipelines, vessels,
motor carriers, or other means; purify, compress, or process it; or
sell it to other commercial applications. 40 CFR part 98, subpart PP
covers facilities that own or operate the equipment that physically
separates and removes CO2 from an industrial or
manufacturing process or physically extracts CO2 from
production wells because we concluded that the entity with first touch
of the CO2 supply was the most logical point of coverage. We
wanted to minimize any unnecessary duplicative reporting of the same
CO2 by being as specific as possible about who in the supply
chain is responsible for reporting it.
    We did not intend for this source category to include facilities
that capture CO2 for further processing or use within the
fence line of the facility (e.g., for their own use). EPA proposed that
40 CFR part 98, subpart PP only cover CO2 that is captured
or extracted for purposes of sequestration or supply to other
facilities for commercial applications because we concluded that
CO2 captured and used on-site is equivalent to an
intermediary step in production rather than an actual supply of
CO2.
    Comment: EPA received a comment requesting that ethanol plants and
other facilities capturing CO2 from biomass be exempt from
Subpart PP.
    Response: A long standing inventory convention adopted by the IPCC,
the UNFCCC, the US GHG Inventory, and many other reporting programs is
separate treatment of emissions of CO2 from the combustion
of biomass and biomass-based fuels from emissions of CO2
from the combustion of fossil-based products. In national inventories,
emissions from the combustion of biomass-based fuels are accounted for
as part of a comprehensive system-wide tracking of carbon dioxide
emissions and sequestration in the land-use, land-use change and
forestry sector and the agriculture sector, rather than at the point of
fuel combustion. Consistent with this approach, in the proposed and
final rule, downstream emitters must only consider non-biogenic
emissions when conducting a threshold analysis; however, downstream
emitters must report both biogenic and non-biogenic emissions once they
trigger the reporting threshold because data on non-biogenic emissions
is useful and informative.
    For the final rule, EPA has decided not to apply the same approach
to

suppliers of CO2. We have concluded that data on capture of
biogenic CO2 would be useful and informative because
biogenic CO2 can potentially be stored in GS sites, or
displace fossil CO2 applications. We need a full picture of
the CO2 being supplied into the economy. Though
CO2 capture and sequestration is occurring now on a
relatively small scale, it is expected to play a major role in
mitigating GHG emissions. Therefore information on all potential
sources of CO2 for sequestration is necessary for a complete
picture. Thus, a facility that captures CO2 from biomass and
otherwise meets the applicability test is covered under 40 CFR part 98,
subpart PP and is required to report all CO2 supplied along
with the percentage of that supply that is biomass-based.
Monitoring and QA/QC Requirements
    Comment: A large number of commenters requested that volumetric
flow meters be allowed for purposes of calculating CO2
supply in place of or in addition to mass flow meters. These comments
indicated that mass flow meters are not in operation at many covered
facilities, and the cost to comply with such an equipment requirement
would be unnecessarily high. Some commenters suggested that reporters
should be allowed to use sales contracts to determine quantity of
CO2 as long as the CBI is protected. Some commenters
indicated that CO2 liquefaction and purification facilities
do not operate flow meters for the course of usual business. One of
these also commented that importers and exporters of CO2 do
not operate flow meters for the course of usual business if they handle
the product in containers and requested consideration of this
incongruity.
    Response: As a result of these comments, EPA added two equations to
the methodology section of 40 CFR part 98, subpart PP in today's rule
in order to ensure that all covered CO2 can be reported,
irrespective of technical or physical conditions. Therefore, a reporter
that measures CO2 in a stream using a volumetric flow meter
may use this volumetric flow meter to determine quantity rather than
having to purchase and install a mass flow meter. EPA has concluded
that providing this additional methodology reduces the burden on
reporters without compromising the quality of data received by the
agency. In addition, a reporter that imports or exports CO2
in containers may use weigh bills, scales, or load cells to determine
quantity because applying a mass flow meter would be technically
impossible. EPA has concluded that providing this additional
methodology reduces the burden on reporters without compromising the
quality of data received by the agency.
    The final rule does not require reporting from facilities that
liquefy or purify CO2 that has already been separated or
removed from a manufacturing process or already extracted from
production wells. Therefore we did not give consideration to the types
of equipment in operation at such facilities.
    Finally, the rule does not allow reporters to use sales contracts
to determine quantity because EPA has concluded that reporters
capturing or extracting CO2 already operate mass or
volumetric flow meters, or already determine quantities of
CO2 imported or exported in containers using weigh bills,
scales, or load cells. EPA has concluded that mass and volumetric flow
meters provide more accurate data than sales contracts.

IV. Mobile Sources

A. Summary of Requirements of the Final Rule

    For manufacturers of engines used in mobile sources outside of the
light-duty sector,\23\ this rule includes new requirements for
reporting emission rates of GHGs.\24\ Mobile source engine
manufacturers have been measuring CO2 emission rates from
their products for many years as a part of normal business practices
and existing criteria pollutant emission certification programs, but
they have not consistently reported these values to EPA. This final
rule requires manufacturers to consistently measure and report
CO2 for all engines beginning with model year 2011 and other
GHGs in subsequent model years.\25\ Manufacturers meeting the
definitions of ``small business'' or ``small volume manufacturer''
under EPA's existing mobile source emissions regulations will generally
be exempt from any new GHG reporting requirements.\26\
---------------------------------------------------------------------------

    \23\ Manufacturers of light-duty vehicles, light-duty trucks,
and medium-duty passenger vehicles are not covered in this final
rule.
    \24\ The term ``manufacturer,'' as well as the term
``manufacturing company,'' as used in this preamble, means companies
that are subject to EPA emission certification requirements. This
primarily includes companies that manufacture engines domestically
and foreign manufacturers that import engines into the U.S. market.
In some cases this also includes domestic companies that are
required to meet EPA certification requirements when they import
foreign-manufactured engines.
    \25\ For aircraft engine manufacturers, reporting requirements
will apply for the engine models in production in 2011.
    \26\ Small business manufacturers will continue to be subject to
measurement and/or reporting requirements for compliance with
existing regulations.
---------------------------------------------------------------------------

    In addition to CO2, most manufacturers will now be
required to report on two other major GHGs emitted by mobile sources,
nitrous oxide (N2O) and methane (CH4). Although
most current engines have relatively low emission rates of these GHGs
compared to CO2, these compounds have global warming
potentials significantly higher than CO2. It is important
that EPA improve its understanding of these emissions from today's
engines and monitor trends over time. The broad base of emission data
that will begin to accrue from requirements in this rule will support
emissions modeling by EPA and others, and will help guide future GHG
policy.
    Emissions of N2O are related to catalytic treatment of
engine exhaust, specifically aftertreatment of NOX
emissions. Therefore, we will require that manufacturers begin to
measure and report N2O emissions, but only for engine models
that incorporate NOX aftertreatment technology (as shown in
Table IV-1 of this preamble). The program will not require
N2O reporting before model year 2013, and the requirements
will only apply to new engines equipped with NOX
aftertreatment technology. (Manufacturers of some engine categories
have employed aftertreatment for many years to meet NOX
standards; for other engine categories, manufacturers are unlikely to
introduce NOX aftertreatment technologies for some years to
come.)
    Emissions of CH4 are a part of overall hydrocarbon
emissions from mobile sources. Because CH4 is not very
reactive in the atmosphere, EPA has often excluded CH4 from
mobile source hydrocarbon regulations since it has not traditionally
been a major determinant of ozone formation.\27\ The new reporting
requirements are necessary to evaluate the magnitude of mobile source
CH4 emissions from a GHG (rather than ozone precursor)
perspective.
---------------------------------------------------------------------------

    \27\ But see Ford Motor Co. v. EPA, 604 F. 2d 685 (D.C. Cir.
1979) (permissible for EPA to regulate CH4 under CAA
section 202 (b)). In addition, although CH4 is not itself
regulated, manufacturers subject to ``non-methane hydrocarbon''
standards have needed to determine CH4 emission levels,
in some cases by using a default value and in many cases by way of
testing.
---------------------------------------------------------------------------

    As described above, we are finalizing manufacturer reporting
requirements for N2O and CH4 emission rates in
order to understand current emissions of these GHGs and to monitor
potential changes as technologies and policies change in the future.
However, we believe that manufacturers may be able to provide

alternative test data (and/or other information including engineering
judgments based on test data) that would give EPA a reasonable basis
for estimating the likely N2O and CH4 emission
rates for each certified engine family. Therefore, we are including a
provision in this final rule that would allow a manufacturer the
opportunity to provide such alternative information in lieu of
N2O and/or CH4 test data for each engine family.
    In assessing such alternative information, EPA would consider how
well the information provided by the manufacturer allows EPA to
reasonably anticipate the emission performance of each of the
manufacturer's engines. For example, we expect that in most cases a
manufacturer wishing to omit engine testing will provide EPA with
N2O test data from relevant testing programs (by such
sources as industry collaboratives and/or from the suppliers of the
catalytic NOX aftertreatment systems they are using on an
engine. We would expect the manufacturer to also include an explanation
of the manufacturer's engineering judgment as to why the data should
apply to the engine family in question. For CH4 emissions,
our primary concern is the potential for unusually high emissions from
natural gas fueled engines. Thus, we expect that in most cases a
manufacturer of such an engine will provide test data on similar
engines with similar catalyst systems for hydrocarbon control (with an
explanation of their engineering judgment as to why the data should
apply to that engine family).
    The reporting requirements related to C3 marine engines and
turbofan and turbojet aircraft engines differ from other engine
categories. As with other manufacturers, C3 marine engine and aircraft
engine manufacturers will report CO2 emission rates
beginning in 2011 (for aircraft engines, they will report
CO2 separately for each mode of the landing and take-off
(LTO) cycle used in the certification test, as well as the entire LTO
cycle). For aircraft engine manufacturers, however, the reporting
requirements will apply not just to engines introduced in that year,
but for all engines still in production. (This should not require
manufacturers to conduct any new testing, only to report existing
data.) We are not requiring manufacturers of C3 marine engines and
aircraft engines to measure or report N2O or CH4
emission rates because of unique aspects of their industries and
technologies.
    C3 marine engines are very large and manufacturers generally test
them as they are installed into ships rather than in a laboratory
setting. For this reason, we have determined that requiring the
addition of new N2O and CH4 measurement equipment
for C3 engines would not be practical, and, as proposed, are not
requiring such reporting in this rule.
    Since aircraft engine manufacturers are unlikely to employ
NOX after treatment devices in the foreseeable future, we
did not propose requiring N2O reporting from aircraft
engines and are not finalizing any requirements in this final rule. We
are not finalizing our proposed requirement that aircraft engine
manufacturers measure and report CH4, as we learned that
aircraft jet turbine engines have been shown to consume CH4
from the ambient air during the dominant operating modes.\28\ However,
unlike NOX emissions from most mobile sources,
NOX emissions from aircraft have been shown to make a
potential contribution to climate change.\29\ For this reason, we are
requiring that aircraft engine manufacturers report the NOX
emission data for the LTO modes and the overall LTO cycle for all
engine models currently in production, and for new engines as they are
introduced. Manufacturers are already measuring NOX as part
of current criteria pollutant certification requirements.
NOX emissions rate data from LTO modes will support modeling
of overall NOX emissions from aircraft.
---------------------------------------------------------------------------

    \28\ Aerodyne, Rich Miake-Lye, AAFEX Methane presentation at the
Seventh Meeting of Primary Contributors for the Aviation Emissions
Characterization Roadmap, June 9-10, 2009.
    \29\ IPCC, Aviation and the Global Atmosphere, 1999, at http://
www.grida.no/climate/ipcc/aviation/index.htm, and NOAA, Written
Testimony of Dr. David W. Fahey, Hearing on ``Aviation and the
Environment: Emissions,'' Before the Committee on Transportation and
Infrastructure, Subcommittee on Aviation, U.S. House of
Representatives, May 6, 2008.
---------------------------------------------------------------------------

    For all engine categories, when a manufacturer certifies the engine
in one year and then carries over the certification to subsequent
years, EPA will not require re-testing of that engine model for
reporting purposes.
    As proposed, we are not including any requirements for mobile
source fleet operators or State and local governments to report in-use
travel activity or other emissions-related data in this final rule.
    Table IV-1 of this preamble shows the basic reporting requirements
we are finalizing in this notice for each engine category. We discuss
in more detail how these reporting requirements will apply to
manufacturers of each engine category in ``Mandatory Greenhouse Gas
Reporting Rule: EPA's Response to Public Comments, Motor Vehicle and
Engine Manufacturing.''

                           Table IV-1--First Model Year for GHG Reporting Requirements
----------------------------------------------------------------------------------------------------------------
           Engine category                   CO2                         N2O\a\                         CH4
----------------------------------------------------------------------------------------------------------------
Highway Heavy-Duty (engine and                   2011  2013 or NOX AT...........................            2012
 vehicle).
Nonroad Diesel.......................            2011  2013 or NOX AT...........................            2012
Marine Diesel (other than C3)........            2011  2013 or NOX AT...........................            2012
C3 Marine............................            2011  None.....................................            None
Locomotives..........................            2011  2013 or NOX AT...........................            2012
Small Spark-Ignition.................            2011  2013 or NOX AT...........................            2012
Large Spark-Ignition.................            2011  2013 or NOX AT...........................            2012
Marine Spark-Ignition................            2011  2013 or NOX AT...........................            2012
Snowmobiles..........................            2011  2013 or NOX AT...........................            2012
Highway Motorcycles..................            2011  2013 or NOX AT...........................            2012
Off Highway Motorcycles/ATVs.........            2011  2013 or NOX AT...........................            2012
Aircraft \b\.........................            2011  None.....................................            None
----------------------------------------------------------------------------------------------------------------
\a\ N2O reporting for new engines begins in 2013 or when the manufacturer introduces NOX aftertreatment
  technology, whichever is later.
\b\ Applies to all turbofan and turbojet engines in production in 2011 with a rated output greater than 26.7
  kilonewtons. Reporting of NOX also required.

B. Summary of Major Changes Since Proposal

    The major changes since proposal are identified in the following
list. The rationale for these and any other significant changes can be
found below or in ``Mandatory Greenhouse Gas Reporting Rule: EPA's
Response to Public Comments, Motor Vehicle and Engine Manufacturers.''
     We are not finalizing the proposed requirements related to
light-duty vehicles (including light-duty trucks and medium-duty
passenger vehicles). EPA expects to propose a comprehensive light-duty
GHG emission control program commencing in MY 2012 (see Notice of
Upcoming Joint Rulemaking to Establish Vehicle GHG Emissions and CAFE
Standards, 74 FR 24007 (May 22, 2009)), which is likely to contain
monitoring, reporting and GHG data retention requirements that would
supersede any reporting requirements established in this rule.
Eliminating light-duty reporting requirements from this final rule will
avoid issues of inconsistency and duplication.
     We have revised our proposal that all engine manufacturers
measure and report N2O for all of their engines, and instead
will require N2O reporting only for engines that use
NOX exhaust aftertreatment technology.
     We have delayed the proposed MY 2011 start year for
N2O reporting until MY 2013, and later for categories where
the manufacturer has not applied NOX aftertreatment
technology.
     We have added additional emission test methods that
manufacturers can choose for measuring N2O, to assure that
an appropriate method is available for any foreseeable circumstance
(including the need to measure very low N2O emission rates).
     The final rule incorporates an opportunity for a
manufacturer to provide EPA with appropriate alternative information in
lieu of N2O and/or CH4 testing, as described
above.
     We have added one year of lead time to the proposed start
year for reporting of CH4 emissions, until 2012.
     We are not finalizing our proposal to require reporting of
CH4 for aircraft engines because, for the dominant operating
modes, jet engines may consume CH4 in the air.
     We are finalizing a requirement that we took comment on in
the proposal to have aircraft engine manufacturers report
NOX emissions data they already collect, since, at altitude,
NOX emissions from aircraft have been shown to make a
potential contribution to climate change.
     Since aircraft engines are not certified every year (there
is no annual certification as is the case with other mobile sources),
we have removed references to ``model year'' in the regulations and
revised them to reflect the change to a January 1, 2011 start date for
reporting CO2 and NOX emissions.

C. Summary of Comments and Responses

    This section contains a brief summary of major comments and
responses. A large number of comments on mobile source were received
covering numerous topics. Responses to significant comments received
can be found in ``Mandatory Greenhouse Gas Reporting Rule: EPA's
Response to Public Comments, Motor Vehicle and Engine Manufacturers.''
    Comment: Light-duty vehicle manufacturers and their trade
organizations raised several concerns about the timing and nature of
the reporting requirements.
    Response: We agree in part with these comments. However, more
fundamentally, we have concluded that the likelihood of GHG emission
regulations affecting light-duty vehicles (including light-duty trucks
and medium-duty passenger vehicles) in the near future argues for
consolidating any new GHG reporting requirements into that upcoming
rule. Therefore, we have elected to not finalize the proposed
requirements relating to these vehicles at this time, and expect to
incorporate similar provisions in a proposed rule on GHG standards for
light-duty vehicles in the near future.
    Comment: Engine manufacturers and their trade organizations
challenged the proposed rule in several ways. In general, they
questioned the need for the data to be reported; expressed concern that
the proposed timing of the requirements, especially for N2O
and CH4, was too aggressive; and commented that the proposed
test procedure for N2O was not adequate.
    Response: We still conclude that there is significant value to
collecting CO2, N2O, and CH4 emissions
rate data on the broad range of mobile sources being produced. As
stated earlier, the domestic and international attention to GHGs and
their effects will only grow, and the ability for EPA and the public to
understand and monitor emissions from mobile sources will be
increasingly important as policies relating to GHGs are considered.
Collecting emissions rate data from engine manufacturers on their new
engines can improve modeling of emissions for the entire mobile source
sector since current modeling relies on assumptions about
N2O and CH4 emissions based on a limited number
of field surveys. The data from this rule will also help EPA track
emissions impacts from changes in technologies and policies over time.
    For N2O and CH4, we agree that revisions in
the proposed provisions are warranted. We have limited the reporting
requirements for N2O to engines equipped with NOX
aftertreatment technology as a way to reduce the reporting burden on
engine manufacturers without significantly diminishing the amount of
information we receive. As discussed earlier, emissions of
N2O are related to catalytic treatment of engine exhaust,
specifically aftertreatment of NOX emissions, and we have
concluded that collecting N2O emissions data from engines
without NOX aftertreatment technology would provide marginal
value to the agency. We expanded the number of approved test methods
for N2O measurement since we learned from comments and our
own technical research that our proposed test methods for
N2O were not appropriate for every foreseeable circumstance,
including measurement of very low levels of N2O. We also
extended the lead time available to manufacturers before N2O
and CH4 reporting is required. We are providing this
flexibility based on our conclusion that we can reduce the burden of
purchasing and installing the required CH4 and
N2O emissions rate measurement equipment by extending the
lead time, without significantly diminishing the amount of information
we receive. Finally, as described above, the final rule includes an
opportunity for a manufacturer to provide EPA with appropriate
alternative information in lieu of N2O and/or CH4
testing.
    Comment: States and environmental organizations were generally
supportive of the proposed reporting requirements, although some argued
for earlier implementation, in 2010.
    Response: We believe that the lead times we are finalizing for each
GHG and for each engine category represent the earliest feasible
timing, taking into consideration existing test capabilities and past
experience, or the lack thereof.
    Comment: Aircraft engine manufacturers commented that reporting of
CO2 emissions from each mode of the LTO \30\ cycle used in
the emission certification test, as proposed, is acceptable as long as
existing methods for CO2 are retained. In particular,
commenters noted that reporting would result in minimal

burden as long as CO2 is calculated utilizing the engine
fuel mass flow rate measurements, which are currently part of the test
procedure requirements for the LTO cycle. However, an industry trade
association expressed concern that reporting CO2 from the
LTO cycle is unjustified because LTO measurements do not include
CO2 emissions from an entire aircraft flight, which is
affected by the propulsion system, drag, etc.
---------------------------------------------------------------------------

    \30\ Modes of the landing and takeoff cycle are taxi/idle,
takeoff, climb out, and approach.
---------------------------------------------------------------------------

    Response: We determined that calculating aircraft engine
CO2 emissions from fuel mass flow rate measurements is an
appropriate method for reporting CO2 emissions. Therefore,
for turbofan and turbojet engines of rated output greater than 26.7
kilonewtons, we are finalizing that manufacturers report CO2
separately for each mode of the LTO cycle by calculation of
CO2 from fuel mass flow rate measurements or, alternatively,
according to the measurement criteria for CO2 in Appendices
3 and 5 to ICAO Annex 16, volume II. Comprehensive and consistent
reporting of LTO CO2 emissions, along with knowledge of
aircraft aerodynamic performance, will support modeling of full-flight
CO2 emissions and help us to better understand overall
contributions to global warming from aircraft operations.
    Comment: Aircraft engine manufacturers raised two major issues
related to our proposed CH4 reporting. First, in response to
EPA's request for comment on the degree to which engine manufacturers
now have the needed equipment in their certification test cells to
measure CH4, manufacturers replied that test stands are not
currently equipped to measure CH4, and thus, they would
incur additional costs to measure CH4. Second, manufacturers
noted that aircraft jet turbine engines have been shown to be consumers
of CH4 from the ambient air during the dominant operating
modes (CH4 is emitted at aircraft engine idle operation, but
at higher power modes aircraft engines usually consume CH4.
Over the range of engine operating modes--including cruise--aircraft
engines are typically net consumers of CH4).
    Response: Given that aircraft engines are likely net consumers of
CH4 and that manufacturers do not currently collect
CH4 data as part of existing test procedures, we are not
requiring CH4 to be measured and reported at this time.
    Comment: We received several responses to our request for comment
on whether to require aircraft engine manufacturers to report
NOX emissions in the four LTO test modes and for the overall
LTO cycle. Manufacturers commented that NOX emissions do not
need to be reported directly to EPA, since this information is already
voluntarily reported to the International Civil Aviation Organization
(ICAO) and provided to the Federal Aviation Administration (FAA), and
redundancy of reporting is unnecessary. Environmental organizations
commented that EPA should require manufacturers to report
NOX since they currently do not report the data to EPA. In
addition, environmental organizations commented that NOX at
high altitude can contribute to global warming.
    Response: In this final rule, we are requiring that engine
manufacturers of turbofan and turbojet engines of rated output greater
than 26.7 kilonewtons record and report NOX emissions in the
four LTO test modes and for the overall LTO cycles. As discussed in the
proposal and earlier in this final rule, NOX from aircraft
have been shown to make a potential contribution to climate change at
high altitude. As required in 40 CFR part 87, manufacturers must
already measure and record NOX emissions in each of the four
LTO test modes in order to comply with the LTO NOX emission
standard (for the entire LTO cycle). These data are not currently
reported to EPA for public consideration as is the case with all other
mobile sources. Manufacturers voluntarily report the data to ICAO, but
there is no assurance that EPA will receive this information. Likewise,
the information provided to FAA is not readily accessible to EPA, and
it is not of the detail provided to ICAO. Comprehensive and consistent
reporting of LTO NOX emissions rate data will support
modeling of overall NOX emissions from aircraft and help us
to better understand overall contributions to global warming from
aircraft operations.

V. Collection, Management, and Dissemination of GHG Emissions Data

    This section of the preamble describes the general processes by
which EPA intends to collect, manage, and disseminate data under the
GHG reporting rule. Section A contains a brief description of the
provisions in the final rule concerning these processes, and Section B
summarizes public comments and responses on data collection,
management, and dissemination.
    Major changes since proposal include revisions in 40 CFR 98.4 that
provide flexibility for designated representatives to delegate their
responsibility to agents, and to submit revisions to the certificate of
representation within 90 days of a change in owners or operators
(rather than 30 days). In addition, the final rule includes a
requirement that the designated representative submit the certificate
of representation at least 60 days before the deadline of the facility
or supplier's initial GHG report. The rationale for these and any other
significant changes can be found in Section V.B of this preamble or in
``Mandatory Greenhouse Gas Reporting Rule: EPA's Response to Public
Comments, Designated Representative, and Data Collection, Reporting,
Management, and Dissemination.''

A. Summary of Data Collection, Management and Dissemination for the
Final Rule

1. Designated Representatives, Alternate Designated Representatives,
and Agents
    Each covered facility and each supplier must identify one and only
one designated representative who is responsible for certifying,
signing, and submitting all submissions to EPA. A designated
representative must certify and sign a submission, in accordance with
the final rule, before it is considered a complete submission.
    The designated representative also serves as a single point of
contact for EPA to provide information about the program or a
submission or to ask questions about a submission. Those facilities
submitting any other emission report under 40 CFR part 75, for example,
ARP facilities, must use the same designated representative for
certifying, signing and submitting all submissions and reports under
this rule.
    Each covered facility or supplier may also identify one alternate
designated representative to act in lieu of the designated
representative. The alternate designated representative can perform the
same duties as the designated representative, but the designated
representative is responsible for ensuring the appropriate information
is submitted to EPA by the timelines specified in the rule.
    A designated representative or alternate designated representative
may delegate the submission of information to one or more ``agents.''
The agent can make electronic submissions to EPA, but is not allowed to
certify or sign a submission. By delegating to an agent the ability to
make electronic submissions to EPA, a designated representative or
alternate designated representative agrees that a submission to EPA by
the agent is deemed to be a submission that is certified, signed, and
submitted by such designated representative or alternate designated
representative.

2. Certificate of Representation
    A designated representative must submit a certificate of
representation that identifies the owners and operators of the facility
or supplier, the designated representative, any alternate designated
representative, and other information as specified in 40 CFR 98.4. EPA
will establish an electronic data reporting system that provides for
the submission of initial, as well as subsequently signed, certificates
of representation.
    In order to ensure sufficient processing time before a facility or
supplier's initial GHG report under this part, EPA is requiring that
the designated representative submit a certificate of representation at
least 60 days before the deadline for the initial GHG report.
3. Data Collection
    Methods. If a reporting entity already reports GHG emissions data
to an existing EPA program, the Agency will make efforts to minimize
any additional burden on the reporter when developing the reporting
system for the final rule. Some existing programs, however, have data
collection and reporting requirements that are inconsistent with the
requirements for the mandatory GHG reporting rule. When it is not
feasible to adapt an existing program to collect the appropriate GHG
data and supplemental data, EPA will require reporters to submit the
data required by the mandatory GHG reporting rule to the new data
reporting system for this rule. Such reporters would also continue to
submit data to the existing reporting systems for other applicable
programs as required by those programs.
    Reporters may fall into one or more categories:
    (1) Reporters that use existing data collection and reporting
methods and will not be required to report separately to the new data
reporting system for the GHG reporting rule.
    (2) Reporters that use existing data collection and reporting
methods but will be required to report the data separately to the new
data reporting system for the GHG reporting rule.
    (3) Reporters that are not currently required to collect and report
GHG emissions data to EPA and will be required to report using the new
data reporting system for the mandatory GHG reporting rule.
    For categories (2) and (3), EPA is developing a new system for
reporters to submit the required data. The detailed data elements that
must be reported are specified in the rule. In general, reporters using
this new system must report annually to the Agency according to the
schedule specified in 40 CFR 98.3(b).
    Data Submission. The Designated Representative (described in 40 CFR
98.4) must use an electronic signature device (for example, a personal
identification number (PIN) or password) to submit a report. If the
Designated Representative holds an electronic signature device that is
currently used for valid electronic signatures accepted under another
Agency program, we intend to design the new reporting system to also
accept valid electronic signatures executed with that device where
feasible. (See 40 CFR 3.10 and the definitions of ``electronic
signature device'' and ``valid electronic signature'' under 40 CFR
3.3.)
    Unique Identifiers for Facilities and Units. The Agency's reporting
format for a given reporting year could make use of several ID codes--
unique codes for a unit or facility. To ensure proper matching between
databases, e.g., EPA-assigned facility ID codes and the Office of
Regulatory Information Systems (ORIS) (DOE) ID code, and consistency
from one reporting year to the next, we plan for the reporting system
to provide each facility with a unique identification code to be
specified by the Administrator.
    Reporting Emissions in a Single Unit of Measure. To maintain
consistency with existing State-level and Federal-level GHG programs in
the U.S. and internationally, all emission measurements must be
reported in the SI, also referred to as metric units. Data used in
calculations and supplemental data for QA could still be submitted in
English weights and measures (e.g., mmBtu/hr) but the specific units of
measure must be included in the data submission. All emissions data
must be submitted to the Agency in kg or metric tons per unit of time.
    Conversion of Emissions to CO2e. Reporters must submit the quantity
of each applicable GHG emitted (or other metric such as quantities
supplied for industrial GHG suppliers) in two forms. The data will be
in the form of quantity of the gas emitted (e.g., metric tons of
N2O) per unit of time and CO2e emissions per unit
of time.
    Delegation of Authority to State Agencies to Collect GHG Data.
Reporters must submit the emissions data and supplemental data directly
to EPA. At this time, EPA does not intend to delegate the authority to
collect data to State or local agencies.
    Submission Method. All entities covered by this rule must report in
an electronic format to be specified by the Administrator. The
electronic format, which will reflect the underlying electronic data
reporting system, will be developed prior to the first reporting date.
By specifying in the rule text the exact information that must be
reported but not specifying the exact reporting format, EPA informs
reporters about exactly what information they must report and has
flexibility to modify the electronic reporting format and electronic
data reporting system in a timely manner based on implementation
experience and new technology. EPA has used this approach successfully
in existing programs, such as the ARP and the Title VI Stratospheric
Ozone Protection Program, facilitating the deployment of new reporting
formats and reporting systems that take advantage of technologies such
as, eXtensible Markup Language (XML), and reducing the burden on
reporters and the Agency. The electronic reports submitted under this
rule are subject to the provisions of 40 CFR part 3, specifying EPA
systems to which electronic submissions must be made and the
requirements for valid electronic signatures.
4. Data Management
    QA Procedures. The new reporting system will include automated
checks for data completeness, data quality, and data consistency. Such
automated checks are used for many other Agency programs (e.g., ARP).
    Providing Feedback to Reporters. EPA has established a variety of
mechanisms under existing programs to provide feedback to reporters who
have submitted data to the Agency. EPA will consider the approaches
used by other programs (e.g., electronic confirmations, results of QA
checks) and develop appropriate mechanisms to provide feedback to
reporters for the GHG reporting rule when we develop the electronic
data reporting system. Regardless of data collection system specifics,
the goal is to ensure appropriate transparency and timeliness when
providing feedback to reporters who submitted data.
5. Data Dissemination
    Public Access to Emissions Data. The Agency plans to publish data
submitted or collected under this rulemaking through EPA's Web site,
reports, and other formats (e.g., XML), with the exception of any
confidential business information (CBI) data. For further discussion of
CBI, see Section II.R of this preamble.
    EPA will disseminate data after the reporting deadline. The Agency
recognizes the high level of public interest in this data and plans to
disclose it in a timely manner, while

also assuring completeness and accuracy.
    Sharing Emission Data with Other Agencies. There are a growing
number of programs at the State, Tribe, Territory, and local level that
require emission sources in their respective jurisdictions to monitor
and report GHG emissions. In order to be consistent with and supportive
of these programs and to reduce burden on reporters and program
agencies, EPA plans to share emissions data, with the exception of any
CBI data, with relevant agencies or approved entities using, where
practical, common data exchange standards and infrastructure.

B. Summary of Comments and Responses on Collection, Management, and
Dissemination of GHG Emissions Data

    This section contains a brief summary of major comments and
responses. A large number of comments on data collection, management,
and dissemination were received covering numerous topics. Responses to
significant comments received can be found in ``Mandatory Greenhouse
Gas Reporting Rule: EPA's Response to Public Comments, Designated
Representative and Data Collection, Reporting, Management, and
Dissemination.''
1. Designated Representatives, Alternative Designated Representatives,
and Agents

Designated Representatives

    Comment: Several commenters requested that EPA use the ARP
definition for designated representatives to maintain consistency
across the two EPA programs and provide more flexibility regarding who
can be a designated representative. Other commenters requested that EPA
use the responsible official definition from Title V or senior
management official from TRI to maintain consistency with those
programs. Other commenters raised concerns over the employment status
of designated representatives.
    Comment: A commenter noted that rule language was inconsistent in
defining the relationships between designated representatives,
facilities and suppliers, and owners and operators.
    Response: EPA agrees that owners and operators should have more
flexibility to identify a designated representative, including third-
party representatives. EPA is striking the language requiring the
designated representative to be a person responsible for the overall
operation of the facility or supplier. Further, EPA is not requiring
the use of a responsible official or senior management official because
either approach would be more restrictive than the designated
representative definition of the final rule. EPA believes that the
proposed rule was neutral with respect to the employment status of the
designated representative. The final rule provides flexibility for the
owners and operators to choose any individual, employee or non-
employee, to represent them. EPA modified the rule to clarify that each
facility and each supplier shall have one and only one designated
representative and that the designated representative must be
authorized by binding agreement of the owners and operators.

Agents

    Comment: Several commenters requested that EPA allow designated
representatives and alternate designated representatives the option of
delegating their responsibility to prepare and submit reports to EPA to
a preparer or agent. Commenters also stated that the designated
representative requirement is inconsistent with Title V reporting.
    Response: EPA agrees that it is beneficial to give the designated
representatives and alternate designated representatives flexibility
concerning who prepares the reports that they are responsible for
submitting. The final rule does not specify who must prepare reports,
but only specifies who must certify, sign, and submit them. EPA also
agrees that flexibility should be provided concerning who actually
submits the reports, similar to the flexibility provided in the ARP.
This flexibility was implied in the provision in the proposed rule that
reports be submitted ``in a format specified by the Administrator,''
which format has included, in other programs such as the ARP, the
ability to use agents. However, EPA decided to make this flexibility
explicit by including in the rule provisions allowing and setting
requirements for agents selected by designated representatives or
alternate designated representatives. The structure of designated
representative, alternate designated representative and agent fits a
wide range of circumstances from large companies to small, including
those accustomed to reporting under Title V.

Certification Statement

    Comment: Several commenters described the self-certification
procedures in the proposed rule as too restrictive or suggested that
the rule should be consistent with requirements of the Title V or TRI
program. For example, the rule's requirement that the designated
representative certify that they have ``personally examined'' the data
should be replaced by the Title V requirement that a responsible
official certify that they have made a ``reasonable inquiry'' as to the
accuracy of the data.
    Response: EPA believes that the high level of public interest in
the data collected under this rule, as well as its importance to future
policy, warrants establishment, by rule pursuant to CAA Sections 114,
208, and 301(a)(1), of a high standard for data quality and consistency
and a high level of accountability for reported data, which will help
ensure that the data quality and consistency standard is met. The
certification requirements set forth in this rule are similar to the
ARP (Title IV). EPA has successfully implemented this approach in the
ARP and found that it provides a high degree of both data quality and
consistency and accountability.
2. Certificate of Representation
    Comment: One commenter requested that EPA designate a deadline for
the submission of the certificate of representation to ensure
sufficient time to process the submissions.
    Response: EPA agrees that an earlier deadline for submitting
certificates of representation is advisable to provide additional lead
time to process the certificates and, if necessary, verify identities
and resolve issues. Because any delay in processing a certificate of
representation could delay the submission of data, EPA is requiring
that the designated representative submit the initial certificate of
representation at least 60 days prior to the deadline for a facility or
supplier's initial GHG report.
    Comment: Several commenters noted that a certificate of
representation for each facility and supplier is burdensome either due
to timing with the annual report, the need to maintain current
information, or ambiguities as to whether the certificate is complete.
Commenters also requested that reporters be allowed more than 30 days
to submit a revised certificate of representation in the event of a
change in operators or owners.
    Comment: Several commenters requested that EPA provide an
electronic system for submitting and processing certificates of
representation.
    Response: EPA does not agree that certificates of representation
are unnecessary or overly burdensome or that there should be any
uncertainty as to whether a certificate of representation is complete.
The information required on the certificate of representation is

listed in the rule and should be well known to the owners and operators
of the facility or supplier. It is the responsibility of the individual
submitting the certificate to ensure its completeness. This certificate
of representation has been used successfully for over a decade in the
ARP.
    To minimize burden, the electronic data reporting system will
provide the means to electronically submit both the initial and any
subsequent certificate of representation. EPA agrees that reporters
should be allowed more time to update changes in owners or operators
but does not agree that doing so in the annual report is sufficient.
The designated representative is the primary point of contact between
the owners and operators and the EPA. However, the owners and operators
are ultimately responsible for compliance with the requirements of
reporting rule, and it is therefore essential that the information in
the certificate of representation be timely and accurate in the event
EPA finds it necessary to contact the owners and operators of the
facility or supplier during periods in between the submission dates of
the annual reports, for example, to perform an audit. The final rule
allows reporters up to 90 days to submit a revised certificate of
representation when a change in owners or operators occurs. In
addition, EPA modified both the owner definition and rule to clarify
that the certificate of representation does not need to list persons
whose legal or equitable title to or leasehold interest in a facility
or supplier arises solely because they are limited partners in a
partnership with legal or equitable title to, a leasehold interest in,
or control of, the facility or supplier.
3. Data Collection Methods
    Comment: Several commenters requested that EPA use current emission
inventory reporting programs (e.g., NEI) to handle data collection or
to sunset the GHG reporting rule, and instead use such programs, after
five years.
    Response: EPA is requiring electronic reports to be submitted
directly to EPA using a new data reporting system for the GHG reporting
rule. The rationale for the decision to report directly to EPA is
contained in Sections II.N (emissions verification) and VI.B
(compliance and enforcement) of this preamble. EPA recognizes the value
of integrating the GHG data reported under this rule with other
emission reporting programs. NEI, for example, plans to incorporate the
GHG emissions data from this collection, as feasible.
    Comment: Commenters requested that the design of the new data
system be modeled on existing electronic reporting programs,
incorporate measures to handle system errors, and provide opportunities
for testing and user training.
    Response: EPA agrees that a national electronic emissions database
should be the basis for receiving GHG data, and that the ARP database
provides a useful model for a future GHG emissions database. Data would
be provided to EPA electronically to reduce the burden on the reporters
and EPA, and to increase the accuracy of the reported emissions, among
other reasons. The issue of transmission failures and transmission
errors will be addressed in the development of the electronic reporting
system. EPA agrees that is it important for data reporters to be able
to confirm that their data were accepted by the system and to compare
the data in the system to the data that they reported to ensure it was
accurately incorporated into the database. The new data system will
meet Agency requirements for security and hosting. EPA acknowledges
comments supporting a ``user friendly'' reporting system. EPA plans to
follow well known design practices within the constraints of security,
accessibility and Agency design requirements.
    EPA agrees with commenters on the need for testing and user
training. We will continue the outreach effort undertaken during this
rulemaking to encourage stakeholder participation in `beta' testing and
training opportunities.

Unique Identifiers for Facilities and Units

    Comment: Several commenters requested that EPA assign and track
corporate identifiers for reporting facilities to facilitate corporate-
level analysis of emission data. Commenters also requested that EPA
publish a list of identifiers for all EPA programs that a covered
facility may report to.
    Response: EPA is collecting owner and operator information through
the Certificate of Representation (40 CFR 98.4). At this time, EPA is
not proposing to assign unique identifiers to the owners and operators
because of the complexity of ownership structures (including percentage
shares of owners, subsidiaries, holding companies, and limited
liability partnerships) that can be used in the multiplicity of
industrial sectors required to report emission data under this rule.
Although as explained earlier in the preamble, we are exploring options
for adding additional data elements to the reports, such as name of
parent company and NAICS code(s), to allow easier aggregation of
facility-level data to the corporate level under this program. EPA
expects to subject any additional requests to notice and comment
rulemaking.
    EPA's Facility Registry System (FRS) links EPA program
identification numbers under a unique facility record. The FRS database
is publicly available to queries from the EPA.GOV Web site under the
Envirofacts Data Warehouse home page: http://www.epa.gov/enviro/html/
fii/fii_query_java.html. Descriptive information about FRS can be
found at: http://www.epa.gov/enviro/html/fii/index.html. FRS may be
searched by program identification, facility name or geographic
location. The Agency will continue to make FRS and all program
identification numbers readily available and will include the
facilities reporting under this rule in the FRS collection of program
ID's once public release of the data is authorized.

Submission Method

    Comment: Several commenters requested that EPA specify the format
of the data collection methods and subject it to public comment before
finalizing the rule. These commenters indicated that without the
details of the data collection methods it was not possible to evaluate
the GHG reporting rule, including implementation costs and reporting
burden.
    Response: The final rule requires reports to be submitted ``in a
format specified by the Administrator.'' EPA is thereby retaining the
flexibility to specify the electronic format, and the underlying
electronic reporting system reflected in the format, after promulgation
of this rule but well before the first reporting deadline and, if
necessary, to change the electronic format and electronic reporting
system based on implementation experience and new technology. Several
other reporting programs (e.g., ARP) use a similar approach where the
specific electronic reporting system is not included within the rule or
subjected to formal notice and comment. The relevant subparts of the
proposed GHG reporting rule specified the data elements that each
entity must report, and therefore parties could evaluate the reporting
burden and costs under the proposed rule and had an opportunity to
comment on that aspect of the proposed rule. In addition, before
specifying the electronic format and underlying electronic reporting
system, EPA will conduct outreach and provide opportunities for
stakeholder feedback on the specific reporting format and reporting
system.

[[Continued on page 56359]]

]

[[pp. 56359-56408]] Mandatory Reporting of Greenhouse Gases

[[Continued from page 56358]]

    Comment: Several commenters requested that EPA provide alternative
methods to report emission data, including paper submissions, scanned
documents, and direct data upload.
    Response: EPA is requiring electronic reporting of the GHG and
supplemental data to increase the accuracy and timeliness of the
reported emission data and is not providing options for paper or
scanned GHG reports. Requiring electronic submission of data allows EPA
to conduct electronic QA testing of all such data when it is received
and to provide electronic feedback to the reporters almost
instantaneously. This gives reporters the opportunity to correct any
errors, or to provide explanations of potentially problematic data,
within a short time frame, thereby increasing the accuracy and
timeliness of the data. Moreover, electronically submitted data can be
readily sorted and analyzed by EPA and members of the public. In
contrast, submission of hardcopy data (whether in paper or scanned
documents) would make audit and correction, as well as sorting and
analysis, of the data much more cumbersome, inefficient, and time
consuming. Indeed, particularly in light of the large number of
facilities and suppliers that will be reporting and the large amounts
of reported data that will be received as a result, the ability to
audit and analyze the data received in hardcopy format would likely be
significantly limited. This would adversely affect the usefulness, as
well as the accuracy and timeliness of the data.
    In requiring electronic data submission, EPA will provide a Web-
based reporting system to guide reporters through the data entry,
emission calculation, and submission process. This reporting system
will conform to EPA information technology standards and 40 CFR part 3.
In addition, EPA will provide a mechanism for reporters to submit data
files directly to EPA using a standard format (e.g., XML) to be
prescribed by the Administrator before the first reporting date. To
reduce the burden on reporters and reduce errors, EPA will conduct
outreach and training for reporters on the reporting format and
underlying reporting systems. EPA will also provide a hotline to answer
questions about the program and reporting format and reporting systems.
EPA expects that most reporters affected by this rule are already
familiar with Web-based or electronic reporting systems through other
EPA programs.

Delegation of Authority to State Agencies To Collect GHG Data

    Comment: Several commenters requested that EPA delegate rule
implementation, including data collection, to State and local agencies.
These commenters indicated that several States already have GHG
reporting requirements and have systems in place to collect and verify
this data, and suggested that delegation of the rule could help reduce
inconsistency or duplication of effort between State programs and this
Federal mandatory GHG reporting rule. Other commenters supported
requiring facilities to submit data directly to EPA, without delegation
of data collection to State and local agencies, in order to provide
national consistency.
    Response: EPA is requiring electronic reports to be submitted
directly to EPA, and is not delegating data collection to State and
local agencies. The rationale for this decision is provided in Section
VI.B of this preamble.
5. Data Dissemination

Public Access to Emissions Data

    Comment: Several commenters supported EPA's proposal to make the
data submitted under the reporting rule available to the public. Some
requested that data be published in real time, while others requested
the data be released in a timely manner.
    Response: With the exception of CBI, EPA intends to make data
submitted under this program available to the public in a timely manner
after the reports have been submitted and EPA has completed QA/QC of
the data. To that end, EPA intends to establish a new reporting system
that will accept electronic submissions of GHG emissions and supporting
data and facilitate EPA's verification of the submissions. EPA plans to
provide public access to the data by posting electronic data on a Web
site in a timely manner after the reporting deadline. This level of
transparency is important to public participation in future policy
development and for building public confidence in the quality of the
data collected.

Sharing Emissions Data With Other Agencies

    Comment: Some commenters stressed that electronic data reporting
systems need to be consistent and inter-operable and allow data
exchange between TCR, State rules, NEI, ARP, other stakeholders and
EPA.
    Response: EPA will continue to coordinate with other Federal,
State, and regional programs and will make efforts to facilitate data
exchange when designing the data reporting system that will be used for
the GHG reporting rule. EPA intends to employ inter-operable data
exchange standards. EPA intends to design and manage the GHG data
collection to take advantage of existing efforts on data exchange
standards and to work with stakeholder groups to promote the easy
exchange and sharing of the data collected under this rule. For
example, EPA is extending the Consolidated Emissions Reporting Schema
(CERS), currently in use by the EPA's NEI program, to support data
reporting and publication under this rule. EPA also intends to use
existing tools, such as FRS and SRS, to ensure data consistency.
    To the extent possible, EPA will consider existing reporting
systems and work with those programs and systems to develop a reporting
scheme that facilitates data exchange. EPA anticipates that this
coordination will reduce the burden of reporting for both reporters and
government agencies. However, as explained in Section II.O of this
preamble, the various reporting programs do not have identical data
needs and requirements. Therefore, at this time, it is not possible for
companies reporting under State and Federal rules and voluntary
programs to file a single report that will satisfy all reporting
requirements.
    Comment: Commenters requested that the data system utilize common
standards, such as XML and geographic identifiers, and provide
descriptive text wherever codes or abbreviations are used.
    Response: EPA agrees that publishing the results of this data
collection using common, standards-based schemas and formats will
promote the exchange of data between EPA, States and other entities.
The published results will include the latitude and longitude of
facilities as well as help text with definitions of codes and
abbreviations.

VI. Compliance and Enforcement

    This section of the preamble generally describes the compliance
assistance and enforcement activities EPA intends to implement for the
GHG reporting rule and summarizes public comments and responses on
compliance assistance, role of the States, and enforcement.

A. Compliance and Enforcement Summary

1. Compliance Assistance
    EPA plans to conduct an active outreach and technical assistance
program following publication of the final rule. The primary audience
is

potentially affected industries. We intend to develop implementation
and outreach materials and training to help potential reporters
understand whether the rule applies to them and explain the reporting
requirements and timetables. The program particularly will target
industrial, commercial, and institutional sectors that do not routinely
deal with air pollution regulations.
    Compliance materials will be tailored to the needs of various
sectors. These materials might include, for example, fact sheets,
information sheets, plain English guides, frequently asked question and
answer documents, applicability tools, monitoring and recordkeeping
checklists, and training on rule requirements and the electronic
reporting system. We also expect to implement a compliance assistance
e-mail and telephone hotline for answering questions and providing
technical assistance. Note that while EPA plans to issue compliance
assistance materials, reporters should always consult the final rule to
resolve any ambiguities or questions.
2. Role of the States
    While EPA does not intend to formally delegate data collection and
enforcement of the GHG reporting rule to State agencies, EPA will
likely enlist State assistance, when it is available, for outreach and
compliance assistance with the final rule. (However, State and local
agencies will not be required to provide EPA any assistance with these
activities, given State and local agency resource constraints and
priorities.). State and local air pollution control agencies routinely
interact with many of the sources that would report under this rule.
Further, several States have experience implementing State mandatory
GHG reporting and reduction programs. Therefore, we plan to work with
those State and local agencies that are able to assist EPA to define
their role in communicating the requirements of the rule and providing
compliance assistance. In concert with their routine inspection and
other compliance and enforcement activities for other CAA programs,
State and local agencies may also be able to assist with educating
facilities and assuring compliance at facilities subject to this rule.
3. Enforcement
    Facilities or suppliers that fail to monitor or report GHG
emissions, quantities supplied, or other data elements according to the
requirements of the applicable rule subparts could potentially be
subject to enforcement action by EPA under CAA sections 113 and 203-
205. The CAA provides for several levels of enforcement that include
administrative, civil, and criminal penalties. The CAA allows for
injunctive relief to compel compliance and civil and administrative
penalties of up to $37,500 per day per violation.\31\
---------------------------------------------------------------------------

    \31\ The Federal Civil Penalties Inflation Adjustment Act of
1990, Public Law 101-410, 104 Stat. 890, 28 U.S.C. 2461, note, as
amended by Section 31001(s)(1) of the Debt Collection Improvement
Act of 1996, Public Law 104-134, 110 Stat. 1321-373, April 26, 1996,
requires EPA and other agencies to adjust the ordinary maximum
penalty that it will apply when assessing a civil penalty for a
violation. Accordingly, EPA has adjusted the CAA's provision in
Section 113(b) and (d) specifying $25,000 per day of violation for
civil violations to $37,500 per day of violation.
---------------------------------------------------------------------------

    Actions (or inactions) that could ultimately be considered
violations include but are not limited to the following:
     Failure to report GHG emissions (for suppliers, the
emissions that would result from combustion or use of the products they
supply).
     Failure to collect data needed to calculate GHG emissions.
     Failure to continuously monitor and test as required. Note
that merely filling in missing data as specified does not excuse a
failure to perform the monitoring or testing.
     Failure to calculate GHG emissions according to the
methodology(s) specified in the rule.
     Failure to keep required records needed to verify reported
GHG emissions.
     Falsification of reports.

B. Summary of Public Comments and Responses on Compliance and
Enforcement

    This section contains a brief summary of major comments and
responses. A large number of comments on compliance and enforcement
were received covering numerous topics. Responses to significant
comments received can be found in ``Mandatory Greenhouse Gas Reporting
Rule: EPA's Response to Public Comments, Compliance and Enforcement.''
1. Role of States in Compliance and Enforcement
    Comment: Several commenters requested that EPA delegate rule
implementation, including data collection, emissions verification, and
enforcement of the rule to State and local agencies. These commenters
indicated that several States already have GHG reporting requirements
and have systems in place to collect and verify these data, and they
suggested that delegation of the rule could help reduce inconsistency
or duplication of effort between State programs and this Federal
mandatory GHG reporting rule. However the majority of commenters,
including industry, environmental organizations, and many public
citizens supported requiring facilities to submit data directly to EPA,
without delegation of data collection or emissions verification to
State and local agencies, in order to provide national consistency.
    Response: Section 114(b) of the CAA allows EPA to delegate to
States the authority to implement and enforce Federal rules. At this
time, however, EPA does not propose to formally delegate implementation
of the rule (such as data collection and enforcement activities) to
State and local agencies, as discussed in Section II.O of this
preamble. The goal of data collection under this rule is to establish a
consistent, verified, national data set that is available to EPA,
States, other agencies, policy makers, and the public for use in
developing and implementing future GHG policies and reduction programs.
To meet these data consistency and timeliness constraints, and to serve
policy objectives, it is most efficient to have the data submitted
directly into one central EPA system and have centralized emissions
data verification. Direct reporting to EPA will also help us better
understand and address common compliance problems that may arise from
the GHG reporting rule.
    EPA recognizes that several States already have mandatory GHG
reporting programs that are broader in scope, in a more advanced state
of development, and have different policy objectives than this
rulemaking. These are important programs that not only led the way in
reporting of GHG emissions before the Federal government acted but also
have catalyzed important GHG reductions.
    As discussed in Section II.O of this preamble, we are committed to
working with States and other groups (e.g, TCR, Environmental Council
of the States (ECOS)) to develop electronic reporting tools that can
both collect and share data in an efficient and timely manner. At this
time, EPA is in the process of developing the reporting format and
tools and therefore has not specified the exact reporting format, other
than it will be electronic, in order to maintain flexibility to modify
the reporting format and tools in a timely manner. To the extent
possible, EPA will work with existing reporting programs and systems to
develop a reporting scheme that minimizes the burden on sources.
    While EPA is not delegating authority to the States, we will work
with States as we develop rule implementation plans to determine
appropriate

implementation roles, such as assisting with outreach efforts and site
visits to audit facility reports. For related comments and responses,
please see the following sections of this preamble: II.N (verification
approach), II.O (role of States) and II.R (CBI).
2. Enforcement
    Comment: Some commenters suggested that States should be allowed to
participate in the enforcement of the GHG reporting rule, perhaps
through delegated enforcement authority.
    Response: EPA welcomes States' interest in helping EPA enforce this
or any other Federal rule and we will work with States to determine
appropriate roles as described above. We do not plan to delegate the
enforcement of this rule in the same sense that we do under other CAA
programs such as the NESHAP program in which, for example, notices may
be sent only to the delegated States. If a State would like the
authority to enforce this rule, then the State may adopt the provisions
of this GHG reporting rule into State laws or regulations by reference.
This would make the provisions enforceable as a matter of State law
which can be enforced in a State court.
    Comment: Some commenters stated that they should be able to
petition EPA to enforce against violators where they have evidence of
or suspect violations.
    Response: EPA welcomes any tips from citizens about suspected
violations of this or any rule through our tips Web site, http://
www.epa.gov/tips. However, we are not including a formal petition
process in the rule because such a process was not proposed. We do not
favor a formal petition process because a formal petition is not
necessary for us to investigate concerns raised by citizens and such a
process might take extra time or divert resources from other
priorities.
    Comment: Some commenters stated that a flexible enforcement policy
is needed. They noted that the proposed rule cited the CAA for the
authority for the GHG reporting rule and stated that a violation of the
reporting rule is a violation of the CAA and subject to maximum daily
penalties allowed under the CAA. However, the commenters were concerned
that the maximum penalty should not be applied in most cases and argued
that there are many instances when a less severe action is appropriate.
    Response: EPA agrees with the commenters that flexibility is needed
in enforcing the rule. The penalty cited in the proposal preamble and
rule is a statutory maximum, and would not be applied in every case.
EPA's objective with the reporting rule is to collect accurate GHG data
in a timely manner. In order to achieve that objective, EPA will
generally work with sources that must submit GHG reports in order to
facilitate compliance and provide the needed data to EPA. The CAA
allows EPA discretion to pursue a variety of informal and formal
actions in order to achieve compliance. While EPA is committed to
working with reporters to ensure accuracy, this does not relieve
reporters from their obligation to report data that are complete,
accurate, and in accordance with the requirements of this rule.
    In many instances, based on past enforcement experience, less
punitive enforcement actions are exhausted before more punitive fines
and penalties are imposed on a non-complying source. These less
punitive actions may include a warning to the source that it is in non-
compliance along with advice on what needs to be done to comply and a
request for response from the facility. Initial actions may also
include a formal legal notification from EPA that defines the
violation, provides evidence, and requires (orders) corrective actions
by specific dates. The EPA enforcement office always uses discretion
and takes case-specific circumstances into account when determining the
appropriate actions to address violations of CAA rules. We will
continue to do so in enforcing the reporting rule, and we are not
laying out a specific enforcement policy or hierarchy in order to
maintain the necessary flexibility.

VII. Economic Impacts on the Rule

    This section of the preamble examines the costs and economic
impacts of the GHG reporting rule, including the estimated costs and
benefits of the rule, and the estimated economic impacts of the rule on
affected entities, including estimated impacts on small entities.
Complete detail of the economic impacts of the final rule can be found
in the text of the Regulatory Impact Analysis (RIA) for the final rule
(EPA-HQ-OAR-2008-0508).
    This section also contains a brief summary of major comments and
responses. A large number of comments on economic impacts of the rule
were received covering numerous topics. Responses to significant
comments received can be found in ``Mandatory Greenhouse Gas Reporting
Rule: EPA's Response to Public Comments, Cost and Economic Impacts of
the Rule.''

A. How were compliance costs estimated?

1. Summary of Method Used To Estimate Compliance Costs
    EPA estimated costs of complying with the rule for reporting
process emissions of GHGs in each affected industrial facility, as well
as emissions from stationary combustion sources at industrial
facilities and other facilities, GHG and supply data from fuel
suppliers and industrial gas suppliers, and GHG data for mobile
sources. 2006 is the representative year of the analysis in that the
annual costs were estimated using the 2006 population of emitting
sources. EPA used available industry and EPA data to characterize
conditions at affected sources. Incremental monitoring, recordkeeping,
and reporting activities were then identified for each type of facility
and the associated costs were estimated.
    The costs of complying with the rule will vary from one facility to
another, depending on the types of emissions, the number of affected
sources at the facility, existing monitoring, recordkeeping, and
reporting activities at the facility, etc. The costs include labor
costs for performing the monitoring, recordkeeping, and reporting
activities necessary to comply with the rule. For some facilities,
costs include costs to monitor, record, and report emissions of GHGs
from production processes and from stationary combustion units. For
other facilities, the only emissions of GHGs are from stationary
combustion. EPA's estimated costs of compliance are discussed in
greater detail below:
    Labor Costs. The costs of complying with and administering this
rule include time of managers, technical, and administrative staff in
both the private sector and the public sector. Staff hours are
estimated for activities, including:
     Monitoring (private): Staff hours to operate and maintain
emissions monitoring systems.
     Reporting (private): Staff hours to gather and process
available data and reporting it to EPA through electronic systems.
     Assuring and releasing data (public): Staff hours to
quality assure, analyze, and release reports.
    Staff activities and associated labor costs will potentially vary
over time. Thus, cost estimates are developed for start-up and first-
time reporting, and subsequent reporting. Wage rates to monetize staff
time are obtained from the Bureau of Labor Statistics (BLS).
    Equipment Costs. Equipment costs include both the initial purchase
price of monitoring equipment and any

facility/process modification that may be required. For example, the
cost estimation method for mobile sources involves upstream measurement
by the vehicle manufacturers. This may require an upgrade to their test
equipment and facility. Based on expert judgment, the engineering costs
analyses annualized capital equipment costs with appropriate lifetime
and interest rate assumptions. Cost recovery periods and interest rates
vary by industry, but typically, one-time capital costs are amortized
over a 10-year cost recovery period at a rate of seven percent.
2. Summary of Comments and Responses
    Comment: A majority of the comments received on the compliance
costs of the reporting rule focused on facility level costs for
monitoring and reporting. Commenters noted that costs estimated for a
representative facility may differ from actual facility level costs.
Some commenters specifically referred to the costs associated with
installing and maintaining capital equipment. Other commenters noted
that some source categories had higher estimated compliance costs than
others. Several commenters expressed confusion over how combustion
related monitoring costs are added to process related monitoring costs.
    Response: EPA recognizes that the costs presented for facilities
represent costs that would be incurred by a representative facility,
and may not reflect the costs that would be incurred by each individual
facility in each industry because facilities affected by each subpart
vary.
    Nevertheless, after reviewing the comments received, EPA has
determined that its analysis provides a reasonable characterization of
costs for facilities affected by each subpart and that its
documentation provides adequate documentation of how the costs were
estimated. As described in the next section, EPA collected and
evaluated cost data from multiple sources, and weighed the analysis
prepared at proposal against the input received through public
comments. In any analysis of this type, there will be variations in
costs among facilities, and after thoroughly reviewing the available
information, we have concluded that the costs developed for this rule
appropriately reflect a ``representative facility'' in the sector.
    The costs facing facilities in some sectors include not only
process costs but additional costs associated with other subparts of
the rule. While these costs are presented individually in Section 4 of
the RIA for the final rule, where these conditions apply the costs are
summed across applicable subparts and compared to revenues in the
economic and small entity impact analyses.

B. What are the costs of the rule?

1. Summary of Costs
    For the cost analysis, EPA gathered existing data from EPA,
industry trade associations, States, and publicly available data
sources (e.g., labor rates from the BLS) to characterize the processes,
sources, sectors, facilities, and companies/entities affected. EPA also
considered cost data submitted in public comments on the proposed rule,
as further discussed in Section VII.B.2 of this preamble. Costs were
estimated on a per entity basis and then weighted by the number of
entities affected at the 25,000 metric tons CO2e threshold.
    To develop the costs for the rule, EPA estimated the number of
affected facilities in each source category, the number and types of
combustion units at each facility, the number and types of production
processes that emit GHGs, process inputs and outputs (especially for
monitoring procedures that involve a carbon mass balance), and the
measurements that are already being made for reasons not associated
with the rule (to allow only the incremental costs to be estimated).
Many of the affected source categories, especially those that are the
largest emitters of GHGs (e.g., electric utilities, industrial boilers,
petroleum refineries, cement plants, iron and steel production, pulp
and paper) are subject to national emission standards and we use data
generated in the development of these standards to estimate the number
of sources affected by the reporting rule.
    Other components of the cost analysis included estimates of labor
hours to perform specific activities, cost of labor, and cost of
monitoring equipment. Estimates of labor hours were based on previous
analyses of the costs of monitoring, reporting, and recordkeeping for
other rules; information from the industry characterization on the
number of units or process inputs and outputs to be monitored; and
engineering judgment by industry and EPA industry experts and
engineers. Labor costs were taken from the BLS and adjusted to account
for overhead. Monitoring costs were generally based on cost algorithms
or approaches that had been previously developed, reviewed, accepted as
adequate, and used specifically to estimate the costs associated with
various types of measurements and monitoring.
    A detailed engineering analysis was conducted for each subpart of
the rule to develop unique unit costs. This analysis is documented in
the RIA for the final rule. The TSDs for each source category provide a
discussion of the applicable measurement technologies and any existing
programs and practices. The appropriate volume of ``Mandatory
Greenhouse Gas Reporting Rule: EPA's Response to Public Comments'' for
each source category provide responses to any public comments on these
source category engineering and cost analyses. Section 4 of the RIA for
the final rule contains a description of the engineering cost analysis.
    Table VII-1 of this preamble presents by subpart: The number of
entities, the downstream emissions covered, the first year capital
costs and the first year annualized costs of the rule. EPA estimates
that the total national annualized cost for the first year is $132
million, and the total national annualized cost for subsequent years is
$89 million (2006$). Of these costs, roughly 13 percent fall upon the
public sector for program administration in the first year, while 87
percent fall upon the private sector. General stationary combustion
sources, which are widely distributed throughout the economy, are
estimated to incur approximately 26 percent of costs in the first year;
other sectors incurring relatively large shares of costs are pulp and
paper manufacturing (9 percent) and vehicle and engine manufacturers (9
percent).
    The threshold, in large part, determines the number of entities
required to report GHG emissions and hence the costs of the rule. The
number of entities excluded increases with higher thresholds. Table
VII-2 of this preamble provides the cost-effectiveness analysis for
various thresholds examined. Two metrics are used to evaluate the cost-
effectiveness of the emissions threshold. The first is the average cost
per metric ton of emissions reported ($/metric ton CO2e).
The second metric for evaluating the threshold option is the
incremental cost of reporting emissions. The incremental cost is
calculated as the additional (incremental) cost per metric ton starting
with the least stringent option and moving successively from one
threshold option to the next. For more information about the first year
capital costs (unamortized), project lifetime and the amortized
(annualized) costs for each subpart, please refer to section 4 of the
RIA for the final rule and the RIA cost appendix. Not all subparts
require capital expenditures but those that do

are clearly documented in the RIA for the final rule.

                 Table VII-1--Estimated Covered Entities, Emissions and Costs by Subpart (2006$)
----------------------------------------------------------------------------------------------------------------
                                           Downstream emissions     First year capital       First year total
                                Number   ------------------------          costs           annualized costs \2\
           Subpart            covered of                         -----------------------------------------------
                               entities    (Million      Share                   Share                   Share
                                          of MtCO2e)   (percent)   (Million)   (percent)   (Million)   (percent)
----------------------------------------------------------------------------------------------------------------
Subpart A--General                     0         0.0           0        $0.0           0        $0.0           0
 Provisions.................
Subpart B--Reserved.........           0         0.0           0         0.0           0         0.0           0
Subpart C--General                 3,000       220.0           6        10.5          27        25.8          20
 Stationary Fuel Combustion
 Sources....................
Subpart D--Electricity             1,108      2262.0          59         0.0           0         3.3           2
 Generation.................
Subpart E--Adipic Acid                 4         9.3           0         0.0           0         0.1           0
 Production.................
Subpart F--Aluminum                   14         6.4           0         0.0           0         0.2           0
 Production.................
Subpart G--Ammonia                    23        12.9           0         0.0           0         0.4           0
 Manufacturing..............
Subpart H--Cement Production         107        86.8           2         5.4          14         6.8           5
Subpart K--Ferroalloy                  9         2.3           0         0.0           0         0.1           0
 Production.................
Subpart N--Glass Production.          55         2.2           0         0.0           0         0.5           0