Proposed GHG Reporting Rule Changes and Associated Reporting Expectations for CCS
Understanding the regulatory impacts on facility projects is important in order to make decisions regarding capital expenditures. As processes and technologies evolve, so do regulations to accommodate the changing technologies, which can be seen through the development of new subparts or emission factors. The regulatory landscape continues to drive and dictate progressive compliance expectations to meet regulatory standards and as such, it is important to understand how the rules are changing and how those rules affect facility compliance. On such example is the initial 2010 GHG Reporting Rule and the 2022 proposed revision of that rule.
On November 22, 2010, the GHG Reporting rule was finalized (40 CFR Part 98), requiring large generators of Greenhouse Gas (GHG) emissions to report data as part of EPA’s Greenhouse Gas Reporting Program (GHGRP). EPA’s intent for reporting was to create transparency among facilities that release GHG emissions, identify opportunities to cut pollution, minimize wasted energy, and save money. The information obtained through the submitted data can help identify high-emitting facilities, or industries to identify reduction opportunities or develop climate policies.
General applicability includes generators of GHGs from industrial sources, fuel and industrial gas suppliers, and CO2 injection sites. More specifically, there are a total of 41 categories of reporters covered by the GHGRP. Reporting under the GHGRP is related to the type of industrial operations at a facility, and the generated GHG emission levels. Annual reporting is typically required if GHG emissions exceed 25,000 metric tons of CO2e per year, or the facility receives 25,000 metric tons or more of CO2 for underground injection.
Ethanol plants typically report GHG emissions under 40 CFR 98 Subpart C – for Stationary Fuel Combustion Sources. For those facilities that also capture and sell CO2, emissions are also reported under 40 CFR 98 Subpart PP – for Suppliers of Carbon Dioxide. Subpart PP covers facilities that capture CO2 from Industrial sources and processes or extract it from natural CO2-bearing formations for supply into the economy.
A component of the GHGRP requires the collection of key information regarding the supply, underground injection, and geologic sequestration of CO2 in the United States. EPA recognizes that long-term containment of CO2 in subsurface geologic formation is a key component of a set of climate change mitigation technologies and allows large emitters of CO2 to significantly reduce GHG emissions. The data obtained through this rule will inform the EPA of policies and decision under the CAA related to the use of CCS for mitigating GHG emissions. GHG data from these activities are reported under 40 CFR Part 98 Subpart RR and Subpart UU.
Subpart RR covers emissions generated from Geologic sequestration of CO2. A well or group of wells that are permitted as Class VI by the Underground Injection Control (UIC) program meet the definition of this source category. There are some exemptions from reporting under Subpart RR including reporting for R&D projects. This category of reporting provides a mechanism for facilities to monitor the growth and effectiveness of geologic sequestration as a GHG mitigation technology, report to EPA amounts of CO2 sequestered, and allow for the evaluation of relevant policy options. Facilities submit a plan for monitoring, reporting, and verifying CO2 sequestered underground (Monitoring, Reporting, and Verification MRV plan). Once the plan is approved, facilities report basic information on CO2 received for injection, data related to the amounts of CO2 sequestered, and annual monitoring activities.
CO2 emissions are also reported under Subpart UU – Underground injection of CO2 (such as for Enhanced Oil Recovery or EOR). This Subpart covers facilities not reporting under subpart RR, that inject CO2 underground for the enhanced recovery of oil and natural gas, acid gas injection/disposal, carbon storage research and development (R&D), or for any other purpose other than geologic sequestration. Facilities are required to report basic information on CO2 received for injection. Again, EPA can use this data to evaluate CO2 received for injection in conjunction with data obtained from suppliers.
Ethanol, natural gas, and ammonia production are among the top three industrial facility types that capture CO2 for supply into the economy. In 2020, most of the CO2 captured from industrial processes (57 percent) and nearly all of the CO2 produced from natural sources (93 percent) was used for enhanced oil and gas recovery (as of 2021) based on information supplied by the EPA.
On June 21, 2022, EPA released proposed amendments to specific provisions of the Greenhouse Gas Reporting Program (GHGRP). The public comment period for this proposed rule was extended to October 6, 2022, in order to provide the general public with additional time for participation and comment. At the time of this article’s preparation, there has been no update to the status of rule finalization. The goals of these amendments are to:
- Improve the quality of the data collected under the program by addressing changes in industry practices;
- Adopt improved calculation and monitoring methods; and
- Collect new data to understand new source categories or new emissions sources for specific sectors.
Proposed modifications to the GHG reporting rule include changes to the emission factors currently used. EPA is proposing these amendments to calculations and monitoring methods to reflect an improved understanding of industrial processes and sources, and ultimately end users of GHGs.
Also included in the proposed rulemaking is a new Subpart. Subpart VV – Geologic Sequestration of Carbon Dioxide with Enhanced Oil Recovery Using ISO 27916. Subpart VV provides an alternative method of reporting geologic sequestration in association with CO2-EOR presenting another option for reporters who are sequestering CO2 through their EOR operations but do not choose to report under Subpart RR. This applies to facilities that choose to use the International Standards Organization (ISO) standard designated as CSA Group (CSA)/American National Standards Institute (ANSI) ISO 27916:2019, Carbon Dioxide Capture, Transportation and Geological Storage—Carbon Dioxide Storage 3 Using Enhanced Oil Recovery (CO2-EOR) (hereafter referred to as ‘‘CSA/ANSI ISO 27916:2019’’) as a means of quantifying geologic sequestration.
Under existing GHGRP requirements, facilities that sequester CO2 through EOR operations may opt into Subpart RR. The new Subpart would establish procedures for documenting and reporting the amount of CO2 securely stored using the CSA/ANSI ISO 27916:2019 methodology. The reporting of this information to the EPA would ensure that the public has access to the relevant information in the same manner that the public currently has access to the information reported to the EPA under Subpart RR. This reporting would also provide the EPA with complete data (data from reporting under both Subpart RR and CSA/ANSI ISO 27916:2019) to comprehensively track and document the flow of CO2 through the economy, and to more fully understand the amounts of CO2 that are geologically sequestered for EOR. Ultimately, this enables the EPA to monitor the growth and efficacy of geologic sequestration as a greenhouse gas mitigation technology over time, to evaluate relevant policy options, and to reconcile information obtained with data obtained from 40 CFR part 98, Subpart PP on CO2 supplied to the economy.
Under Subpart VV facilities would report the amount of CO2 stored, inputs included in the mass balance equation used to determine CO2 stored using the CSA/ANSI ISO 27916:2019 methodology, and documentation providing the basis for that determination as set forth in CSA/ANSI ISO 27916:2019. Recordkeeping requirements include developing and providing the CSA/ANSI ISO 27916:2019 EOR Operations Management Plan (OMP). In addition, the EPA is proposing that facilities annually report the specific data and information per CSA/ANSI ISO 27916:2019, including items such as the quantity of CO2 stored during the year, and the formulas and data used to quantify the storage.
Understanding the implications of the proposed regulatory changes, like the GHG Reporting Rule, will help one know what considerations that should be undertaken by the ethanol industry. Questions that a facility can ask include: How will we need to demonstrate compliance? What are the associated recordkeeping and reporting requirements? Will we need to install systems and processes, such as flow meters, to obtain data necessary to demonstrate compliance? Will we need to develop plans or procedures? In order to be compliant, one must know how the rules are changing and how those rules apply to their facility.
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