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PROtect, LLCJanuary 20, 20234 min read

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, like the proposed changes to the Greenhouse Gas Reporting Rule. It is important to understand how the rules are changing and how those rules affect facility compliance.

On Nov. 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). 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.

A component of the GHGRP requires the collection of information regarding the supply, underground injection, and geologic sequestration of CO2. EPA recognizes that long-term containment of CO2 in subsurface geologic formation is a 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 decisions under the Clean Air Act related to the use of carbon capture and storage (CCS) for mitigating GHG emissions. GHG data from these activities are reported under 40 CFR Part 98 Subpart RR and Subpart UU. Ethanol, natural gas, and ammonia production are among the top three industrial facility types that capture CO2 for supply into the economy, and potentially applicable to reporting under Subparts PP, RR, or UU.

On June 21, 2022, EPA released proposed amendments to specific provisions of the GHGRP. The public comment period for this proposed rule was extended to Oct. 6, 2022. At the time of this article’s preparation, there has been no update to the status of rule finalization. Proposed modifications to the GHG reporting rule include changes to the emission factors, calculations, and monitoring methods, to reflect an improved understanding of industrial processes and sources.

Also included in the proposed rulemaking is a new Subpart, Subpart VV - Geologic Sequestration of Carbon Dioxide with Enhanced Oil Recovery Using ISO 27916. This Subpart provides an alternative method of reporting geologic sequestration in association with CO2-EOR for reporters who are sequestering CO2 through their EOR operations but do not choose to report under Subpart RR.

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 information in the same manner the public currently has access to information reported under Subpart RR. This reporting would also provide the EPA with complete data (from reporting under both Subpart RR and Subpart VV) to comprehensively track and document the flow of CO2 through the economy and understand the amounts of CO2 that are geologically sequestered for EOR. This enables the EPA to monitor the growth and efficacy of geologic sequestration as a GHG 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 and generate documentation providing the basis for that determination. 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 information, 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.