Mandatory Reporting of Greenhouse Gases, 18455-18468 [2010-6765]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 75, Number 69 (Monday, April 12, 2010)]
[Proposed Rules]
[Pages 18455-18468]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6765]



[[Page 18455]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 98

[EPA-HQ-OAR-2009-0925; FRL-9130-6]
RIN 2060-AQ02


Mandatory Reporting of Greenhouse Gases

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule amendment.

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SUMMARY: EPA is proposing to amend the Mandatory Greenhouse Gas (GHG) 
Reporting Rule, to require reporters subject to the rule to provide: 
The name, address, and ownership status of their U.S. parent company; 
their primary and all other applicable North American Industry 
Classification System (NAICS) code(s); and an indication of whether or 
not any of their reported emissions are from a cogeneration unit. The 
Mandatory GHG Reporting Rule requires greenhouse gas emitting 
facilities and suppliers of fuels and industrial gases from all sectors 
of the economy to report their greenhouse gas emissions and to provide 
certain additional supporting data in annual reports submitted to EPA.

DATES: Comments. Comments must be received on or before June 11, 2010.
    Public Hearing. EPA does not plan to conduct a public hearing 
unless requested. To request a hearing, please contact the person 
listed in the FOR FURTHER INFORMATION CONTACT section by April 19, 
2010. If requested, the public hearing will be conducted on or about 
April 19, 2010 in the Washington, DC area. EPA will provide further 
information about the hearing on its webpage if a hearing is requested.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2009-0925, by one of the following methods:
     Federal eRule amendment making Portal: https://www.regulations.gov. Follow the online instructions for submitting 
comments.
     E-mail: GHGReportingCPNAICS@epa.gov.
     Fax: (202) 566-1741.
     Mail: Environmental Protection Agency, EPA Docket Center 
(EPA/DC), Mailcode 2822T, Attention Docket ID No. EPA-HQ-OAR-2009-0925, 
1200 Pennsylvania Avenue, NW., Washington, DC 20460.
     Hand/Courier Delivery: EPA Docket Center, Public Reading 
Room, EPA West Building, Room 3334, 1301 Constitution Avenue, NW., 
Washington, DC 20004, Attention Docket ID No. EPA-HQ-OAR-2009-0925. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2009-0925, GHG Reporting Corporate Parent and NAICS Code. EPA's policy 
is that all comments received will be included in the public docket 
without change and may be made available online at https://www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be confidential 
business information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through https://www.regulations.gov or e-
mail. The https://www.regulations.gov Web site is an ``anonymous 
access'' system, which means EPA will not know your identity or contact 
information unless you provide it in the body of your comment. If you 
send an e-mail comment directly to EPA without going through https://www.regulations.gov your e-mail address will be automatically captured 
and included as part of the comment that is placed in the public docket 
and made available on the Internet. If you submit an electronic 
comment, EPA recommends that you include your name and other contact 
information in the body of your comment and with any disk or CD-ROM you 
submit. If EPA cannot read your comment due to technical difficulties 
and cannot contact you for clarification, EPA may not be able to 
consider your comment. Electronic files should avoid the use of special 
characters, any form of encryption, and be free of any defects or 
viruses.
    Docket: All documents in the docket are listed in the https://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in https://www.regulations.gov or in hard copy at the Air Docket, EPA/
DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. 
This Docket Facility is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT:  Carole Cook, Climate Change Division, 
Office of Atmospheric Programs (MC-6207J), Environmental Protection 
Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone 
number: (202) 343-9263; fax number: (202) 343-2342; e-mail address: 
GHGMRR@epa.gov.

SUPPLEMENTARY INFORMATION: Additional Information on Submitting 
Comments: To expedite review of your comments by Agency staff, you are 
encouraged to send a separate copy of your comments, in addition to the 
copy you submit to the official docket, to Carole Cook, U.S. EPA, 
Office of Atmospheric Programs, Climate Change Division, Mail Code 
6207-J, Washington, DC 20460, telephone (202) 343-9263, e-mail 
GHGReportingCPNAICS@epa.gov.
    Regulated Entities. This proposed amendment to the Mandatory GHG 
Reporting Rule would affect facilities that are direct emitters of 
GHGs, and suppliers of fuels and industrial gases, that are already 
subject to the rule. Regulated categories and entities would include 
those listed in Table 1 of this preamble:

           Table 1--Examples of Regulated Entities by Category
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                                                         Examples of
             Category                 NAICS code     regulated entities
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General Stationary Fuel            ...............  Facilities operating
 Combustion Sources.                                 boilers, process
                                                     heaters,
                                                     incinerators,
                                                     turbines, and
                                                     internal combustion
                                                     engines:
                                               211  Extractors of crude
                                                     petroleum and
                                                     natural gas.
                                               321  Manufacturers of
                                                     lumber and wood
                                                     products.
                                               322  Pulp and paper
                                                     mills.
                                               325  Chemical
                                                     manufacturers.
                                               324  Petroleum refineries
                                                     and manufacturers
                                                     of coal products.
                                     316, 326, 339  Manufacturers of
                                                     rubber and
                                                     miscellaneous
                                                     plastic products.

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                                               331  Steel works, blast
                                                     furnaces.
                                               332  Electroplating,
                                                     plating, polishing,
                                                     anodizing, and
                                                     coloring.
                                               336  Manufacturers of
                                                     motor vehicle parts
                                                     and accessories.
                                               221  Electric, gas, and
                                                     sanitary services.
                                               622  Health services.
                                               611  Educational
                                                     services.
Electricity Generation...........           221112  Fossil-fuel fired
                                                     electric generating
                                                     units, including
                                                     units owned by
                                                     Federal and
                                                     municipal
                                                     governments and
                                                     units located in
                                                     Indian Country.
Adipic Acid Production...........           325199  Adipic acid
                                                     manufacturing
                                                     facilities.
Aluminum Production..............           331312  Primary Aluminum
                                                     production
                                                     facilities.
Ammonia Manufacturing............           325311  Anhydrous and
                                                     aqueous ammonia
                                                     manufacturing
                                                     facilities.
Cement Production................           327310  Portland Cement
                                                     manufacturing
                                                     plants.
Ferroalloy Production............           331112  Ferroalloys
                                                     manufacturing
                                                     facilities.
Glass Production.................           327211  Flat glass
                                                     manufacturing
                                                     facilities.
                                            327213  Glass container
                                                     manufacturing
                                                     facilities.
                                            327212  Other pressed and
                                                     blown glass and
                                                     glassware
                                                     manufacturing
                                                     facilities.
HCFC-22 Production and HFC-23               325120  Chlorodifluoromethan
 Destruction.                                        e manufacturing
                                                     facilities.
Hydrogen Production..............           325120  Hydrogen
                                                     manufacturing
                                                     facilities.
Iron and Steel Production........           331111  Integrated iron and
                                                     steel mills, steel
                                                     companies, sinter
                                                     plants, blast
                                                     furnaces, basic
                                                     oxygen process
                                                     furnace shops.
Lead Production..................           331419  Primary lead
                                                     smelting and
                                                     refining
                                                     facilities.
                                            331492  Secondary lead
                                                     smelting and
                                                     refining
                                                     facilities.
Lime Production..................           327410  Calcium oxide,
                                                     calcium hydroxide,
                                                     dolomitic hydrates
                                                     manufacturing
                                                     facilities.
Nitric Acid Production...........           325311  Nitric acid
                                                     manufacturing
                                                     facilities.
Petrochemical Production.........            32511  Ethylene dichloride
                                                     manufacturing
                                                     facilities.
                                            325199  Acrylonitrile,
                                                     ethylene oxide,
                                                     methanol
                                                     manufacturing
                                                     facilities.
                                            325110  Ethylene
                                                     manufacturing
                                                     facilities.
                                            325182  Carbon black
                                                     manufacturing
                                                     facilities.
Petroleum Refineries.............           324110  Petroleum
                                                     refineries.
Phosphoric Acid Production.......           325312  Phosphoric acid
                                                     manufacturing
                                                     facilities.
Pulp and Paper Manufacturing.....           322110  Pulp mills.
                                            322121  Paper mills.
                                            322130  Paperboard mills.
Silicon Carbide Production.......           327910  Silicon carbide
                                                     abrasives
                                                     manufacturing
                                                     facilities.
Soda Ash Manufacturing...........           325181  Alkalies and
                                                     chlorine
                                                     manufacturing
                                                     facilities.
                                            212391  Soda ash, natural,
                                                     mining and/or
                                                     beneficiation.
Titanium Dioxide Production......           325188  Titanium dioxide
                                                     manufacturing
                                                     facilities.
Zinc Production..................           331419  Primary zinc
                                                     refining
                                                     facilities.
                                            331492  Zinc dust reclaiming
                                                     facilities,
                                                     recovering from
                                                     scrap and/or
                                                     alloying purchased
                                                     metals.
Municipal Solid Waste Landfills..           562212  Solid waste
                                                     landfills.
                                            221320  Sewage treatment
                                                     facilities.
Manure\1\ Management.............           112111  Beef cattle
                                                     feedlots.
                                            112120  Dairy cattle and
                                                     milk production
                                                     facilities.
                                            112210  Hog and pig farms.
                                            112310  Chicken egg
                                                     production
                                                     facilities.
                                            112330  Turkey Production.
                                            112320  Broilers and Other
                                                     Meat type Chicken
                                                     Production.
Suppliers of Coal Based Liquids             211111  Coal liquefaction at
 Fuels.                                              mine sites.
Suppliers of Petroleum Products..           324110  Petroleum
                                                     refineries.
Suppliers of Natural Gas and NGLs           221210  Natural gas
                                                     distribution
                                                     facilities.
                                            211112  Natural gas liquid
                                                     extraction
                                                     facilities.
Suppliers of Industrial GHGs.....           325120  Industrial gas
                                                     manufacturing
                                                     facilities.
Suppliers of Carbon Dioxide (CO2)           325120  Industrial gas
                                                     manufacturing
                                                     facilities.
------------------------------------------------------------------------
\1\ EPA is not implementing subpart JJ of the Mandatory GHG Reporting
  Rule due to a Congressional restriction prohibiting the expenditure of
  funds for this purpose.

    Table 1 of this preamble is not intended to be exhaustive, but 
rather provides a guide for readers regarding entities likely to be 
regulated by this action. Table 1 lists the types of entities that EPA 
currently is aware of that could be potentially affected by this 
action. Other types of entities not listed in the table could also be 
subject to reporting requirements. To determine whether an entity is 
affected by this action, you should carefully examine the applicability 
criteria found in 40 CFR part 98, subpart A. If you have questions 
regarding the applicability of this action to a particular entity, 
consult the person listed in the preceding FOR FURTHER INFORMATION 
CONTACT section.
    Acronyms and Abbreviations. The following acronyms and 
abbreviations are used in this document.

CAA Clean Air Act
CBI confidential business information
CFC chlorofluorocarbon

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CFR Code of Federal Regulations
CO2 carbon dioxide
CO2e CO2-equivalent
CUSIP Committee on Uniform Security Identification Procedures
DUNS Data Universal Numbering System
eGRID Generation Resource Integrated Database
EO Executive Order
EPA U.S. Environmental Protection Agency
FEIN Federal Employee Identification Numbers
GHG greenhouse gas
HCFC hydrochlorofluorocarbon
HFC hydrofluorocarbon
HFE hydrofluoroether
ICIS Integrated Compliance Information System
ICR Information Collection Request
NAICS North American Industry Classification System
NIH National Institutes of Health
NTTAA National Technology Transfer and Advancement Act of 1995
OMB Office of Management and Budget
RCRAInfo Resource Conservation and Recovery Act database
RFA Regulatory Flexibility Act
RGGI Regional Greenhouse Gas Initiative
SBREFA Small Business Regulatory Enforcement Fairness Act
SEC Securities and Exchange Commission
SIC Standard Industrial Classification
TCR The Climate Registry
TRI Toxics Release Inventory
TSCA Toxic Substances Control Act
UMRA Unfunded Mandates Reform Act
U.S. United States
WCI Western Climate Initiative
WRI World Resources Institute

Table of Contents

I. Background
    A. Background on Proposed Rule Amendment
    B. Summary of the Proposed Rule Amendment
    C. Legal Authority
    D. Relationship to Other Programs
    1. EPA and Other Federal Data Collection Programs
    2. Non-Federal Data Collection Programs
II. Proposed Rule Amendment and Rationale
    A. U.S. Parent Company
    B. NAICS Code
    C. Cogeneration
    D. Frequency of Reporting
    E. Applicability
    F. Request for Comment
III. Economic Impacts of the Proposed Rule Amendment
    A. How were compliance costs estimated?
    B. What are the costs of the rule?
    C. What are the economic impacts of the rule?
    D. What are the impacts of the rule on small businesses?
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Background

A. Background on Proposed Rule Amendment

    The Mandatory GHG Reporting Rule, published on October 30, 2009 (74 
FR 56260), requires reporting by facilities that emit GHGs 
(``facilities'') and by suppliers of fuels and industrial gases 
(``suppliers''). Facilities and suppliers that meet the applicability 
criteria in subpart A of 40 CFR part 98 (``regulated entities'' or 
``reporters'') must submit annual GHG reports.\2\ A list of the 
information that all reporters must submit in their annual reports is 
included in the general provisions of the rule (see 40 CFR 98.3(c)). 
This list includes owner/operator identification information, but does 
not currently require reporters to provide information on their U.S. 
parent company, on their primary and other applicable NAICS code(s), or 
on whether any of their reported emissions are from a cogeneration 
unit. In this notice, EPA proposes amendments to the Mandatory GHG 
Reporting Rule that would require facilities and suppliers subject to 
the rule to provide this additional information in their annual 
reports.
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    \2\ Because they are not covered under 40 CFR part 98, this rule 
does not apply to mobile sources.
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    This preamble is divided into four sections. The first section of 
the preamble provides background and an overview of the proposed rule 
amendment, discusses EPA's legal authority under the Clean Air Act 
(CAA) for collecting the proposed additional information and describes 
the relationship between this information and the information already 
collected by other Federal, regional, and State reporting programs. The 
second section of the preamble states the proposed rule requirements 
and summarizes the rationale for requiring facilities and suppliers 
subject to the rule to report this additional information on an annual 
basis. This section also includes a summary of issues associated with 
the proposed rule amendment upon which EPA is particularly interested 
in receiving comment. The third section of the preamble provides a 
summary of the impacts and costs of the proposed rule amendment. The 
fourth and final section of the preamble discusses the various 
statutory and executive order requirements applicable to the proposed 
rule amendment.

B. Summary of the Proposed Rule Amendment

    EPA is proposing to add three data elements to the list of data 
elements specified in 40 CFR 98.3. These data elements would be 
included in the annual GHG reports that facilities and suppliers 
subject to the Mandatory GHG Reporting Rule are required to submit. 
Specifically, this proposed rule amendment would require each reporter 
to (1) provide the legal name and physical address of its highest-level 
U.S. parent company and to indicate its ownership status by selecting 
from a list of codes provided by EPA; \3\ (2) provide its primary and 
other applicable North American Industry Classification System (NAICS) 
code(s); and (3) indicate whether any of its reported emissions are 
from a cogeneration unit.
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    \3\ This information would not be required if, upon finalization 
of this rule amendment, EPA decides to require reporters to list all 
of their U.S. parent companies and their respective percentages of 
ownership.
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    This proposed rule amendment applies to all facilities and 
suppliers required to report under 40 CFR part 98, published on October 
30, 2009 (74 FR 56260).\4\ Therefore, all facilities and suppliers that 
meet the applicability criteria in 40 CFR part 98, subpart A would be 
required to report the additional data elements included in this 
proposal.\5\
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    \4\ If additional categories are proposed and finalized in 40 
CFR part 98, then this rule amendment would apply to those 
categories as well.
    \5\ EPA is not implementing subpart JJ of the Mandatory GHG 
Reporting Rule due to a Congressional restriction prohibiting the 
expenditure of funds for this purpose.
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C. Legal Authority

    EPA is proposing this rule amendment under the existing authority 
provided in CAA section 114. As noted in the Mandatory GHG Reporting 
Rule, CAA section 114 provides EPA with broad authority to require the 
information mandated by this proposed rule amendment because such 
information will inform EPA's implementation of various CAA provisions 
(74 FR 66264). Under CAA section 114(a)(1), the Administrator may 
require emission sources, persons subject to the CAA, manufacturers of 
emission control or process equipment,

[[Page 18458]]

or persons whom the Administrator believes may have necessary 
information, to monitor and report emissions and to provide such other 
information as the Administrator requests for the purposes of carrying 
out any provision of the CAA (except for a provision of title II with 
respect to motor vehicles).
    As discussed in greater detail in the response to comments for the 
final Mandatory GHG Reporting Rule, EPA may gather information for a 
variety of purposes, including for the purpose of assisting in the 
development of emissions standards under CAA section 111, determining 
compliance with implementation plans or standards, or more broadly for 
``carrying out any provision'' of the CAA. Section 103 of the CAA 
authorizes EPA to establish a national research and development 
program, including nonregulatory approaches and technologies, for the 
prevention and control of air pollution, including greenhouse gases. 
The data collected under this proposed rule amendment could inform 
EPA's implementation of section 103(g) of the CAA regarding 
improvements in sector based nonregulatory strategies and technologies 
for preventing or reducing air pollutants.
    In addition, corporate parent and NAICS code data could assist EPA 
in developing and improving air pollution emission inventories. A more 
detailed understanding of the sources and operational categories of GHG 
emissions could lead to improvements in air pollution emissions 
information that is relied upon to develop effective control methods. 
The additional information may also inform regulatory strategies being 
evaluated by EPA.
    Given the broad scope of CAA section 114, it is appropriate for EPA 
to gather the information required by this proposed rule amendment 
because such information is relevant to EPA's carrying out a wide 
variety of CAA provisions.

D. Relationship to Other Programs

    This section of the preamble discusses other Federal and non-
Federal reporting programs that collect information similar to the 
information that EPA would collect under this proposed rule amendment. 
Although considerable information on GHG emitting industrial facilities 
and on suppliers of fuel and industrial gas is already collected by 
EPA, other Federal and State agencies, and private and nonprofit 
organizations, no other source of information meets all of the 
objectives that EPA has set out for this proposed rulemaking. 
Specifically, no other reporting program meets all of the following 
criteria: Identifies each reporter's highest-level U.S. parent company; 
identifies each reporter's primary and all other applicable NAICS 
codes; includes information on cogeneration; covers all reporters to 
the Greenhouse Gas Mandatory Reporting Rule; is collected annually; and 
is available to EPA.
    This section of the preamble reviews the data collected under other 
reporting programs and compares those data with the data that would be 
collected under this proposed rule amendment. Section II of the 
preamble (Proposed Rule Amendment and Rationale) compares the specific 
definitions that EPA is proposing to use for U.S. parent company, NAICS 
code, and cogeneration unit, for purposes of this rule amendment, with 
the definitions used by other Federal and non-Federal programs, and 
explains why we have selected the particular definitions that are used 
here.
1. EPA and Other Federal Data Collection Programs U.S. Parent Company
    Currently, three EPA programs collect parent company information: 
The Toxics Release Inventory (TRI) under Section 313 of the Emergency 
Planning and Community Right-to-Know Act; Risk Management Plans under 
Section 212(r) of the Clean Air Act; and the Inventory Update Rule 
under the Toxic Substances Control Act (TSCA). Of these three programs, 
TRI is the only one that requires reporters to submit information on 
their highest-level U.S. parent company.\6\ TRI requires the parent's 
name and Dun & Bradstreet Universal Numbering System (DUNS) \7\ 
identifier to be reported annually. EPA estimates that approximately 
two-thirds of the reporters to the Mandatory GHG Reporting Rule are 
also required to report to TRI.
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    \6\ For purposes of TRI Form R, a reporter's parent company is 
defined as the highest-level company, located in the United States 
that directly owns at least 50 percent of the voting stock of the 
company (Toxic Chemical Release Inventory Reporting Forms and 
Instructions, EPA 260-R-09-006, October 2009, page 34).
    \7\ The Data Universal Numbering System (DUNS) is a unique 9-
digit numerical identifier used to identify individual business 
entities in databases maintained by Dun & Bradstreet.
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    Risk Management Plans under CAA section 212(r) are required to 
include information on ``parent company.'' \8\ However, the parent 
company reported in a Risk Management Plan is not necessarily the 
highest-level U.S. parent company. Risk Management Plans are generally 
submitted only once every five years, but must be updated when a 
chemical accident occurs at a facility. The Inventory Update Rule under 
TSCA requires reporting of both the production facility where a 
specific chemical is produced and the corporate unit responsible for 
the production or importation of the chemical. However, reporters are 
not required to identify the highest-level U.S. parent company and the 
program does not define ``company.''
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    \8\ EPA's guidance for Risk Management Plans states ``Your 
parent company is the corporation or other business entity that owns 
at least 50 percent of the voting stock of your company. If you are 
owned by a joint venture, enter the first of your two major owners 
here. If your company does not have a parent company, leave this 
data element blank.'' Risk Management Plan Guidance, https://www.epa.gov/emergencies/docs/chem/RMPeSubmit_users_manual.pdf#page=33.
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    Several EPA programs under the CAA, including the Mandatory GHG 
Reporting Rule, require reporters to identify the ``owner or operator'' 
of each affected facility. In these programs, ``owner'' \9\ refers to 
the person or legal entity that owns the facility and its productive 
infrastructure. ``Operator'' \10\ refers to the legal entity that 
controls day-to-day operations. Under some regulatory and reporting 
programs, ``operator'' refers specifically to the plant or site 
manager. Although in some cases, the owner or operator is also the 
highest-level U.S. parent company, the information currently collected 
under the majority of CAA programs is not designed to specifically 
identify the highest-level U.S. parent company or to provide insight 
into the corporate ownership structure because that information is not 
necessary to determine compliance with particular regulatory 
requirements. EPA does generate information on the highest-level U.S. 
parent company of electric generating facilities in its Emissions and 
Generation Resource Integrated Database (eGRID). However, these parent 
company data are based on ownership information reported to the Energy 
Information Administration of the U.S. Department of Energy, and on 
internal EPA research. eGRID contains U.S. parent company data for 
approximately 5,000 electric generating facilities, of which 
approximately 2,000

[[Page 18459]]

are projected to be subject to the Mandatory GHG Reporting Rule.\11\
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    \9\ Under 40 CFR 98.6, ``owner'' means any person who has a 
legal or equitable title to, has a leasehold interest in, or control 
of a facility or supplier, except a person whose legal or equitable 
title to or leasehold interest in the facility or supplier arises 
solely because the person is a limited partner in a partnership that 
has legal or equitable title to, has a leasehold interest in, or 
control of the facility or supplier shall not be considered an 
``owner'' of the facility or supplier.
    \10\ Under 40 CFR 98.6, ``Operator'' means any person who 
operates or supervises a facility or supplier.
    \11\ Of the approximately 3,000 electric generating facilities 
that are not projected to be subject to the Mandatory GHG Reporting 
Rule, about half do not combust any fossil fuel (e.g., they utilize 
hydro, nuclear, wind or solar power) and the other half emit or are 
expected to emit less than 25,000 metric tons of CO2e per year. The 
approximately 2,000 electric generating facilities that are 
projected to be subject to the Mandatory GHG Reporting Rule account 
for 99.7% of the total GHG emissions from all electric generators.
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Primary and Other NAICS Codes
    In addition to collecting information on reporters' U.S. parent 
companies, this proposed rule amendment would require facilities and 
suppliers reporting under the Mandatory GHG Reporting Rule to report 
their primary and other applicable NAICS codes.\12\ This information is 
useful for benchmarking the environmental performance of companies and 
facilities relative to others in their sector. Among all EPA programs, 
only TRI requires reporters to submit primary NAICS codes as well as 
other relevant NAICS codes. As noted above, EPA estimates that 
approximately two-thirds of the reporters under the Mandatory GHG 
Reporting Rule are also required to report to TRI.
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    \12\ A reporter's primary North American Industrial 
Classification System (NAICS) code is defined as the six-digit NAICS 
code that represents the reporter's primary product/activity/service 
as defined in ``North American Industrial Classification System 
Manual 2007,'' available from the U.S. Department of Commerce, 
National Technical Information Service. All other NAICS codes 
relating to product(s)/activity(s)/service(s) which provide economic 
profit (but which are not related to the principal source of 
revenue) are additional NAICS codes.
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    EPA does collect NAICS code information through routine compliance 
reporting in multiple programs, but those data are not complete. The 
air compliance data contained in the Air Facilities System and the 
water compliance data contained in the Permit Compliance System both 
include primary NAICS codes, but not other relevant NAICS codes. 
Conversely, the compliance data for hazardous waste management 
contained in the Resource Conservation and Recovery Act database 
(RCRAInfo) include multiple NAICS codes for facilities with more than 
one relevant code, but do not identify the primary NAICS code. The 
Integrated Compliance Information System (ICIS), which houses a variety 
of enforcement records, also includes NAICS codes, but does not explain 
how these codes are derived. In addition, none of the compliance 
databases provide complete coverage of the facilities subject to the 
Mandatory GHG Reporting Rule.
Cogeneration
    There are currently no EPA programs that require facilities or 
suppliers to report the use of cogeneration units. EPA's Combined Heat 
and Power Partnership, a voluntary program created in 2001, requires 
that Partners complete a Letter of Intent stating that they agree to 
provide data on existing combined heat and power (also known as 
cogeneration) projects and on new project development to help EPA 
determine climate benefits.\13\ However, this is a voluntary program 
and does not provide coverage of all cogeneration units. The Energy 
Information Administration does collect information on cogeneration 
from utility and non-utility power generators greater than 1 megawatt 
(MW).\14\
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    \13\ https://www.epa.gov/chp.
    \14\ EIA-860, Annual Electric Generator Report https://www.eia.doe.gov/cneaf/electricity/page/eia860.html: and,
    EIA-861, Annual Electric Power Industry Report https://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
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2. Non-Federal Data Collection Programs
    EPA is aware of a number of State, regional, and international GHG 
reporting programs that are in place or under development. In 
developing this proposed rule amendment, EPA reviewed 18 State 
programs. A summary of these State programs may be found in the docket 
at EPA-HQ-OAR-2009-0925. EPA also reviewed four other reporting 
initiatives or protocols: The Climate Registry (TCR), the World 
Resources Institute (WRI) Greenhouse Gas Protocol, the Regional 
Greenhouse Gas Initiative (RGGI), and the Western Climate Initiative 
(WCI). In reviewing these GHG reporting programs, EPA considered 
whether they contain information on U.S. parent company, NAICS code(s), 
or cogeneration that is comparable in coverage (of facilities and 
suppliers), specific information collected, data quality and 
timeliness, to what would be required under this proposed rule 
amendment. EPA also considered whether the Agency had access to the 
data collected under these programs.
    In general, EPA found that the data collected under State and other 
non-Federal data collection programs are designed to serve the specific 
purposes of those programs and do not appear to meet the objectives of 
this proposed rule amendment.
U.S. Parent Company
    EPA identified two State programs--those in California and 
Delaware--that require reporting of parent company information. The 
Climate Registry and WRI Greenhouse Gas Protocol also encourage 
reporters to list their parent company on a voluntary basis but do not 
require this information. The Climate Registry and WRI Greenhouse Gas 
Protocol encourage participating organizations to report their GHG 
emissions at the highest organizational level (e.g., corporate level), 
and that the organization account for all emissions sources. RGGI 
collects information on corporate associations from those organizations 
that submit bids in its annual GHG allowance auctions. Additional 
information on the collection of corporate and/or parent company 
information by California, Delaware, TCR, WCI, and RGGI, as well as on 
the WRI Greenhouse Gas Protocol, may be found in the docket at EPA-HQ-
OAR-2009-0925.
Primary and Other NAICS Codes
    All of the State programs require reporting of either the NAICS 
codes or Standard Industrial Classification (SIC) codes. The Western 
Climate Initiative is the only regional reporting program that requires 
reporters to submit their NAICS codes as part of their annual report.
Cogeneration
    Most State reporting programs do not require separate reporting of 
cogeneration emissions or notification regarding the operation of 
cogeneration units. RGGI does not require any additional reporting for 
cogeneration units. WCI requires limited information on type of unit 
and thermal output.15 16 However, WCI is considering 
including separate reporting requirements for cogeneration units.\17\
---------------------------------------------------------------------------

    \15\ Regional Greenhouse Gas Initiative: Final Model Rule, 
December 31, 2008 (https://www.westernclimateinitiative.org/
component/remository/Reporting-Committee-Documents/Draft-Essential-
Requirements-for-Mandatory-Reporting--Final-Draft-(May-7&-2009)/
orderby,4/page,1/).
    \16\ Western Climate Initiative: Final Essential Requirements 
for Mandatory Reporting--July 15, 2009 (https://www.westernclimateinitiative.org/component/remository/func-startdown/118/).
    \17\ Western Climate Initiative: Background Document and 
Progress Report for Essential Requirements of Mandatory Reporting 
for the Western Climate Initiative, January 6, 2009 (https://www.westernclimateinitiative.org/component/remository/func-startdown/74/).
---------------------------------------------------------------------------

    Of the State programs that require cogeneration reporting, the 
California and New Mexico programs have the most extensive reporting 
requirements. For these programs, reporters with a cogeneration unit 
must report detailed information on the type of unit; the amount of 
electricity generated; the amount of thermal energy produced; the 
amount of electricity and thermal energy used on site, sold to a 
distributer,

[[Page 18460]]

or provided directly to another company; the total GHG emissions for 
the unit; the GHG emissions allocated to thermal energy output; and the 
GHG emissions allocated to electricity generation. The California 
reporting rule also requires the amount of supplemental fuel consumed 
by duct burners for heat recovery steam generators.18 19
---------------------------------------------------------------------------

    \18\ California Code of Regulations, Title 17, Section 95112.
    \19\ New Mexico Greenhouse Gas Mandatory Emissions Reporting: 
Emissions Quantification Procedures for 20.2.73 NMAC and 20.2.87 
NMAC, Emissions Year 2009. https://www.nmenv.state.nm.us/aqb/ghg/documents/NM_GHGEI_quantif_procedures_2009.pdf).
---------------------------------------------------------------------------

    Although reporting of cogeneration is not required by TCR, 
reporters are encouraged to report emissions at the unit level and to 
allocate emissions between electric and thermal energy outputs for 
cogeneration units.\20\
---------------------------------------------------------------------------

    \20\ The Climate Registry: General Reporting Protocol, Version 
1.1, May 2008 (https://www.theclimateregistry.org).
---------------------------------------------------------------------------

II. Proposed Rule Amendment and Rationale

    This section of the preamble explains the requirements of the 
proposed rule amendment as well as the rationale for EPA's proposal for 
collecting the additional data elements summarized in Section I.B. of 
this preamble.
    This proposed rule amendment would provide information useful to 
EPA in carrying out a number of potential nonregulatory and regulatory 
efforts authorized under the CAA, including informing the development 
of future climate change strategies. For example, through data 
collected under this proposed rule amendment, EPA would gain a better 
understanding of the aggregate GHG emissions of corporations and 
specific industry sectors.

A. U.S. Parent Company

    Although the proposed rule language includes the requirements for 
only one option (i.e., Option 2 below), EPA is proposing two options 
for collecting U.S. parent company information:
Option 1
    EPA is proposing to require all facilities and suppliers subject to 
the Mandatory GHG Reporting Rule (40 CFR part 98) to provide the legal 
name and physical address of their U.S. parent company. Under this 
option, a reporter's U.S. parent company is defined as the highest-
level company, located in the United States, and with the largest 
ownership interest in the reporting entity as of December 31 of the 
reporting year. The U.S. parent company's physical address is defined 
as the street address, city, state and zip code of the U.S. parent 
company's physical location.
    Each reporter would also be required to indicate one of the 
following with respect to its ownership status:
     ``S''--single ownership (the reporting entity is entirely 
owned by a single company which is not owned by any other company, 
e.g., it is not a subsidiary or division of another company).
     ``W''--wholly owned (the reporting entity is entirely 
owned by a single company which is, itself, owned by another company, 
e.g., it is a subsidiary or division of another company).
     ``M''--multiple owners (the reporting entity is owned by 
more than one company).\21\
---------------------------------------------------------------------------

    \21\ This information, ``S'', ``W'' and ``M'' would not be 
required under Option 2.
---------------------------------------------------------------------------

Option 2
    EPA is also proposing that reporters list the names and physical 
addresses of all of their U.S. parent companies and their respective 
percentages of ownership. Under Option 2, EPA proposes to define U.S. 
parent company(s) as the highest-level U.S. company(s) with an 
ownership interest in the reporting entity as of December 31 of the 
reporting year. The physical address of a U.S. parent company is 
defined as the street address, city, state and zip code of the U.S. 
parent company's physical location.
    With this option EPA recognizes that some facilities and suppliers 
may be owned by multiple companies and seeks to gather a more complete 
picture of the ownership status for each reporter. Facilities and 
suppliers would be required to report all of their U.S. parent 
companies regardless of the percentage of their ownership stake. Note 
that this option would not necessarily ask for all of the owners in an 
individual reporter's corporate structure, just the highest-level 
parent companies. If a facility or supplier has only one parent 
company, that company should be reported at 100 percent.
    Reporting all U.S. parent companies by their percentage of 
ownership would provide EPA with a more complete picture of a 
facility's or supplier's parent companies rather than having 
information solely on the parent company with the largest ownership 
interest. This option would provide EPA with a more complete data set.
    EPA is proposing to provide the following instruction to reporters 
on how to report the U.S. parent company(s) data element under options 
1 and 2 as described above:
    Each reporter must provide the legal name(s) and physical 
address(es) of their U.S. parent company(s). Table 2 of this preamble 
provides examples along with additional instruction to assist with the 
determination of a reporter's U.S. parent company(s):

Table 2--Proposed Instruction for Reporters on How To Report U.S. Parent
                               Company(s)
------------------------------------------------------------------------
                               How to report U.S.    How to report U.S.
     Reporting scenario       parent company under  parent company under
                                    Option 1              Option 2
------------------------------------------------------------------------
The reporting entity is       Provide that          Provide that
 entirely owned by a single    company's legal       company's legal
 U.S. company that is not      name and physical     name and physical
 owned by any other company    address as the U.S.   address as the U.S.
 (e.g., it is not a            parent company.       parent company.
 subsidiary or division of     Mark ``S'' for        Enter 100% as the
 another company).             Single Ownership in   percent ownership
                               the associated box.
The reporting entity is       Provide the legal     Provide the legal
 entirely owned by a single    name and physical     name and physical
 U.S. company which is,        address of the        address of the
 itself, owned by another      highest-level         highest-level
 company (e.g., it is a        company in the        company in the
 division or subsidiary of a   ownership hierarchy   ownership hierarchy
 higher-level company).        as the U.S. parent    as the U.S. parent
                               company. Mark ``W''   company. Enter 100%
                               for Wholly Owned in   as the percent
                               the associated box.   ownership.
The reporting entity is       Provide the legal     Provide the legal
 owned by more than one U.S.   name and physical     names and physical
 company (e.g., company A      address of the        addresses of all of
 owns 40%, company B owns      company with the      the companies with
 35% and company C owns 25%).  largest ownership     an ownership
                               interest as the       interest as U.S.
                               U.S. parent           parent companies.
                               company. Mark ``M''   Enter the percent
                               for Multiple Owners.  ownership of each
                                                     company.

[[Page 18461]]

 
The reporting entity is       Provide the legal     Provide the legal
 entirely owned by a foreign   name and physical     name and physical
 company.                      address of the        address of the
                               foreign company's     foreign company's
                               highest-level         highest-level
                               company based in      company based in
                               the U.S. as the       the U.S. as the
                               U.S. parent           U.S. parent
                               company. Mark ``W''   company. Enter 100%
                               for Wholly Owned in   as the percent
                               the associated box.   ownership.
The reporting entity is       (1) If the reporting  Provide the legal
 partially owned by a          entity is not         name and physical
 foreign company.              entirely owned by     address of the
                               the foreign           foreign entity's
                               company, but the      highest-level
                               foreign company has   company based in
                               the largest           the U.S., along
                               ownership interest,   with the legal
                               then provide the      names and physical
                               legal name and        addresses of all
                               physical address of   the other companies
                               the foreign           with an ownership
                               company's highest-    interest, as U.S.
                               level company based   parent companies.
                               in the U.S. as the    Enter the percent
                               U.S. parent           ownership of each
                               company. Mark ``M''   company.
                               for Multiple Owners
                               in the associated
                               box.
                              (2) If the foreign
                               company does not
                               have the largest
                               ownership interest
                               in the reporting
                               entity, then
                               provide the name
                               and physical
                               address of the
                               company with the
                               largest ownership
                               interest as the
                               U.S. parent
                               company. Mark ``M''
                               for Multiple Owners
                               in the associated
                               box.
The reporting entity is       The joint venture or  The joint venture or
 owned by a joint venture or   cooperative is its    cooperative is its
 cooperative.                  own U.S. parent       own U.S. parent
                               company. Provide      company. Provide
                               the joint venture     the joint venture
                               or cooperative's      or cooperative's
                               legal name and        legal name and
                               physical address as   physical address as
                               the U.S. parent       the U.S. parent
                               company. Mark ``W''   company. Enter 100%
                               for Wholly Owned in   as the percent
                               the associated box.   ownership.
The reporting entity is a     Enter U.S.            Enter U.S.
 Federally-owned facility.     Government, and       Government, and
                               leave the address     leave the address
                               field and ownership   and percent
                               box blank.            ownership fields
                                                     blank.
------------------------------------------------------------------------

    EPA may issue additional guidance for reporters after this proposed 
rule amendment is finalized.
    The proposed definition of U.S. parent company used in this 
proposed rule amendment is similar to that used in the TRI program. 
However, to improve data quality, EPA is proposing to slightly modify 
the definition of the U.S. parent company used in the TRI program for 
the purposes of this proposed rule amendment. EPA is proposing to 
adjust the ownership criteria used in the TRI definition of U.S. parent 
company from over 50 percent of voting stock to largest ownership 
interest in the company for the purpose of this action only. EPA is not 
proposing to alter the definition used for the TRI program. In 
reviewing TRI data, EPA has determined that the TRI definition may 
result in incomplete information in situations where a company has 
multiple owners, but no one company owns over 50 percent.
    In addition, EPA reviewed how corporations and/or parent companies 
are defined in the WRI Greenhouse Gas Protocol, TCR, and RGGI to 
determine if some or all of the definitions could be applied to this 
proposed rule amendment. Neither WRI, TCR, nor RGGI have a definition 
of U.S. parent company, and after a review of the programs, EPA 
determined that the definitions of corporation (and similar terminology 
depending on the program) are not appropriate for this proposed rule 
amendment. For a summary of this analysis please see the docket at EPA-
HQ-OAR-2009-0925.
Rationale
    The purpose of collecting the name and physical address of the U.S. 
parent company(s) on the annual reporting form for the Mandatory GHG 
Reporting Rule is to assist in aggregating facility-based GHG emissions 
data to the corporate level. This additional data element would allow 
EPA to compile more comprehensive information on corporate GHG 
emissions and conduct a variety of analyses. EPA received some comments 
on the Mandatory GHG Reporting Rule from various entities supporting 
the collection of parent company data and emphasizing the importance of 
being able to aggregate the data to the corporate level. For example, 
one commenter stated that ``Company identification is a critical 
requirement for * * * understanding the impact, risks, and 
opportunities * * * due to climate change.'' \22\ Another commenter 
stated, ``That the EPA [should] add a requirement that facilities 
subject to reporting under the proposed rule clearly identify their 
parent company and the proportion of the facility the parent/holding 
company owns. Without this information it is very difficult to 
consolidate facility level data to company level data * * *'' \23\
---------------------------------------------------------------------------

    \22\ Comment Docket ID No. EPA-HQ-OAR-2008-0508-0415.1.
    \23\ Comment Docket ID No. EPA-HQ-OAR-2008-0508-0984.1.
---------------------------------------------------------------------------

    EPA recognizes that data aggregated at the corporate level would 
likely be incomplete because the Mandatory GHG Reporting Rule requires 
reporting of only those emissions for which calculation methods are 
provided in the rule and, for certain source categories, requires 
reporting only from those facilities and suppliers whose emissions are 
above specified thresholds. In other words, corporate-level data might 
be incomplete, because 40 CFR part 98 does not cover all GHG emissions 
from every source, and some facilities and operations within a company 
may not be required to report their GHG emissions.
    However, collecting information on U.S. parent company(s) would 
augment and complement the facility-level GHG emission data currently 
collected under the Mandatory GHG Reporting Rule and would not be 
repetitive of information already collected in the rule. In addition, 
the Mandatory GHG Reporting Rule covers approximately 85 percent of 
U.S. GHG emissions, therefore the data

[[Page 18462]]

collected under this proposed rule amendment would be useful.
    Under Option 1, each reporter would report the legal name and 
physical address of their highest-level U.S. parent company and would 
select from a list of three possible ownership structures, selecting 
the type of ownership that best describes the ownership structure for 
the facility or supplier. Using this approach, EPA would collect 
information on whether a facility or supplier is owned by a single 
entity or multiple entities. Option 1 would enable EPA to collect 
additional data on the ownership structure of a facility or supplier, 
which would allow (with additional research) a more complete picture of 
a facility's or supplier's GHG emissions among U.S. parent companies, 
without requiring facilities to list all of their owners.
    Under Option 2, facilities and suppliers would report the legal 
names and physical addresses of all their U.S. parent companies 
together with each U.S. parent company's percentage of ownership. The 
advantage of this option is that it would provide EPA with a more 
complete picture of a facility's or supplier's parent companies rather 
than having information on solely the parent company with the largest 
ownership interest.
Other Data Element Considered
    EPA considered adding a requirement to this proposed rule amendment 
to report a numeric corporate identifier derived from a database that 
would verify the facility-parent company linkage. EPA considered both 
private and public sources of facility-parent company identifiers 
including the following: Dun & Bradstreet Data Universal Numbering 
System (DUNS), Securities and Exchange Commission (SEC) Central Index 
Key, Stock Tickers, Committee on Uniform Security Identification 
Procedures (CUSIP), Federal Employee Identification Numbers (FEIN), 
National Institutes of Health (NIH) Electronic Research Administration, 
and LexisNexis. For a summary of these corporate identifiers please see 
the docket at EPA-HQ-OAR-2009-0925. EPA decided not to propose a 
numeric identifier because none of the options considered meet the 
Agency's data needs. The privately held databases such as Dun & 
Bradstreet DUNS and CUSIP require a licensing agreement with the 
Agency, which potentially restricts the use of the data. In addition, 
users outside of EPA would need to purchase a license to use the 
numeric identifier data element. Several of the options considered, 
such as stock tickers, CUSIP, SEC central index key, and LexisNexis 
only cover public corporations. The Mandatory GHG Reporting Rule covers 
both private and public corporations. In accordance with Internal 
Revenue Code 6103, FEINs can only be collected and released on a 
voluntary basis and EPA would have no method for evaluating the quality 
of the information. Accordingly we are not proposing a corporate 
numeric identifier.

B. NAICS Code

    In addition to collecting information on each reporter's U.S. 
parent company(s), this proposed rule amendment would require each 
facility or supplier reporting under the Mandatory GHG Reporting Rule 
to report its primary NAICS code and any other NAICS codes applicable 
to its facility. This information is useful because it would provide an 
additional data element that can assist EPA to further aggregate and 
analyze the data collected under the Mandatory GHG Reporting Rule at 
the sector level.
    For the purposes of this proposed rule amendment, EPA is proposing 
to define a reporter's primary North American Industry Classification 
System (NAICS) code as the six-digit code that represents the 
reporter's primary product/activity/service at the facility, as defined 
in ``North American Industry Classification System Manual 2007,'' 
available from the U.S. Department of Commerce, National Technical 
Information Service. The primary NAICS code is the principal source of 
revenue. EPA is proposing to define additional NAICS codes as those 
codes that correspond to product(s)/activity(s)/service(s) that provide 
economic profit, but that are not related to the principal source of 
revenue. EPA consider