[Federal Register Volume 75, Number 183 (Wednesday, September 22, 2010)]
[Rules and Regulations]
[Pages 57669-57686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23674]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 98
[EPA-HQ-OAR-2009-0925; FRL-9204-7]
RIN 2060-AQ02
Mandatory Reporting of Greenhouse Gases
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: This action amends the Final Mandatory Reporting of Greenhouse
Gases Rule to require reporters subject to the rule to provide: The
name, address, and percentage ownership of their U.S. parent
company(s); their primary North American Industry Classification System
code(s) as well as all additional applicable North American Industry
Classification System code(s); and an indication of whether or not any
of their reported emissions are from a cogeneration unit. This final
action also corrects an editorial error in revisions made to the
General Provisions published earlier this year.
DATES: The final rule is effective on November 22, 2010.
[[Page 57670]]
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2009-0925. All documents in the docket are listed on the
http://www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the Internet and will be publicly available only in hard
copy form. Publicly available docket materials are available either
electronically through http://www.regulations.gov or in hard copy at
EPA's Docket Center, Public Reading Room, EPA West Building, Room 3334,
1301 Constitution Avenue, NW., Washington, DC 20004. 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: For technical information and
implementation materials, please go to the Web site http://www.epa.gov/climatechange/emissions/ghgrulemaking.html. To submit a question,
select Rule Help Center, followed by Contact Us. You may also 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: [email protected].
SUPPLEMENTARY INFORMATION: Regulated Entities. This amendment to 40 CFR
part 98 affects 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 include those listed in Table 1
of this preamble.
Table 1--Examples of Regulated Entities by Category
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Examples of regulated
Category NAICS Code 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.
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.
325193 Ethyl alcohol
manufacturing
facilities.
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 Chlorodifluoromethane
Destruction. 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.
Magnesium Production......... 331419 Primary refiners of
nonferrous metals by
electrolytic
methods.
331492 Secondary magnesium
processing plants.
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.
Underground Coal Mines....... 212113 Underground
anthracite coal
mining operations.
212112 Underground
bituminous coal
mining operations.
[[Page 57671]]
Zinc Production.............. 331419 Primary zinc refining
facilities.
331492 Zinc dust reclaiming
facilities,
recovering from
scrap and/or
alloying purchased
metals.
Municipal Solid Waste 562212 Solid waste
Landfills. landfills.
221320 Sewage treatment
facilities.
Industrial Waste Landfills... 562212 Solid waste
landfills.
322110 Pulp mills.
322121 Paper mills.
322122 Newsprint mills.
322130 Paperboard mills.
311611 Meat processing
facilities.
311411 Frozen fruit, juice,
and vegetable
manufacturing
facilities.
311421 Fruit and vegetable
canning facilities.
221320 Sewage treatment
facilities.
Industrial Wastewater 562212 Solid waste
Treatment. landfills.
322110 Pulp mills.
322121 Paper mills.
322122 Newsprint mills.
322130 Paperboard mills.
311611 Meat processing
facilities.
311411 Frozen fruit, juice,
and vegetable
manufacturing
facilities.
311421 Fruit and vegetable
canning facilities.
221320 Sewage treatment
facilities.
325193 Ethyl alcohol
manufacturing
facilities.
Manure Management \a\........ 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 211111 Coal liquefaction at
Liquids Fuels. mine sites.
Suppliers of Petroleum 324110 Petroleum refineries.
Products.
Suppliers of Natural Gas and 221210 Natural gas
NGLs. distribution
facilities.
211112 Natural gas liquid
extraction
facilities.
Suppliers of Industrial GHGs. 325120 Industrial gas
manufacturing
facilities.
Suppliers of Carbon Dioxide 325120 Industrial gas
(CO2). manufacturing
facilities.
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a EPA will not be implementing subpart JJ of the Mandatory GHG Reporting
Rule using funds provided in its FY2010 appropriations 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
affected by this action. Table 1 of this preamble lists the types of
entities that may be reporting under 40 CFR part 98 and, therefore, may
be affected by this action. However, 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. EPA has also proposed reporting requirements for several
other source categories (rule subparts). If these subparts are
finalized, entities subject to them would be also subject to this
action starting with their first reports. The following subparts have
been proposed, but not yet finalized, by EPA:
40 CFR part 98, subpart I (Electronics Manufacturing) (75
FR 18652, April 12, 2010);
40 CFR part 98, subpart L (Fluorinated Gas Production) (75
FR 18652, April 12, 2010);
40 CFR part 98, subpart W (Petroleum and Natural Gas
Systems) (75 FR 18608, April 12, 2010);
40 CFR part 98, subpart DD (Electric Transmission and
Distribution Equipment Use) (75 FR 18652, April 12, 2010);
40 CFR part 98, subpart QQ (Imports and Exports of
Fluorinated GHGs Inside Pre-charged Equipment and Closed-cell Foams (75
FR 18652, April 12, 2010);
40 CFR part 98, subpart RR (Injection and Geologic
Sequestration of Carbon Dioxide (75 FR 18576, April 12, 2010); and
40 CFR part 98, subpart SS (Electrical Equipment
Manufacture or Refurbishment) (75 FR 18652, April 12, 2010).
If you have questions regarding the applicability of this action to
a particular entity, consult the Web site or the person listed in the
preceding FOR FURTHER GENERAL INFORMATION CONTACT section.
Judicial Review
Under section 307(b)(1) of the CAA, judicial review of this final
rule is available only by filing a petition for review in the U.S.
Court of Appeals for the District of Columbia Circuit by November 22,
2010. Note, under CAA section 307(b)(2), the requirements established
by this final rule may not be challenged separately in any civil or
criminal proceedings brought by EPA to enforce these requirements.
Acronyms and Abbreviations
The following acronyms and abbreviations are used in this document:
CAA Clean Air Act
CBI confidential business information
CFR Code of Federal Regulations
CO2 carbon dioxide
CO2e CO2-equivalent
CUSIP Committee on Uniform Security Identification Procedures
DUNS Data Universal Numbering System
EIA Economic Impact Analysis
EO Executive Order
[[Page 57672]]
EPA U.S. Environmental Protection Agency
FEIN Federal Employer Identification Numbers
GHG greenhouse gas
GHGRP Greenhouse Gas Reporting Program
HCFC hydrochlorofluorocarbon
HFC hydrofluorocarbon
ICR Information Collection Request
LDC Local Distribution Company
NAICS North American Industry Classification System
NTTAA National Technology Transfer and Advancement Act of 1995
OMB Office of Management and Budget
SBREFA Small Business Regulatory Enforcement Fairness Act
SEC Securities and Exchange Commission
TRI Toxics Release Inventory
UMRA Unfunded Mandates Reform Act
U.S. United States
Table of Contents
I. Background
A. Background on the Final Rule
B. Summary of the Final Rule
C. Legal Authority
D. Relationship to Other Programs
II. The Final Rule and Reponses to Public Comments
A. U.S. Parent Company
B. NAICS Code(s)
C. Cogeneration
D. Frequency of Reporting
E. Applicability of the Reporting Requirements
F. Miscellaneous Public Comments and Responses
G. Correction to Subpart A
III. Economic Impacts of the Final Rule
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
D. Unfunded Mandates Reform Act
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
K. Congressional Review Act
I. Background
A. Background on the Final Rule
On April 12, 2010, EPA proposed this rule amending 40 CFR part 98,
which provides the regulatory framework for the GHG Reporting Program
(GHGRP).\1\ The GHGRP requires the reporting of greenhouse gas (GHG)
emissions and other relevant information from certain source categories
in the United States (U.S). The GHGRP, which became effective December
29, 2009, includes reporting requirements for facilities that emit GHGs
(``facilities'') and for suppliers of fuels and industrial gases
(``suppliers''). Facilities and suppliers that meet the applicability
criteria in 40 CFR part 98, subpart A (``regulated entities'' or
``reporters'') must submit annual GHG reports in accordance with the
provisions in 40 CFR 98.3(c).\2\ For more detailed background
information on the GHGRP, see the preamble to the final rule that
established the program (74 FR 56260, October 30, 2009).
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\1\ GHGRP refers to the implementation of 40 CFR part 98.
\2\ Because mobile sources are not covered under 40 CFR part 98,
this rule does not apply to them.
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This rule amends 40 CFR part 98 to include new requirements for
reporters to provide information on their U.S. parent company(s), on
their primary and additional applicable North American Industry
Classification System (NAICS) code(s), and on whether any of their
reported emissions are from a cogeneration unit (also called combined
heat and power). Facilities and suppliers subject to 40 CFR part 98
must provide this additional information in their annual reports. This
action also amends 40 CFR part 98, subpart A to correct a drafting
error in the revisions to 40 CFR 98.2(a)(2) published on July 12, 2010
(75 FR 39758).
This preamble is divided into four sections. The first section of
the preamble provides background and an overview of the final rule,
discusses EPA's legal authority under the Clean Air Act (CAA) for
collecting the additional information and summarizes the relationship
between this information and the information already collected by other
programs. The second section of the preamble describes the new
reporting requirements finalized by this action, describes major
changes since proposal, discusses public comments and EPA responses,
and describes the revisions made to 40 CFR 98.2(a)(2) to correct the
editorial error published on July 12, 2010. The third section of the
preamble provides a summary of the impacts and costs of the final rule
and discusses comments on the regulatory impacts analyses. The fourth
and final section of the preamble discusses the various statutory and
executive order requirements applicable to the final rule.
B. Summary of the Final Rule
This action amends 40 CFR part 98 by adding several data elements
to the list specified in 40 CFR 98.3. These data elements must be
included in the annual GHG reports that facilities and suppliers
subject to 40 CFR part 98 are required to submit. Specifically, this
rule requires each reporter to (1) Provide the names and physical
addresses of all of its U.S. parent companies and their respective
percentages of ownership; (2) provide its primary NAICS code(s) and all
additional applicable NAICS code(s); and (3) indicate whether any of
its reported emissions are from a cogeneration unit located at the
facility.
This rule applies to all facilities and suppliers required to
report under 40 CFR part 98, including those covered by subparts
published on October 30, 2009 (74 FR 56260) and on July 12, 2010 (75 FR
39736).\3\ Therefore, all facilities and suppliers that meet the
applicability criteria in 40 CFR part 98, subpart A are required to
report the additional data elements included in this rule.\4\
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\3\ If additional categories are finalized in 40 CFR part 98,
then this rule applies to those categories as well.
\4\ EPA will not be implementing subpart JJ of the Mandatory GHG
Reporting Rule using funds provided in its FY2010 appropriations due
to a Congressional restriction prohibiting the expenditure of funds
for this purpose.
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C. Legal Authority
EPA is finalizing this rule under the existing authority provided
in CAA section 114. As noted in the preamble to the Final Rule for
Mandatory Reporting of GHGs (Part 98), CAA section 114 provides EPA
with broad authority to require the information mandated by this final
rule 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, 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 Sections I.C and II.Q of the
preamble to the final Part 98 rule and in the response to comments for
40 CFR part 98,\5\ EPA may gather information for a
[[Page 57673]]
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.
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\5\ Responses to major comments can be found in the preamble to
the final Part 98 (74 FR 56260). Responses to additional comments
can be found in volumes 1 through 42 of the response to comments
document entitled ``Mandatory Greenhouse Gas Reporting Rule: EPA's
Response to Public Comments'' in docket EPA-HQ-OAR-2008-0508 (see
http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EPA-HQ-OAR-2008-0508).
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In particular, CAA section 103 authorizes EPA to establish a
national research and development program, including nonregulatory
approaches and technologies, for the prevention and control of air
pollution, including GHGs. The data collected under this final rule
would be immediately available to EPA and could inform EPA's
implementation of CAA section 103(g) regarding improvements in sector-
based nonregulatory strategies and technologies for preventing or
reducing air pollutants.
The data collected through this final rule would be immediately
available to EPA and could be used for the purposes of providing
additional information to support more effective research and develop
actions to address GHG emissions. For example, corporate parent and
NAICS data would assist EPA in developing and improving emission
inventories, as well as characterizing emissions data in several
different ways. 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 strategies. For example, EPA could use the NAICS code
information gathered by this rule to compare results both within
industries and across industry sectors.
Finally, the information gathered through this rule will be
immediately available to enhance EPA's implementation of various
nonregulatory programs aimed at encouraging voluntary reductions of GHG
emissions. Under the authority of CAA section 103, EPA has launched a
variety of nonregulatory programs aimed at reducing emissions of
GHGs.\6\ The additional data will assist EPA by providing more detailed
information on possible sources, and facility operations within
industrial sectors for EPA to work with in the context of these
programs.
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\6\ For example, Climate Leaders, Combined Heat and Power
Partnership, and Energy Star.
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Given the broad scope of CAA section 114, it is appropriate for EPA
to gather the information required by this final rule because such
information is relevant to EPA's implementation of a wide variety of
CAA provisions and the burden of submitting such information is low.
D. Relationship to Other Programs
EPA investigated other Federal and non-Federal reporting programs
that collect information similar to the information that EPA will
collect under this rule to determine if any existing sources of
information met all EPA's objectives. These objectives included:
Identifying each reporter's highest-level U.S. parent company(s);
identifying each reporter's primary and any additional applicable NAICS
codes; identifying facilities using cogeneration; covering all
reporters subject to 40 CFR part 98; collecting data annually; and
having the information available to EPA. This section of the preamble
summarizes EPA's findings from our review of other programs. For
additional information on reporting requirements for these data
elements in existing Federal and non-Federal programs, please see
Section I.D of the proposal preamble (75 FR 18455, April 12, 2010) and
the following memoranda ``Review of Non-Federal Existing Greenhouse Gas
Reporting Programs Requiring Reporting of Parent Company Ownership''
and ``Summary of Existing State Greenhouse Gas Reporting Programs''
located in Docket EPA-HQ-OAR-2009-0925.
1. EPA and Other Federal Data Collection Programs
Federal voluntary programs, such as Climate Leaders and U.S.
Department of Energy's Voluntary Reporting of Greenhouse Gases Program,
collect some data elements (such as data related to NAICS codes) that
are similar to the data that EPA will collect under this rule. However,
none of the voluntary programs collect data from all of the facilities
and suppliers subject to 40 CFR part 98. In addition, the voluntary
programs that collect these data do not use the same definitions for
data elements.
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
CAA section 212(r); 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.\7\ TRI requires reporters to report the name
of their one parent company with the largest ownership interest in the
facility. TRI also requires the parent company's Dun & Bradstreet Data
Universal Numbering System (DUNS) \8\ identifier to be reported
annually. This amendment to 40 CFR part 98 differs from TRI parent
company reporting requirements in that it requires reporting of: (1)
All parent companies, rather than just one parent company; (2) the
physical address of each parent company, but not the DUNS identifier;
and (3) the percentage of ownership interest for each parent company.
EPA estimates that approximately two-thirds of the reporters subject to
40 CFR part 98 are also required to report to TRI.
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\7\ For purposes of TRI reporting, a reporter's parent company
is defined as the highest-level company located in the U.S. that
directly owns at least 50 percent of the voting stock of the
company. When a facility is owned by more than one company and none
of the owners directly owns 50 percent or more of the voting stock,
the facility reports the name of either the facility operator or the
owner with the largest ownership interest in the facility as its
U.S. parent company. (Toxic Chemical Release Inventory Reporting
Forms and Instructions, EPA 260-R-09-006, October 2009. page 34).
\8\ 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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Several EPA programs under the CAA, including the GHGRP,\9\ require
reporters to identify the ``owner or operator'' of each affected
facility. 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, because that
information is not necessary to determine compliance with particular
regulatory requirements.
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\9\ GHGRP refers to the implementation of 40 CFR part 98.
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Primary and Other NAICS Codes:
The final rule also requires facilities and suppliers reporting
under 40 CFR part 98 to report their primary and all additional
applicable NAICS codes.\10\ In the large majority of cases, facilities
and suppliers will submit a single NAICS
[[Page 57674]]
code. However, infrequently a facility/supplier may have two distinct
products/activities/services providing comparable revenue. In these
cases the facility/supplier may also report a second primary NAICS
code. 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
required to report under the GHGRP are also required to report to TRI.
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\10\ North American Industry Classification System (NAICS)
code(s) are defined as the six-digit code(s) that represents the
product(s)/activity(s)/service(s) at a facility or supplier as
listed in the Federal Register and defined in ``North American
Industrial Classification System Manual 2007,'' available from the
U.S. Department of Commerce, National Technical Information Service.
A reporter's primary NAICS code is the NAICS code that most
accurately describes the reporter's primary product/activity/service
based on revenue. Additional NAICS codes describe the product(s)/
activity(s)/service(s) at the facility that are not related to the
principal source of revenue.
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EPA collects some NAICS code information through routine compliance
reporting in multiple programs,\11\ but those programs either do not
require primary and other NAICS codes be designated as such, or they do
not define a primary NAICS code as it is defined in this rule. In
addition, none of the compliance databases provide complete coverage of
the facilities and suppliers subject to 40 CFR part 98.
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\11\ List of Programs Collecting NAICS: AIR Facility System
(AFS); Facility Response Plan (FRP); Integrated Compliance
Information System (ICIS); National Emissions Inventory (NEI);
National Pollutant Discharge Elimination System (NPDES); Resource
Conservation and Recovery Act Information (RCRAInfo); Risk
Management Plan (RMP); and Toxics Release Inventory System (TRIS).
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Cogeneration:
There are currently no EPA programs that require facilities or
suppliers to identify and report the use of cogeneration units located
at the facility. EPA's Combined Heat and Power Partnership, a voluntary
program, requires that partners agree to provide data on existing
cogeneration projects to help EPA determine climate benefits.\12\
However, this is a voluntary program and does not provide coverage of
all cogeneration units. The Energy Information Administration collects
information on cogeneration from utility and non-utility power
generators greater than 1 megawatt,\13\ but does not collect this
information from all facilities and suppliers subject to 40 CFR part
98.
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\12\ http://www.epa.gov/chp.
\13\ Energy Information Agency-860, Annual Electric Generator
Report http://www.eia.doe.gov/cneaf/electricity/page/eia860.html
and, Energy Information Agency-861, Annual Electric Power Industry
Report http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
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2. Non-Federal Data Collection Programs
EPA reviewed State and other reporting initiatives or protocols to
determine whether they contain information on U.S. parent companies,
NAICS code(s), or cogeneration that is comparable in terms of coverage
(of facilities and suppliers), and whether the specific information
collected is comparable in data quality and timeliness to that required
under this rule. EPA also considered whether the Agency had access to
and could itself release the data collected under these programs.
In general, the State and voluntary initiatives do not collect
information on U.S. parent company, NAICS code(s), or cogeneration that
is comparable to that required under this final rule regarding coverage
(of facilities and suppliers), specific information collected, and data
quality and timeliness. For additional information on the collection of
parent company, NAICS codes, and cogeneration information by States,
and other programs or initiatives, please see Section I.D. of the
proposal preamble (75 FR 18455) and the following memoranda ``Review of
Non-Federal Existing Greenhouse Gas Reporting Programs Requiring
Reporting of Parent Company Ownership'' and ``Summary of Existing State
Greenhouse Gas Reporting Programs,'' located in Docket EPA-HQ-OAR-2009-
0925.
II. The Final Rule and Reponses to Public Comments
This section of the preamble explains the requirements for the
final rule, describes the major changes to the proposed rule, and
summarizes the public comments and responses.
A. U.S. Parent Company
In the proposed rule published on April 12, 2010 (75 FR 18455), EPA
defined United States parent company(s) as the highest-level United
States company(s) with an ownership interest in the reporting entity as
of December 31 of the reporting year. Although the proposed rule
language included the requirements for only one option, EPA proposed
two options in the preamble for reporting U.S. parent company
information. As proposed, Option 1 would require all facilities and
suppliers subject to 40 CFR part 98 to provide the legal name and
physical address of their highest-level U.S. parent company. Reporters
would then select the appropriate ownership status from a list of three
types of ownership:
``Single ownership'' for entities owned by a single company that
is itself not owned by another company.
``Wholly owned'' for entities owned by a single company that is
itself owned by another company.
``Multiple ownership'' for entities owned by more than one
company).
Alternatively, in the proposed Option 2, reporters would provide
the names and physical addresses of all of their U.S. parent companies
and their respective percentages of ownership.
1. Summary of U.S. Parent Company Reporting Requirements
After considering all the comments received, EPA has selected
Option 2. Option 2 requires reporters to report the name(s) and
physical address(es) of all of their U.S. parent companies and their
respective percentages of ownership. For the final rule, EPA has
defined U.S. parent company(s) as highest-level U.S. company(s) with an
ownership interest in the reporting entity as of December 31 of the
year for which data are being reported. 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. Table 2 of this
preamble provides instructions for how facilities or suppliers should
report based on various ownership structures.
Table 2--Instructions for Reporting U.S. Parent Company(ies)
------------------------------------------------------------------------
How to report U.S. parent
Reporting scenario company
------------------------------------------------------------------------
The reporting entity is entirely owned Provide that company's legal
by a single U.S. company that is not name and physical address as
owned by any other company (e.g., it the U.S. parent company and
is not a subsidiary or division of report 100 percent ownership.
another company).
The reporting entity is entirely owned Provide the legal name and
by a single U.S. company which is, physical address of the
itself, owned by another company highest-level company in the
(e.g., it is a division or subsidiary ownership hierarchy as the
of a higher-level company). U.S. parent company and report
100 percent ownership.
The reporting entity is owned by more Provide the legal names and
than one U.S. company (e.g., company A physical addresses of all of
owns 40 percent, company B owns 35 the highest-level companies
percent, and company C owns 25 with an ownership interest as
percent). U.S. parent companies, and
report the percent ownership
of each company.
[[Page 57675]]
The reporting entity is entirely owned Provide the legal name and
by a foreign company. physical address of the
foreign company's highest-
level company based in the
U.S. as the U.S. parent
company and report 100 percent
ownership.
The reporting entity is partially owned Provide the legal name and
by a foreign company and partially physical address of the
owned by one or more U.S. companies. foreign entity's highest-level
company based in the U.S.,
along with the legal names and
physical addresses of the
other U.S. parent companies,
and report the percent
ownership of each company.
The reporting entity is owned by a The joint venture or
joint venture or cooperative. cooperative is its own U.S.
parent company. Provide the
joint venture or cooperative's
legal name and physical
address as the U.S. parent
company and report 100 percent
ownership.
The reporting entity is a federally Enter U.S. Government, and do
owned facility. not report physical address or
percent ownership.\14\
------------------------------------------------------------------------
---------------------------------------------------------------------------
\14\ Federally owned facilities are not required to report
percent ownership because all federally owned facilities are 100
percent owned by the Federal government. Additionally, the highest-
level U.S. ``parent'' for federally owned facilities is the U.S.
Government, and a physical address is not required to establish a
unique identity for the U.S. Government.
---------------------------------------------------------------------------
2. Summary of Major Changes Since Proposal
There are no major changes to the proposed rule for U.S. parent
company reporting requirements for Option 2. That option requires
facilities to report the name(s) and physical address(es) of all of
their U.S. parent companies and their respective percentages of
ownership. The rationale for the selection of Option 2 can be found in
Section II.A.3 of this preamble.
3. Summary of Public Comments and Responses
This section provides a summary of the comments and responses on
EPA's proposal to require reporting of U.S. parent company and
ownership information. Also summarized in this section are public
comments and responses on EPA's consideration of reporting numeric
identifiers for parent companies, in addition to parent company names.
General Comments on Reporting of U.S. Parent Company and Ownership
Information:
Comments: One commenter noted that collecting corporate identifier
information only from those facilities that emit 25,000 metric tons or
more of CO2 per year would provide only a partial picture of
a company's overall emissions, as some companies may own facilities
with emissions below the 25,000 metric ton threshold. This same
commenter suggested that EPA should encourage company-level data
reporting and require companies to report the relative emissions of
each of their facilities subject to the reporting rule as compared to
total company emissions.
Response: Regarding the first issue, when EPA established the GHGRP
last year, we completed a comprehensive threshold analysis and
determined that a 25,000 metric ton threshold generally suited the
needs of the Agency by providing comprehensive coverage of emissions
with a reasonable number of reporters, thereby creating the robust data
set necessary for the quantitative analyses of the range of likely GHG
policies, programs and regulations. For additional background on
thresholds, please see Section II.E. of the preamble of the final Part
98 (74 FR 56271, October 30, 2009). We did not reopen that decision in
the April 12, 2010 proposal to add U.S. parent company, NAICS codes,
and cogeneration as data elements to the annual report required under
40 CFR 98.3.
Regarding the second issue, EPA interprets the commenter's remarks
to indicate that companies, rather than individual facilities, should
report emissions. This issue was also addressed when EPA established
the GHGRP and was not revisited in the April 12, 2010 proposal. As
described in Section II.F of the preamble of the final Part 98, the
Agency elected to require reporting at the facility level in 40 CFR
part 98 because the purpose of this rule is to collect data from
suppliers and from facilities with direct GHG emissions above selected
thresholds for use in analyzing, developing, and implementing current
and potential future CAA GHG policies and programs. Facility-level data
are needed to support analyses of some types of potential GHG reduction
programs, such as New Source Performance Standards. Corporate-level
reporting was not selected because corporate reporting without
facility-specific details would not provide sufficient data to assess
many potential CAA GHG policies and programs. For additional discussion
of the level of reporting, please see Section II.F of the preamble of
the final Part 98 (74 FR 56273, October 30, 2009).
Moreover, as explained in the proposal and earlier in this
preamble, EPA determined that reporting of all U.S. parent companies
and their percent ownership will provide the Agency with necessary data
to develop and improve emission inventories and to enhance EPA's
implementation of various nonregulatory programs aimed at encouraging
voluntary reductions of GHG emissions. Requiring individual facilities
to report how their emissions compare to the total emissions of their
parent companies would be burdensome, because it would require each
facility to obtain information from all the other facilities (including
those located overseas) owned by their parent company(ies) in order to
make this type of comparison. EPA has concluded that the benefit of
this information does not outweigh the additional burden to the
regulated entity because the Agency and the public can compile similar
information at a much lower burden by analyzing all GHG reports
submitted by facilities with the same reported U.S. parent company.
Furthermore, as stated above, the GHGRP is a facility and supplier
level program designed to inform future programs and policies under the
CAA. EPA does not consider a full corporate footprint analysis to be
necessary to meet the goals of this program at this time.
Comment: A commenter from the offshore operations sector requested
that EPA clearly define the parent company reporting requirements
specific to offshore petroleum and natural gas facilities. In
particular, the commenter noted that while the offshore facility itself
may have a single or multiple owners, each development and/or
production field associated with the facility may have multiple owners.
The commenter added that this situation could complicate the
determination of
[[Page 57676]]
percentage of ownership interest for each reporting entity.
Response: Reporting entities (facilities or suppliers) are required
to report information on their own parent company or companies, as
described in Table 2 of this preamble. Parent company reporting is
limited to information on the parents of the reporting entity itself,
and does not include parent company information on any associated
entities or customers that are not part of the reporting entity. The
facility definition for an offshore petroleum/natural gas operator in
the proposed 40 CFR part 98, subpart W: Petroleum and Natural Gas
Systems rulemaking (75 FR 18608, April 12, 2010) is limited to the
offshore platform. Production fields and development fields that
produce oil or gas sent to the platform are not considered part of the
facility. Therefore, the facility reports the parent company or
companies for the platform and secondary platform structures connected
to the platform via walkways, storage tanks associated with the
platform structure and floating production and offloading equipment,
and does not include company information for any associated entities,
such as production or development fields.
To further clarify, the rule language was modified to include the
phrase, ``of the reporting entity'' in paragraph 98.3(c)(11), which
requires that reporting entities report ``Legal name(s) and physical
address(es) of the highest-level United States parent company(s) of the
reporting entity and the percentage of ownership interest for each
listed parent company as of December 31 of the year for which data are
being reported * * *.''
EPA understands that operations at facilities in the oil and
natural gas sector can be complex with many partners working together
to explore for, produce, process, transport, and distribute oil and
natural gas products. Given the commenter's use of the term ``owner'',
EPA clarifies here that requirements to identify the ``owner'' of an
affected facility are different from the requirements to report U.S.
parent company. For example, ``owner'' refers to the person or legal
entity that owns the facility and its productive infrastructure. Under
this final rule, U.S. parent company means the highest-level U.S.
company(s) with an ownership interest in the reporting entity. A
regulated entity may report ``owner'' differently than U.S. parent
company in some cases. For example, a facility may report ``owner'' and
U.S. parent company differently if the legal entity that owns the
facility is a subsidiary to a U.S. parent company. A facility may also
report ``owner'' and U.S. parent company differently if an individual
with no company affiliation has an ownership interest in a facility,
since ``owner'' covers persons while U.S. parent company does not.
Proposed Options 1 and 2:
Comments: EPA received comments supporting both options. Comments
favoring Option 1 (i.e., requiring reporting the legal name and
physical address of the reporter's highest-level U.S. parent company
with the largest ownership share and the selection of the ownership
type that best describes the ownership structure for the reporter),
noted that Option 1 is the less burdensome option and questioned
whether the potential benefits of Option 2 outweighed the burden of
collecting the information. Furthermore, the comments stated that
complex ownership structures make it unlikely the person completing the
form would be able to provide the information on all parent companies.
The comments also noted that identifying the general corporate
structure (as proposed in Option 1) should provide the information
required by EPA and that submission of the name of the highest-level
U.S. company with the largest ownership interest is consistent with TRI
reporting requirements.
Commenters favoring Option 2 (i.e., requiring reporting of the
legal names, physical addresses and respective percent ownership of all
companies with an ownership stake in the regulated entity), noted that
Option 1 would overstate the GHG contribution of the largest ownership
interest and omit the contribution of the smaller ownership
interest(s). The commenters stated that this bias could limit the
usefulness of the parent company data and that Option 2 provides a more
complete picture of reporters' ownership, thereby providing greater
transparency regarding corporate GHG emissions. Some commenters added
that Option 2 would be more effective in terms of corporate
accountability. In addition, commenters noted that Option 2 complements
recent Securities and Exchange Commission (SEC) Interpretive Guidance
on certain existing disclosure rules that requires public companies to
disclose the impact that climate change or regulation related to
climate change may have on their business. An industry commenter stated
that reporters should not have difficulty completing the reporting
under either option.
Response: After reviewing the comments received, EPA selected
Option 2 because it provides more complete information on parent
company ownership for reporters with multiple parent companies, thereby
providing greater accuracy in aggregating emissions to the parent
company level.
EPA acknowledges that there is a modest additional burden
associated with Option 2 for those reporters with multiple owners and
that Option 1 would be the lower cost Option.\15\ The additional total
national cost of Option 2 however, was estimated to be less than two
percent greater than Option 1. The burden estimate for Option 2
incorporates the additional effort associated with reporters asking
legal or management staff for information regarding complex ownership
structure. Option 1 supporters neither offered supporting information
or estimates of the additional burden nor refuted EPA's burden
estimates. EPA concluded that the additional benefits of Option 2
compared to Option 1 outweigh the potential costs of collecting more
comprehensive parent company information because the additional cost of
Option 2 is minimal while the additional benefit is substantial.
---------------------------------------------------------------------------
\15\ EPA's estimate of the burden of Option 1 versus Option 2
was presented in the Economic Impact Analysis for the proposed rule.
An updated estimate of the burden associated with Option 2 was
included in the Economic Impact Analysis for the final rule. These
documents are available at http://www.regulations.gov under Docket
ID No. EPA-HQ-OAR-2009-0925.
---------------------------------------------------------------------------
Legal Authority to Collect Parent Company Information:
Comments: Two commenters questioned the need for EPA to collect
parent company information. One commenter stated that company
affiliation should not be used as a factor in policy development. The
other commenter's primary objection was that EPA had been vague and
non-specific in justifying collection of parent company information.
The commenter stated that EPA's authority to collect information under
CAA section 114 is limited by the requirements of the Paperwork
Reduction Act (5 CFR 1320), under which EPA must demonstrate that the
requested information has ``practical utility.'' The commenter stated
that EPA had not met the definition of ``practical utility'' in its
justification for collecting parent company information. The commenter
added that because practical utility is necessary for the Office of
Management and Budget (OMB) to grant an Information Collection Request
(ICR), EPA should not finalize this requirement until it has identified
and solicited comment on a practical use.
Response: As explained in the Section I.C of this preamble, CAA
section 114 is
[[Page 57677]]
sufficiently broad for EPA to collect this information. Section 114 of
the CAA generally authorizes EPA to gather information from any person
who owns or operates an emissions source, who is subject to a
requirement of the CAA, who manufacturers control or process equipment,
or who the Administrator believes has information necessary for the
purposes of CAA section 114(a). EPA may gather information for purposes
of establishing implementation plans or emissions standards,
determining compliance, or ``carrying out any provision'' of the CAA.
For these reasons, the Administrator may request that a person, on a
one-time, periodic or continuous basis, establish and maintain records,
make reports, install and operate monitoring equipment and, among other
things, provide such information the Administrator may reasonably
require. This language has been interpreted to grant EPA broad
authority. See, e.g., Dow Chemical Co. v. U.S., 467 U.S. 227, 233
(1986) (``Regulatory and enforcement authority generally carries with
it all modes of inquiring and investigation traditionally employed or
useful to execute the authority granted''). This information is
included in the existing ICR.
It is reasonable for EPA to request the parent company information.
Once EPA has this information, EPA will be able to immediately use it
to assist in implementation of agency policy and program goals
including developing and improving emission inventories and enhancing
the implementation of programs aimed at reducing emissions of GHGs. For
more information, refer to Section I.C of this preamble, where EPA has
further explained the immediate usefulness of this information under
the CAA.
Definition of U.S. Parent Company:
The proposed rule included a definition of ``United States parent
company(s)'' as follows: ``United States parent company(s) means the
highest-level United States company(s) with an ownership interest in
the reporting entity as of December 31 of the reporting year.''
Comment: One commenter requested that EPA clarify that ``reporting
year'' means the year for which emissions data are being reported and
not the year when the report is submitted to EPA.
Response: The intent in the proposal was for ``reporting year'' to
be interpreted as the year during which GHG data are monitored and
collected. The language has been clarified in the final rule. The
revised definition of U.S. parent company in the final rule reads:
``United States parent company(s) means the highest-level United States
company(s) with an ownership interest in the reporting entity as of
December 31 of the year for which data are being reported.''
Reporting by Foreign Owned Companies:
EPA solicited comments on whether facilities and suppliers owned by
foreign companies always have a U.S.-based parent company as defined in
the proposed rule. EPA was interested in receiving comments, data, and
analysis on whether there may be instances in which foreign-owned
facilities and suppliers do not have a U.S. parent company because we
wanted to determine if U.S. parent company reporting would be
appropriate for all reporters subject to 40 CFR part 98.
No comments were received on this topic, but some minor clarifying
changes were made in the final rule requirements for parent company
reporting for foreign corporations. For consistency, some of these
minor clarifying changes were also made in the final rule requirements
for parent company reporting for multiple U.S. companies. In the final
rule, if the reporting entity is entirely owned by a foreign company,
reporters must provide the legal name and physical address of the
foreign company's highest-level company based in the U.S. as the U.S.
parent company, and report 100 percent ownership. If the reporting
entity is partially owned by a foreign company and partially owned by
one or more U.S. companies, reporters provide the legal name and
physical address of the foreign owner's highest-level company based in
the U.S. as the U.S. parent company, along with the legal names and
physical addresses of the other U.S. parent companies and the percent
ownership of each of these companies.
Reporting of Numeric Corporate Identifiers:
In the preamble for the proposed rule, we discussed a requirement
to report a numeric identifier for parent company(s) in addition to the
parent company name. EPA requested comments on corporate identifiers
and whether there are any additional numeric identifiers that should be
considered for this final rule. Ultimately, EPA chose not to require
reporting of a corporate numeric identifier, upon review of comments
received and in recognition of the limitations of the possible private
and public sources for such identifiers.
Comments: Numerous comments stated that requiring a unique numeric
identifier for each parent company would facilitate aggregation of the
data and would achieve the most accurate reporter-to-parent linkages.
These commenters noted that inconsistencies in reporting corporate
parent names (``E.I. Du Pont De Nemours'' versus ``Du Pont Inc.'')
increases the difficulty of the reporter-to-parent aggregation and that
numerical identifiers would increase the accuracy and consistency of
the reported data. While commenters acknowledged the significant
limitations in the numeric identifiers discussed in the preamble to the
proposed rule, including Data Universal Number System (DUNS), Committee
on Uniform Security Identification Procedures (CUSIPs), Federal
Employer Identification Numbers (FEINs), and stock tickers, some
commenters recommended using these identifiers, or using new, EPA-
generated identifiers. Commenters noted that using numeric identifiers
could provide consistent and accurate reporting that minimizes the
potential of data entry errors. Several comments supported EPA's
decision not to include a requirement to report numeric corporate
identifiers because existing and available identifiers do not meet
EPA's objective of collecting comprehensive corporate identifier
information for all facilities and suppliers subject to 40 CFR part 98.
Response: Based on a review of the comments received and on prior
research, EPA decided to retain its position as stated in the proposal,
and the final rule does not include reporting of a corporate identifier
for the reasons described in this section of the preamble.
EPA agrees with the comments that numeric identifiers could
potentially facilitate data aggregation, however, the currently
available numeric identifiers considered by EPA and proposed by
commenters have shortcomings such that they would not enable EPA to
adequately aggregate data. As noted in Section II.A of the preamble and
in the memorandum ``Summary of Existing Company Identifier System''
(located in docket EPA-HQ-OAR-2009-0925), some of the identifiers
considered (e.g., stock tickers, CUSIP, SEC central index key, and
LexisNexis) cover only public companies. EPA expects that reporters
under the GHGRP will cover both public and privately-held companies and
does not want to exclude a portion of reporters from Agency analyses.
Furthermore, limiting the reporting of a numeric identifier to only
public companies would place an additional burden on only this subset
of reporters. The privately held databases, such as DUNS and CUSIPs,
require licensing agreements, which potentially restrict the public use
of that data. Finally, in
[[Page 57678]]
accordance with Internal Revenue Code 6103, FEINs can only be collected
and released on a voluntary basis and EPA would have no means to ensure
that all facilities/suppliers would report their FEINs.
Additionally, the final rule requires both the reporter's parent
company name and the parent company's headquarters physical address,
which is intended to improve considerably on EPA's ability to uniquely
identify corporate parents. To address comments related to difficulties
in aggregating data using the reported parent company name, EPA plans
to implement methods to standardize the parent company names reported.
Standardizing the parent company names will improve the accuracy of
aggregating data by parent company name by limiting human errors (e.g.,
typing entry errors), and removing inconsistent abbreviations (e.g.,
Co. vs. Company).
In response to comments suggesting EPA assign new numeric
identifiers to parent companies, that task is outside the scope of this
rulemaking. However, the Agency is broadly exploring future development
of unique, EPA-generated numeric identifiers for parent companies.
These comments reinforce EPA's understanding that such identifiers
would be valuable for aggregating facility level data to the corporate
level. Any development of these identifiers would be a future effort,
and submission of such identifiers is not included in this final rule.
B. NAICS Code(s)
The proposed rulemaking (75 FR 18455) includes a requirement to
report the primary NAICS code applicable to each reporter, as well as
any additional NAICS codes in order of largest revenue to smallest. The
proposal defined NAICS code as the six-digit code(s) that represents
the product(s)/activity(s)/service(s) at a facility or supplier as
defined in ``North American Industrial Classification System Manual
2007,'' available from the U.S. Department of Commerce, National
Technical Information Service.
Inclusion of NAICS code reporting was proposed to provide
information to assist EPA in aggregating and analyzing the data
collected under 40 CFR part 98 at the sector level.
1. Summary of NAICS Code Reporting Requirements
After considering all of the comments received, this final rule
requires that each facility or supplier required to report under 40 CFR
part 98 report its primary NAICS code and any additional applicable
NAICS codes. For the purposes of this rule, EPA considers a reporter's
primary NAICS code to be the six-digit code (or codes) that most
accurately describes the reporter's primary product/activity/service,
as defined in ``North American Industry Classification System Manual
2007,'' available from the U.S. Department of Commerce, National
Technical Information Service.\16\ The primary NAICS code (or codes) is
the product/activity/service that is the principal source of revenue
for the facility or supplier. For the purposes of this rule, EPA
considers additional NAICS codes to be those codes that describe the
product(s)/activity(s)/service(s) at the facility, but that are not
related to the principal source of revenue.
---------------------------------------------------------------------------
\16\ The Office of Management and Budget has proposed revisions
to the North American Industry Classification System for 2012
onward. See ``North American Industry Classification System--Updates
for 2012'' 75 FR26855, May 12, 2010. These revisions will not affect
this rulemaking, which requires reporters to use the NAICS codes
defined in the North American Industry Classification System Manual
2007, regardless of whether these codes are updated in the future.
---------------------------------------------------------------------------
The following instructions apply to reporters regarding the
reporting of NAICS codes: Enter the six-digit NAICS code that most
accurately describes the reporter's principal product/activity/service
and designate it as ``primary.'' Each reporter must provide one primary
NAICS code, but may also designate a second code as primary if the
reporter has two distinct products/activities/services providing
comparable revenue. Provide all additional NAICS codes that describe
the reporter's products/activities/services but that are not related to
the principal source of revenue. Federal facilities should report the
NAICS code that most closely represents the activities taking place at
the site. For example, a Federally-owned, fossil fuel-fired electric
power plant would be classified as NAICS 221112 -- Fossil Fuel Electric
Power Generation. For additional guidance on how to determine the
proper NAICS code(s), go to http://www.census.gov/eos/www/naics/.
The use of the term ``primary NAICS code'' in this rule and the
methodology for determining the primary NAICS code are consistent with
the NAICS code use and methodology used by the U.S. Census Bureau and
other government agencies. In addition, the instructions for reporting
NAICS codes in the final rule are similar to those used by EPA's TRI
and other EPA information collections.
2. Summary of Major Changes Since Proposal
The major changes since proposal are identified in the following
list. The rationale for these changes can be found in Section II.B.3 of
this preamble:
In the final rule, reporters must provide one primary
NAICS code and may also provide a second primary NAICS code if they
have two distinct products/activities/services providing comparable
revenue. The proposed rule did not specify the number of primary NAICS
codes that should be reported.
In this final rule, no ordering of the additional (i.e.,
non-primary) NAICS codes is required. The proposed rule required that
additional NAICS codes be entered in order of largest revenue to
smallest.
3. Summary of Public Comments and Responses
This section provides a summary of the comments and responses on
EPA's proposal to require reporting of primary and all additional NAICS
codes by facilities and suppliers subject to 40 CFR part 98.
Primary NAICS Code Reporting Requirements:
Comments: Many commenters supported the NAICS codes reporting
requirements as proposed. Commenters stated that requiring the full
six-digit NAICS code(s) will allow data users to connect reported GHG
data with other information on U.S. industries, facilitating
comparisons within and across industry sectors. Other commenters noted
that collection of NAICS codes greatly expands the utility of 40 CFR
part 98 data, and provides important data relevant to industry sector
analyses. One industry source added that NAICS codes are easily
obtained.
Two commenters requested that EPA allow reporting of more than one
primary NAICS code. These commenters stated that this is particularly
important for large facilities that consist of separate economic units,
such as a petroleum refinery and a chemical plant. The commenters added
that this could be important if any future climate change legislation
differentiates regulatory requirements according to industry sector or
NAICS codes, where requirements for refineries and chemical plants
could differ. Accordingly, the commenters concluded, EPA should ensure
that the final rule and any required electronic reporting tool allow
for entering more than one primary NAICS code per reporter.
[[Page 57679]]
Finally, one commenter stated that EPA should obtain primary NAICS
codes from the Census Bureau.
Response: EPA agrees with the commenters that the NAICS code
information will provide a valuable data element for sector-level
analyses. EPA considered using three- and four-digit NAICS codes, but
proposed and is requiring reporting of the six-digit NAICS codes
because they provide more detailed information for analyses. In
addition, use of the six-digit NAICS codes is consistent with TRI and
other EPA databases, allowing sector-level data to be compared across
EPA data sets.
Upon consideration of the comments received regarding multiple
primary NAICS, EPA requires reporting in the final rule of one primary
NAICS code that most accurately describes the reporting entity's
primary product/activity/service. A reporting entity that has two
distinct products/activities/services providing comparable revenue may
report a second primary NAICS code. Allowing a second NAICS code to be
designated as a primary NAICS code gives facilities and suppliers that
have two distinct lines of business with comparable revenue the ability
to more accurately reflect the nature of their operations.
In response to the commenters' statement that the electronic
reporting tool for the GHGRP should allow entry of more than one
primary NAICS code per reporter, EPA's reporting tool will require the
reporters to designate one NAICS code as primary, and will allow up to
two NAICS codes to be designated as primary.
EPA also considered whether primary NAICS codes could be obtained
from the Census Bureau, as suggested by one commenter. However, the
facility-level Census Bureau data are confidential as specified in U.S.
Code Title 13 \17\, and cannot be accessed by EPA. Therefore, the final
rule requires primary and all additional NAICS codes to be reported to
EPA by the reporting entity.
---------------------------------------------------------------------------
\17\ U.S. Code Title 13 guarantees the confidentiality of census
information and establishes penalties for disclosing this
information. See http://www.census.gov/geo/www/luca2010/luca_title13.html.
---------------------------------------------------------------------------
Additional NAICS Codes Reporting Requirements:
Comments: Several commenters opposed EPA's proposal that the
additional (i.e., non-primary) NAICS codes reported be listed in the
order of the largest source of revenue to the smallest. Comments in
opposition stated this ranking: (1) Would add an additional and
unnecessary burden and expense; (2) does not add value to the emissions
information being reported; (3) is an arbitrary exercise, where
different companies, or different employees within a company, could
derive different ranking of the additional NAICS codes; (4) is
inconsistent with TRI requirements where non-primary NAICS codes are
reported, but not ranked; and (5) could disclose CBI that could be
accessed by foreign or domestic competitors. One commenter suggested
that reporting of NAICS codes beyond the primary NAICS codes should be
voluntary.
Response: EPA carefully considered the information provided by
commenters on reporting additional (i.e., non-primary) NAICS codes in
descending order based on revenue. As a result of this review, the
final rule does not require that the additional NAICS codes be reported
in a particular order. After reviewing the comments received, EPA
agrees that ordering the additional NAICS codes by revenue could result
in added burden that may not provide additional benefit compared to a
list of additional NAICS codes that is not ordered, because emissions
are not necessarily related to revenue. Ranking of additional NAICS
codes, therefore, is not required in the final rule. The comments
regarding the ranking of additional NAICS codes, including the
possibility of different rankings by different employees, the need for
consistency with TRI, and the possibility of divulging CBI are not
addressed because EPA has determined that requiring ranking will not
provide the Agency with useful additional data when compared to the
burden.
In response to the comment suggesting that reporting of additional
NAICS codes be voluntary, EPA retains the proposed approach that
requires mandatory reporting of all additional NAICS codes. To conduct
analyses of the GHG emissions associated with different sectors or
different types of operations, it is critical that these data be
reported consistently among reporters. If reporting of additional
(i.e., non-primary) NAICS were voluntary, it would not be possible to
distinguish if a reporter entered only one NAICS code because only one
type of operation is conducted, or if only one NAICS code was entered
due to a voluntary decision not to enter additional NAICS codes. This
inconsistency in reporting additional NAICS codes would limit the value
of analyses characterizing non-primary operations. To maintain the
ability to conduct robust analyses using the reported NAICS codes,
reporting of additional NAICS codes is required in the final rule.
Definition of NAICS Codes:
In the proposed rule, EPA provided a definition for ``North
American Industry Classification System (NAICS) codes'' as follows:
``North American Industry Classification System (NAICS) code(s) means
the six-digit code(s) that represents the product(s)/activity(s)/
service(s) at a facility or supplier as defined in ``North American
Industrial Classification System Manual 2007,'' available from the U.S.
Department of Commerce, National Technical Information Service.'' No
comments were received on this definition, and no changes were made in
the final rule to the definition of ``North American Industry
Classification System (NAICS) codes.''
C. Cogeneration
In the proposed rulemaking (75 FR 18455), EPA proposed requirements
for reporting the use of cogeneration by indicating (i.e., checking yes
or no) whether some or all of the reported GHG emissions are from one
or more cogeneration units. EPA also solicited comment on whether this
reporting should be mandatory or voluntary. In the proposal, EPA
defined a cogeneration unit as a unit that produces electrical energy
and useful thermal energy for industrial, commercial, or heating or
cooling purposes, through the sequential or simultaneous use of the
original fuel energy.
1. Summary of Cogeneration Reporting Requirements
The final rule requires reporters to indicate whether reported
emissions include emissions from a cogeneration unit (yes or no)
located at the facility. Cogeneration units can result in net
reductions (i.e., across facilities) of GHG emissions compared to
separate power and heat generation.
Information on the types and characteristics of facilities that
employ cogeneration technologies and the performance of cogeneration
units could be important to future development of GHG mitigation
strategies. EPA recognizes that the information required under this
rule may not, by itself, be sufficient to determine the actual quantity
of GHG emissions occurring from cogeneration units at individual
reporting facilities, companies or NAICS sectors. It also does not
provide the degree to which those cogeneration emissions displace
fossil fuel or other fuel source emissions from central station
generation plants. However, the information reported will allow EPA and
States to identify facilities using cogeneration. In addition, EPA
recognizes that not all emissions at
[[Page 57680]]
individual reporting facilities with cogeneration are attributable to
the cogeneration unit(s). As such, it should not be inferred that all
emissions at an individual reporting facility with cogeneration are
attributed to the cogeneration unit(s).
2. Summary of Major Changes Since Proposal
The final rule retains the proposed rule language and requires
reporters to indicate whether reported emissions include emissions from
a cogeneration unit. Reporting of this information is mandatory.
3. Summary of Public Comments and Responses
This section provides a summary of the comments and responses on
EPA's proposal to require reporters to identify use of a cogeneration
unit located at the facility.
Cogeneration Reporting Requirements:
Comments: Numerous comments strongly supported EPA's proposal to
require reporters to indicate whether some or all of the reported GHG
emissions are from a cogeneration unit. Commenters stated that
collecting the information on cogeneration use will help EPA understand
where the practice is being used, and how to encourage its use where
appropriate. None of the comments opposed EPA's proposal to collect
cogeneration information.
One commenter requested that EPA provide in the rule additional
discussion of the benefits of cogeneration technology as an efficient
method to reduce net GHG emissions. This commenter also requested that
EPA require power production facilities to report GHG emissions on a
net GHG per usable energy produced basis to ensure that the benefits of
total system efficiency are recognized.
Another commenter recommended EPA consider whether additional
information on cogeneration units should be required in the future,
such as their capacity or how frequently they are used.
Finally, a commenter recommended that EPA clarify and/or modify the
rule to state that: (1) Local Distribution Companies (LDCs) should be
required to report only the presence of cogeneration units at
facilities owned and operated by the LDC; and (2) as suppliers, LDCs
are not responsible for reporting cogeneration units owned and operated
by the LDC's individual customers.
Response: EPA agrees with comments that the cogeneration
information will be informative, enabling EPA to identify the types and
characteristics of facilities that employ cogeneration technologies. By
collecting this information annually, EPA will also be able to track
changes in the use of this technology in individual sectors and across
the U.S. economy.
EPA agrees with the comment that there are efficiencies related to
the use of cogeneration. However, the regulatory framework for the
GHGRP is not the appropriate place to describe the benefits of a
technology.
In response to the comment requesting that power production
facilities report GHG emissions on a net GHG per usable energy
produced, the information the commenter asks EPA to collect is well
beyond the intended scope of this rule. The scope of this rule is to
obtain general information on cogeneration use for future development
of GHG mitigation strategies and not to support the development of
standards of performance for industrial facilities or to amend the
units in which data are required to be reported in 40 CFR part 98.
In response to the comments requesting EPA collect more detailed
information on reporters' cogeneration units, EPA recognizes that the
information required under this rule will not, by itself, be sufficient
to determine the actual quantity of GHG emissions occurring from
cogeneration units at individual reporting facilities, companies or
NAICS sectors. The cogeneration information required under the final
rule will improve EPA's understanding of the current implementation of
cogeneration while minimizing burden on reporters; therefore, EPA is
not currently exploring expansion of the cogeneration reporting
requirements.
EPA agrees with the comment regarding the requirements for LDCs to
report cogeneration. It was not our intent to require LDCs to collect
cogeneration information on their customers. EPA is clarifying in this
response that LDCs are required to report the presence of cogeneration
facilities owned and operated by the LDC, but are not required to
report whether units owned and operated by the LDC's customers have
cogeneration units.
Comments on Making Cogeneration Reporting Voluntary:
EPA requested comments on whether the cogeneration reporting in the
final rule should be mandatory or voluntary. No comments supported
voluntary reporting of the cogeneration information; however, many
commenters stated their support for EPA's proposal to require that
reporters indicate whether or not any of their reported emissions are
from a cogeneration unit at the facility. As in the proposed rule, the
final rule includes mandatory reporting to indicate if any reported
emissions are from cogeneration units located at the facility.
Definition of Cogeneration:
The proposed rule included a definition of ``cogeneration unit'' as
follows: ``Cogeneration unit means a unit that produces electrical
energy and useful thermal energy for industrial, commercial, or heating
or cooling purposes, through the sequential or simultaneous use of the
original fuel energy.'' EPA based this definition of cogeneration on
the Agency's Acid Rain Program to promote consistency and comparable
data collection across EPA regulatory programs. No comments were
received on this definition, and no changes were made in the final rule
to the definition of ``cogeneration'' included in the proposed rule.
D. Frequency of Reporting
In the proposed rulemaking (75 FR 18455), EPA proposed that
facilities and suppliers subject to 40 CFR part 98 be required to
submit information regarding their U.S. parent company(s), their NAICS
code(s), and whether or not any of their reported emissions are from a
cogeneration unit, on an annual basis, as part of their annual reports.
EPA further proposed that regulated entities be required to report this
information as it exists on December 31 of the year for which data are
being reported, to be consistent with other EPA reporting programs,
such as TRI.
1. Summary of the Final Rule Requirements
Under the final rule, facilities and suppliers subject to 40 CFR
part 98 are required to annually submit information regarding their
U.S. parent company(s), their NAICS code(s), and whether or not any of
their reported emissions are from a cogeneration unit, as part of their
annual GHG reporting. Regulated entities report this information as it
exists on December 31 of the year for which data are being reported.
Facilities will be required to report this data beginning in 2011 for
the 2010 reporting year.
2. Summary of Major Changes Since Proposal
There have been no changes since proposal.
3. Summary of Public Comments and Responses
This section provides a summary of the comments and responses on
EPA's
[[Page 57681]]
proposal to require annual reporting for the data elements added to 40
CFR part 98 in the final rule (i.e., U.S. parent company(s), NAICS
code(s), and cogeneration by facilities and suppliers). While EPA was
interested in receiving comments on the proposal in its entirety, EPA
specifically solicited comments on the utility and burden of updating
the additional information required by the proposed rule on a more
frequent basis than annually, for example, whenever changes occur with
respect to a reporter's U.S. parent company or NAICS code(s).
Comments: The comments received largely supported EPA's proposal to
require reporting of U.S. parent company(s), NAICS code(s), and
cogeneration units on an annual basis, rather than more frequently. One
commenter supporting annual reporting stated a concern with the
potential burden and complexity of updating corporate parent
information more often than annually. For more frequent reporting, the
commenter added, EPA would need to identify a specific need for the
increased level of detail.
One commenter noted that if reporting were required quarterly, data
could be aggregated to each parent company's fiscal year. Another
commenter stated that requiring updates to be reported whenever a
change occurs in the reporter's parent company or NAICS code should not
be a problem. This commenter added that the annual reporting
requirement, however, may be sufficient.
Response: EPA recognizes that a reporter's U.S. parent company(s)
and/or NAICS code(s) may change during the course of the year. In some
instances this information may even change multiple times throughout
the year. However, EPA agrees with the commenters that requiring
updates to these data elements more than once a year, such as every
time there is a change in a reporter's U.S. parent company(s) or NAICS
code(s), would result in an increased burden for minimal additional
information. In addition, requiring annual reporting would be
consistent with the requirements of 40 CFR part 98. Therefore, the
final rule requires annual reporting of reporters' U.S. parent
company(s), NAICS code(s), and whether or not any of their reported
emissions are from a cogeneration unit, as part of their regularly
scheduled annual reports, as proposed. More frequent reporting, such as
when a change in parent company or NAICS occurs, is not required.
E. Applicability of the Reporting Requirements
1. Summary of Applicability of the Reporting Requirements
The final rule applies to all reporters; it requires all facilities
and suppliers subject to 40 CFR part 98 to report the additional
information included in this rule. The descriptions of the terms
``primary NAICS code(s),'' and ``additional NAICS code(s),'' and the
definitions of ``United States parent company'' and ``cogeneration
unit'' in the final rule apply only to this rule, which adds these data
elements to the list of items that must be reported under 40 CFR
98.3(c). The definitions and descriptions of terms in this final rule
do not change the applicability of any subpart in the promulgated 40
CFR part 98. They also do not change the level of reporting or who is
required to submit reports.
The definition of United States parent company does not override or
change the meaning of similar terms that refer to company level or
corporate level requirements. Many subparts (including 40 CFR part 98,
subparts A, C, G, K, P, Q, R, Y, GG, and HH) use the term ``company
records,'' which is defined in 40 CFR part 98, subpart A. The term
``corporate level'' is used in 40 CFR part 98, subpart MM to require
importers and exporters to report at the corporate level, rather than
the facility level. ``Corporate documents'' are referred to in 40 CFR
part 98, subpart A. None of these terms, definitions, or associated
requirements are affected by the definition of ``United States parent
company'' in the final rule.
In addition, the definition of United States parent company in the
final rule does not affect the definitions of ``importer'' and
``exporter'' in 40 CFR part 98, subpart A, or the applicability of the
suppliers source categories. The definition in the final rule also does
not affect the term ``local distribution company'' as described in 40
CFR part 98, subpart NN. These terms retain their meaning in 40 CFR
part 98.
2. Summary of Major Changes Since Proposal
There have been no changes since the proposal.
3. Summary of Public Comments and Responses
No comments were received on the applicability of the reporting
requirements.
F. Miscellaneous Public Comments and Responses
EPA also received comments of a more general nature that did not
relate specifically to reporting of parent company, NAICS codes,
cogeneration, frequency of reporting, or applicability. These comments
and EPA's responses are summarized in this section.
Comments: Two commenters voiced general support for this rule. The
commenters asserted that the inclusion of the requirements to report
NAICS codes and corporate information will enable researchers to
conduct analyses of corporate GHG emissions. Another commenter voiced
opposition to the rule, stating that the government already has enough
rules and regulations.
Response: EPA thanks the commenters for their input. The focus of
this rule is to collect accurate data on U.S. GHGs from suppliers and
facilities above specified thresholds for use in analyzing and
developing potential GHG policies and environmental programs. This rule
will help EPA carry out its duties under the CAA while adding a very
minimal burden to reporting entities.
Comment: One commenter requested that EPA make the information
collected under this rule available to the public and easily accessible
to all interested parties.
Response: EPA published a proposed confidentiality determination on
July 7, 2010 (75 FR 39094), which addressed the confidentiality of data
reported under 40 CFR part 98. In that action, EPA proposed which
specific data elements would be treated as CBI and which data elements
must be available to the public under CAA section 114. EPA has received
several comments on the proposal, and is in the process of considering
these comments. A final determination will be issued before any data
are released, and data that are not determined to be confidential will
be published in a way that will be easily accessible to the public.
Comment: One commenter suggested that EPA should develop a
comprehensive company-level GHG inventory.
Response: While the development of a comprehensive company-level
GHG inventory is outside the scope of this rulemaking, EPA notes the
commenter's suggestion and thanks the commenter for their input. For a
discussion of why EPA chose to require facility-level reporting, please
see Section II.F of the preamble of the final Part 98 (74 FR 56273,
October 30, 2009) as well as Section II.A of the preamble to this final
rule. For a discussion of why EPA chose
[[Page 57682]]
a 25,000 metric ton CO2e reporting threshold for most
sources, please see Section II.E. of the preamble of the final Part 98
(74 FR 56271, October 30, 2009) as well as Section II.A of the preamble
to this final rule.
G. Correction to Subpart A
We also are correcting a drafting error in the revision to 40 CFR
98.2(a)(2) that was published on July 12, 2010 (75 FR 39758). In the
July 12, 2010 notice, we restructured 40 CFR 98.2(a) to move the lists
of source categories that are subject to the rule from the text into
tables. This restructuring revision made no substantive change to the
applicability provisions of the rule, but just reformatted that section
of the rule to better accommodate the addition of new source categories
for which reporting would become effective in future years. To make
this change required conforming changes to the text of 40 CFR 98.2(a)
to refer to the tables. The July 12, 2010 change to 40 CFR 98.2(a)(2)
reads that the rule applies to:
A facility that contains any source category that is listed in
Table A-4 of this subpart that emits 25,000 metric tons
CO2e or more per year in combined emissions from
stationary fuel combustion units, miscellaneous uses of carbonate,
and all applicable source categories that are listed in Table A-3
and Table A-4 of this subpart.
The published clause inadvertently omitted the word ``and'' prior
to the clause ``* * * that emits 25,000 metric tons CO2e * *
*'' Despite this omission, the regulatory text as it appears in the
July 12, 2010 final rule can and should be interpreted to apply to a
facility that contains any source category listed in Table A-4 of this
subpart if combined emissions from all applicable source categories at
the facility are 25,000 metric tons CO2e per year or more.
Nonetheless, restoring the inadvertently omitted word ``and'' to the
paragraph makes it absolutely clear that the 25,000 metric tons
CO2e threshold applies at the facility level and not at the
source category level. This interpretation is clear from the original
rule and from the preamble to the proposal for the subpart A
restructuring (75 FR 12451 and 75 FR 12489) and the preamble to the
final rule for the restructuring (75 FR 39739). As published, 40 CFR
98.2(a)(2) is technically correct, but reinserting the ``and'' makes it
clearer and less subject to misinterpretation, and makes the sentence
structure parallel to that of the original rule text. Therefore, we are
revising 40 CFR 98.2(a)(2) by restoring the word ``and'' to read as
follows (emphasis added):
A facility that contains any source category that is listed in
Table A-4 of this subpart and that emits 25,000 metric tons
CO2e or more per year in combined emissions from
stationary fuel combustion units, miscellaneous uses of carbonate,
and all applicable source categories that are listed in Table A-3
and Table A-4 of this subpart.
III. Economic Impacts of the Final Rule
This section of the preamble examines the costs and economic
impacts of the final rulemaking and the estimated economic impacts of
the rule on affected entities, including estimated impacts on small
entities. Complete detail on the economic impacts of the final rule can
be found in the text of the Economic Impact Analysis (EIA) for the
final rule (located in docket EPA-HQ-OAR-2009-0925).
A. How were compliance costs estimated?
1. Summary of Method Used To Estimate Compliance Costs
The cost analysis estimates the incremental contributions to total
reporting burden expected under 40 CFR part 98 and compliance costs
associated with reporting the data elements described above. EPA
estimated compliance costs based on the time reporters spend meeting
the requirements and the associated labor wage rates. EPA's estimated
costs of compliance are discussed in this section of the preamble and
in greater detail in Section 4 of the EIA.
Labor Costs. All of the reporting cost estimates include the time
of managers, lawyers, and technical staff in both the private sector
and the public sector. To reflect that both management and technical
staff will be involved in reporting the above data elements, an overall
blended wage rate was developed based on estimates from the TRI program
for similar data element reporting at similar facilities. Management
staff is estimated to be involved in approximately 0.8 percent of the
reporting, while technical staff is likely to be needed for the
remaining 99.2 percent. Thus, the blended wage rate used in this
analysis is $60.22 per hour. The amount of time required for facilities
with one owner is 80 minutes per facility in the first year and 40
minutes per facility in subsequent years; time estimated for facilities
with more than one owner is 125 minutes per facility in the first year
and 85 minutes per facility in subsequent years.
Cost basis. The cost analysis is based on facilities and suppliers
currently subject to 40 CFR part 98, including subparts that were
finalized after EPA proposed the rule to require reporting of corporate
parent information, NAICS codes and cogeneration.\18\ Specifically, the
finalization of 40 CFR part 98, subparts T (Magnesium Production), FF
(Underground Coal Mines), TT (Industrial Waste Landfills), and II
(Industrial Wastewater Treatment) resulted in a higher number of
facilities and suppliers subject to this final rule. The analysis does
not account for those expected to be added to 40 CFR part 98 through
upcoming actions. The methods and assumptions used to estimate the
compliance costs for facilities and suppliers currently subject to the
rule would likewise apply to those facilities and suppliers that may be
added to the 40 CFR part 98 reporting program in the future. The
addition of new facilities or suppliers would therefore increase the
total compliance costs in proportion to the increase of the reporting
universe. Accordingly, EPA does not expect the burden for newly added
industries to change the conclusions of this economic analysis.
---------------------------------------------------------------------------
\18\ See Mandatory Reporting of Greenhouse Gases from Magnesium
Production, Underground Coal Mines, Industrial Wastewater Treatment,
and Industrial Waste Landfills; Final Rule (75 FR 39736, July 12,
2010).
---------------------------------------------------------------------------
B. What are the costs of the rule?
1. Summary of Costs
As shown in Table 3 of this preamble, the total national cost under
this final rule is approximately $944,000 in the first year and about
$470,000 in subsequent years (all estimates are in $2006). Costs
include a public sector burden estimate of $90,000 in the first year
and $40,000 in subsequent years for program implementation and data
verification activities. See Table 3 in Section IV.A of this preamble
for a summary of the costs.
C. What are the economic impacts of the rule?
1. Summary of Economic Impacts
EPA prepared an economic analysis to evaluate the impacts of the
final rule. The analysis estimates the private direct compliance costs
per facility and provides a national burden estimate, which includes
public costs associated with program implementation and verification
activities. Reporting costs were estimated to be less than $100 per
facility. As a result, the rule is unlikely to result in significant
changes in firms' production decisions or economic choices.
[[Page 57683]]
D. What are the impacts of the rule on small businesses?
1. Summary of Impacts on Small Businesses
As required by the Regulatory Flexibility Act (RFA) and the Small
Business Regulatory Enforcement Fairness Act (SBREFA), EPA assessed the
potential impacts of the rule on small entities (small businesses,
governments, and non-profit organizations). (See Section IV.C of this
preamble for definitions of small entities.)
EPA conducted a screening assessment comparing compliance costs for
affected industry sectors to industry-specific receipts data for
establishments owned by small businesses. This ratio constitutes a
``sales'' test that computes the annualized compliance costs of this
rule as a percentage of sales and determines whether the ratio exceeds
some level (e.g., 1 percent or 3 percent).
The average ratio of annualized reporting program costs to revenues
of small entities would be less than 0.01 percent. As a result, EPA has
concluded that this action will not have a significant economic impact
on a substantial number of small entities.
IV. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
This action is not a ``significant regulatory action'' under the
terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and
is therefore not subject to review under the EO.
Although this is not a significant economic rule, EPA prepared an
analysis of the potential costs and benefits associated with the final
rule to provide insights on the potential effects. This analysis is
contained in the Economic Impact Analysis. A copy of the analysis is
available in the docket (EPA-HQ-OAR-2009-0925) for this action and is
briefly summarized here. In the economic analysis, EPA identified the
final rule's compliance burden and the costs. The cost analysis,
presented in Section III.B of this preamble, estimates the total
annualized burden, which is presented in Table 3 of this preamble.
Table 3--Cost Summary Under the Final Rulemaking (in Thousands, $2006)
------------------------------------------------------------------------
Cost Year 1 Subsequent years
------------------------------------------------------------------------
National compliance............. $854 $430
Public.......................... 90 40
---------------------------------------
Total....................... 944 470
------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
Overall, EPA has concluded that the costs of collecting U.S. parent
company(s), NAICS codes, and cogeneration information as part of 40 CFR
part 98 are outweighed by the potential benefits of more comprehensive
information about GHG emissions.
B. Paperwork Reduction Act
The information collection requirements for this final rule have
been submitted for approval to OMB under the Paperwork Reduction Act,
44 U.S.C. 3501 et seq. An ICR document was previously prepared for 40
CFR part 98 and was assigned EPA ICR number 2300.03. The information
collection requirements of this amendment to 40 CFR part 98 are
documented in an additional ICR document, which was assigned EPA ICR
number 2374.02.
The data collected through this final rule would be immediately
available to EPA and could be used for the purposes of providing
additional information to support more effective research and develop
actions to address GHG emissions. For example, corporate parent and
NAICS data would assist EPA in developing and improving emission
inventories, as well as characterizing emissions data in several
different ways. 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 strategies. For example, EPA could use the NAICS code
information gathered by this rule to compare results both within
industries and across industry sectors.
In addition, the information gathered through this rule will be
immediately available to enhance EPA's implementation of various
nonregulatory programs aimed at encouraging voluntary reductions of GHG
emissions. Under the authority of CAA section 103, EPA has launched a
variety of nonregulatory programs aimed at reducing emissions of GHGs.
The additional data will assist EPA by providing more detailed
information on possible sources, and facility operations within
industrial sectors for EPA to work with in the context of these
programs.
This information collection is mandatory and will be carried out
under CAA section 114. EPA published a proposed confidentiality
determination on July 7, 2010 (75 FR 39094) that specified which data
reporting elements in 40 CFR part 98 would be treated as CBI and which
data elements must be available to the public under CAA section 114. A
final determination will be issued before any part 98 data are
released.
As outlined in ICR number 2374.02, the projected average annual
cost and hour burden for non-Federal respondents is about $571,000 and
9,500 hours. The estimated average annual burden per response is 0.15
hour; the frequency of response is annual for all respondents that must
comply with the final rule; and the estimated average number of likely
respondents per year is 10,551. The cost burden to respondents
resulting from the collection of information includes the total capital
cost annualized over the equipment's expected useful life (averaging
$0), a total operation and maintenance component (averaging $0 per
year), and a labor cost component (averaging $571,000). Burden is
defined at 5 CFR 1320.3(b). These cost numbers differ from those shown
elsewhere in the EIA (EPA-HQ-OAR-2009-0925) because ICR costs represent
the average cost over the first three years of the rule, whereas the
EIA reports costs separately for the first and subsequent years of the
rule. Also, the total cost estimate of the rule in the EIA includes the
cost to the Agency to administer the program. The ICR differentiates
between respondent burden and cost to the Agency.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.
[[Page 57684]]
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment requirements under the Administrative Procedure Act
or any other statute, unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small organizations,
and small governmental jurisdictions.
For purposes of assessing the impacts of the final rule on small
entities, small entity is defined as: (1) A small business as defined
by the Small Business Administration's regulations at 13 CFR 121.201;
(2) a small governmental jurisdiction that is a government of a city,
county, town, school district or special district with a population of
less than 50,000; and (3) a small organization that is any not-for-
profit enterprise which is independently owned and operated and is not
dominant in its field.
After considering the economic impacts of the final rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. The
additional per-entity costs under the final rule are substantially
smaller (less than $81 in year 1 and $41 in subsequent years) than the
burden for the overall rule. The costs are therefore not enough to
constitute a significant economic impact on a substantial number of
small entities. The small entities directly regulated by the final rule
include small businesses across all sectors encompassed by the rule,
small governmental jurisdictions and small non-profits. We have
determined that some small businesses will be affected because their
production processes emit GHGs that must be reported, or because they
have stationary combustion units on site that emit GHGs that must be
reported. Small governments and small non-profits are generally
affected because they have regulated landfills or stationary combustion
units on site, or because they own a local distribution company subject
to 40 CFR part 98, subpart NN (natural gas suppliers).
At promulgation of 40 CFR part 98, EPA examined the impact on small
entities (74 FR 56369, October 30, 2009). In addition, EPA described
the steps taken by EPA to reduce the impact of 40 CFR part 98 on small
entities.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2
U.S.C. 1531-1538, requires Federal agencies, unless otherwise
prohibited by law, to assess the effects of their regulatory actions on
State, local, and Tribal governments and the private sector. Federal
agencies must also develop a plan to provide notice to small
governments that might be significantly or uniquely affected by any
regulatory requirements. The plan must enable officials of affected
small governments to have meaningful and timely input in the
development of EPA regulatory proposals with significant Federal
intergovernmental mandates and must inform, educate, and advise small
governments on compliance with the regulatory requirements.
The final rule does not contain a Federal mandate that may result
in expenditures of $100 million or more for State, local, and Tribal
governments, in the aggregate, or the private sector in any one year.
As shown in the EIA (EPA-HQ-OAR-2009-0925), EPA estimated the several
national cost estimates and found annual expenditures were below $100
million threshold. Thus, the final rule is not subject to the
requirements of UMRA sections 202 or 205.
The final rule is also not subject to the requirements of UMRA
section 203 because it contains no regulatory requirements that might
significantly or uniquely affect small governments. The final new rule
requires facilities and suppliers already subject to 40 CFR part 98 to
provide additional data in each annual GHG report, and the additional
data elements required are the same for all reporters (private and
public). In addition, EPA's small entity analysis shows the average
ratio of annualized reporting program costs to revenues would be less
than 0.01 percent.
This final rule amends 40 CFR part 98 and applies directly to
reporters that supply fuel or industrial gases that when used emit
GHGs, and to reporters that directly emit GHGs. The final rule does not
apply to governmental entities unless the government entity owns a
facility that directly emits GHGs above threshold levels such as a
landfill or large stationary combustion source. In addition, the final
rule does not impose any implementation responsibilities on State,
local, or Tribal governments and it is not expected to increase the
cost of existing regulatory programs managed by those governments.
Thus, the impacts on governments affected by the final rule are
expected to be minimal.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in EO 13132. However, for a more detailed discussion about
how 40 CFR part 98 relates to existing State programs, please see
Section II of the preamble to the final Part 98 (74 FR 56266, October
30, 2009).
This final rule applies directly to reporters that supply fuel or
chemicals that when used emit GHGs or facilities that directly emit
GHGs. It does not apply to governmental entities unless the government
entity owns a facility that directly emits GHGs above threshold levels
such as a landfill or large stationary combustion source, so relatively
few government facilities would be affected. This final rule also does
not limit the power of States or localities to collect GHG data and/or
regulate GHG emissions. Thus, EO 13132 does not apply to this action.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This final rule is not expected to have Tribal implications, as
specified in EO 13175 (65 FR 67249, November 9, 2000). The final rule
applies directly to entities that supply fuel or chemicals that when
used emit GHGs or facilities that directly emit GHGs. This final rule
does not pose significant costs on either a per-entity or national
basis; few, if any, facilities or suppliers that are expected to be
affected by the final rule are anticipated to be owned by Tribal
governments. This final rule also does not limit the power of Tribes to
collect GHG data and/or regulate GHG emissions. Thus, EO 13175 does not
apply to the final rule.
Although EO 13175 does not apply to this final rule, EPA sought
opportunities to provide information to Tribal governments and
representatives during development of the rule, as documented in the
preamble to the promulgated final Part 98 (74 FR 56371).
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying
only to those regulatory actions that concern health or safety risks,
such that the analysis required under section 5-501 of the EO has the
potential to influence the regulation. This action is not subject to EO
13045 because it does not establish an environmental standard intended
to mitigate health or safety risks.
[[Page 57685]]
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not subject to EO 13211 (66 FR 28355 (May 22,
2001)), because it is not a significant regulatory action under EO
12866.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113 (15 U.S.C. 272 note) directs
EPA to use voluntary consensus standards in its regulatory activities
unless to do so would be inconsistent with applicable law or otherwise
impractical. Voluntary consensus standards are technical standards
(e.g., materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary
consensus standards bodies. NTTAA directs EPA to provide Congress,
through OMB, explanations when the Agency decides not to use available
and applicable voluntary consensus standards.
This final rule does not involve technical standards. Therefore,
EPA is not considering the use of any voluntary consensus standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898 (59 FR 7629, February 16, 1994) establishes
Federal executive policy on environmental justice. Its main provision
directs Federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment. The final rule does not affect the level of protection
provided to human health or the environment because it addresses
information collection and reporting.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective November 22, 2010.
List of Subjects in 40 CFR Part 98
Environmental protection, Administrative practice and procedure,
Greenhouse gases, Suppliers, Reporting and recordkeeping requirements.
Dated: September 16, 2010.
Lisa P. Jackson,
Administrator.
0
For the reasons stated in the preamble, title 40, chapter I, of the
Code of Federal Regulations is amended as follows:
PART 98--[AMENDED]
0
1. The authority citation for part 98 continues to read as follows:
Authority: 42 U.S.C. 7401, et seq.
Subpart A--[Amended]
0
2. Section 98.2 is amended by revising paragraph (a)(2) to read as
follows:
Sec. 98.2 Who must report?
(a) * * *
(2) A facility that contains any source category that is listed in
Table A-4 of this subpart and that emits 25,000 metric tons
CO2e or more per year in combined emissions from stationary
fuel combustion units, miscellaneous uses of carbonate, and all
applicable source categories that are listed in Table A-3 and Table A-4
of this subpart. For these facilities, the annual GHG report must cover
stationary fuel combustion sources (subpart C of this part),
miscellaneous use of carbonates (subpart U of this part), and all
applicable source categories listed in Table A-3 and Table A-4 of this
subpart.
* * * * *
0
3. Section 98.3 is amended as follows:
0
a. By adding paragraph (c)(4)(v).
0
b. By adding paragraph (c)(10).
0
c. By adding paragraph (c)(11).
Sec. 98.3 What are the general monitoring, reporting, recordkeeping
and verification requirements of this part?
* * * * *
(c) * * *
(4) * * *
(v) Indicate (yes or no) whether reported emissions include
emissions from a cogeneration unit located at the facility.
* * * * *
(10) NAICS code(s) that apply to the reporting entity. (i) Primary
NAICS code. Report the NAICS code that most accurately describes the
reporting entity's primary product/activity/service. The primary
product/activity/service is the principal source of revenue for the
reporting entity. A reporting entity that has two distinct products/
activities/services providing comparable revenue may report a second
primary NAICS code.
(ii) Additional NAICS code(s). Report all additional NAICS codes
that describe all product(s)/activity(s)/service(s) at the reporting
entity that are not related to the principal source of revenue.
(11) Legal name(s) and physical address(es) of the highest-level
United States parent company(s) of the reporting entity and the
percentage of ownership interest for each listed parent company as of
December 31 of the year for which data are being reported according to
the following instructions:
(i) If the reporting entity is entirely owned by a single United
States company that is not owned by another company, provide that
company's legal name and physical address as the United States parent
company and report 100 percent ownership.
(ii) If the reporting entity is entirely owned by a single United
States company that is, itself, owned by another company (e.g., it is a
division or subsidiary of a higher-level company), provide the legal
name and physical address of the highest-level company in the ownership
hierarchy as the United States parent company and report 100 percent
ownership.
(iii) If the reporting entity is owned by more than one United
States company (e.g., company A owns 40 percent, company B owns 35
percent, and company C owns 25 percent), provide the legal names and
physical addresses of all the highest-level companies with an ownership
interest as the United States parent companies, and report the percent
ownership of each company.
(iv) If the reporting entity is owned by a joint venture or a
cooperative, the joint venture or cooperative is its own United States
parent company. Provide the legal name and physical address of the
joint venture or cooperative as the United States parent company, and
report 100 percent ownership by the joint venture or cooperative.
[[Page 57686]]
(v) If the reporting entity is entirely owned by a foreign company,
provide the legal name and physical address of the foreign company's
highest-level company based in the United States as the United States
parent company, and report 100 percent ownership.
(vi) If the reporting entity is partially owned by a foreign
company and partially owned by one or more U.S. companies, provide the
legal name and physical address of the foreign company's highest-level
company based in the United States, along with the legal names and
physical addresses of the other U.S. parent companies, and report the
percent ownership of each of these companies.
(vii) If the reporting entity is a federally owned facility, report
``U.S. Government'' and and do not report physical address or percent
ownership.
* * * * *
0
3. Section 98.6 is amended by adding definitions of ``Cogeneration
unit,'' ``North American Industry Classification System (NAICS)
code(s),'' ``Physical address,'' and ``United States parent
company(s)'' in alphabetical order to read as follows:
Sec. 98.6 Definitions.
* * * * *
Cogeneration unit means a unit that produces electrical energy and
useful thermal energy for industrial, commercial, or heating or cooling
purposes, through the sequential or simultaneous use of the original
fuel energy.
* * * * *
North American Industry Classification System (NAICS) code(s) means
the six-digit code(s) that represents the product(s)/activity(s)/
service(s) at a facility or supplier as listed in the Federal Register
and defined in ``North American Industrial Classification System Manual
2007,'' available from the U.S. Department of Commerce, National
Technical Information Service, Alexandria, VA 22312, phone (703) 605-
6000 or (800) 553-6847. http://www.census.gov/eos/www/naics/.
* * * * *
Physical address, with respect to a United States parent company as
defined in this section, means the street address, city, state and zip
code of that company's physical location.
* * * * *
United States parent company(s) means the highest-level United
States company(s) with an ownership interest in the reporting entity as
of December 31 of the year for which data are being reported.
* * * * *
[FR Doc. 2010-23674 Filed 9-17-10; 8:45 am]
BILLING CODE 6560-50-P