In a Notice of Proposed Rulemaking issued by the U.S. Environmental Protection Agency (“EPA”) on March 10, 2009, EPA has proposed a nationwide system for the reporting of greenhouse gas (“GHG”) emissions by large industrial sources. In doing so, the Agency has taken the initial step toward federal regulation of GHG emissions.

Intended to gather and organize GHG emission data from the industrial sector for the purpose of informing future climate change policy decisions (such as the design of a cap-and-trade system of regulation), the proposed rule would require annual reporting of direct (as opposed to indirect) emissions. In most cases, reporting would be required at the facility level, where the facility has direct emissions of 25,000 metric tons of carbon dioxide equivalent per year or more. Given this 25,000 metric ton threshold, the rule is tailored to exempt the “vast majority” of small businesses and most agricultural operations, while covering approximately 13,000 industrial facilities that account for 85-90% of U.S. GHG emissions. As proposed, the rule would not require reporting of indirect emissions or offsets.

The proposed rule is also tailored to target specific industries, including power plants, refineries, coal mines, auto and engine manufacturers, and other industrial operations including cement and metal production – in some cases regardless of the individual facility’s total annual emissions. Under the proposed rule, the first annual reports would be submitted to EPA in 2011, and would report GHG emissions from calendar year 2010.

The proposed rule was signed by EPA Administrator Lisa Jackson on Tuesday, and will be published in the Federal Register shortly. A 60-day comment period and two public hearings will follow. A pre-publication copy of the proposed rule is available on EPA’s web site, at