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Electronic Code of Federal Regulations

e-CFR data is current as of December 4, 2019

Title 10Chapter IISubchapter B → Part 300


Title 10: Energy


PART 300—VOLUNTARY GREENHOUSE GAS REPORTING PROGRAM: GENERAL GUIDELINES


Contents
§300.1   General.
§300.2   Definitions.
§300.3   Guidance for defining and naming the reporting entity.
§300.4   Selecting organizational boundaries.
§300.5   Submission of an entity statement.
§300.6   Emissions inventories.
§300.7   Net emission reductions.
§300.8   Calculating emission reductions.
§300.9   Reporting and recordkeeping requirements.
§300.10   Certification of reports.
§300.11   Independent verification.
§300.12   Acceptance of reports and registration of entity emission reductions.
§300.13   Incorporation by reference.

Authority: 42 U.S.C. 7101, et seq., and 42 U.S.C. 13385(b).

Source: 71 FR 20805, Apr. 21, 2006, unless otherwise noted.

§300.1   General.

(a) Purpose. The General Guidelines in this part and the Technical Guidelines incorporated by reference in §300.13 govern the Voluntary Reporting of Greenhouse Gases Program authorized by section 1605(b) of the Energy Policy Act of 1992 (42 U.S.C. 13385(b)). The purpose of the guidelines is to establish the procedures and requirements for filing voluntary reports, and to encourage corporations, government agencies, non-profit organizations, households and other private and public entities to submit annual reports of their greenhouse gas emissions, emission reductions, and sequestration activities that are complete, reliable and consistent. Over time, it is anticipated that these reports will provide a reliable record of the contributions reporting entities have made toward reducing their greenhouse gas emissions.

(b) Reporting under the program. (1) Each reporting entity, whether or not it intends to register emissions as described in paragraph (c) of this section, must:

(i) File an entity statement that meets the appropriate requirements in §300.5(d) through (f) of this part;

(ii) Use appropriate emission inventory and emission reduction calculation methods specified in the Technical Guidelines (incorporated by reference, see §300.13), and calculate and report the weighted average quality rating of any emission inventories it reports;

(iii) Comply with the record keeping requirements in §300.9 of this part; and

(iv) Comply with the certification requirements in §300.10 of this part;

(2) Each reporting entity, whether or not it intends to register emissions as described in paragraph (c) of this section, may report offset reductions achieved by other entities outside their boundaries as long as such reductions are reported separately and calculated in accordance with methods specified in the Technical Guidelines. The third-party entity that achieved these reductions must agree to their being reported as offset reductions, and must also meet all of the requirements of reporting that would apply if the third-party entity reported directly under the 1605(b) program.

(3) An entity that intends to register emissions and emission reductions must meet the additional requirements referenced in paragraph (c) of this section.

(4) An entity that does not intend to register emissions and emission reductions may choose to report its emissions and/or emission reductions on an entity-wide basis or for selected elements of the entity, selected gases or selected sources.

(5) An entity that does not intend to register emissions may report emission inventories for any year back to 1990 and may report emission reductions for any year back to 1991, relative to a base period of one to four years, ending no earlier than 1990.

(c) Registration requirements. Entities that seek to register reductions must meet the additional requirements in this paragraph; although these requirements differ depending on whether the entity is a large or small emitter.

(1) To be eligible for registration, a reduction must have been achieved after 2002, unless the entity has committed under the Climate Leaders or Climate VISION programs to reduce its entity-wide emissions relative to a base period that ends earlier 2002, but no earlier than 2000.

(2) A large emitter must submit an entity-wide emission inventory that meets or exceeds the minimum quality requirements specified in §300.6(b) and the Technical Guidelines (incorporated by reference, see §300.13). Registered reductions of a large emitter must be based on an entity-wide assessment of net emission reductions, determined in accordance with §300.8 and the Technical Guidelines.

(3) A small emitter must also submit an emission inventory that meets minimum quality requirements specified in §300.6(b) and the Technical Guidelines (incorporated by reference, see §300.13) and base its registered reductions on an assessment of annual changes in net emissions. A small emitter, however, may restrict its inventory and assessment to a single type of activity, such as forest management, building operations or agricultural tillage.

(4) Reporting entities may, under certain conditions, register reductions achieved by other entities:

(i) Reporting entities that have met the requirements for registering their own reductions may also register offset reductions achieved by other entities if:

(A) They have an agreement with the third-party entities to do so and these third-party entities have met all of the requirements for registration; or

(B) They were the result of qualified demand management or other programs and are calculated in accordance with the action-specific method identified in §300.8(h)(5).

(ii) Small emitters that serve as an aggregator may register offset reductions achieved by non-reporting entities without reporting on their own emissions, as long as they have an agreement with the third-party entities to do so and these third-party entities have met all of the requirements for registration.

(d) Forms. Annual reports of greenhouse gas emissions, emission reductions, and sequestration must be made on forms or software made available by the Energy Information Administration of the Department of Energy (EIA).

(e) Status of reports under previous guidelines. EIA continues to maintain in its Voluntary Reporting of Greenhouse Gases database all reports received pursuant to DOE's October 1994 guidelines. Those guidelines are available from EIA at http://www.eia.doe.gov/oiaf/1605/guidelns.html.

(f) Periodic review and updating of General and Technical Guidelines. DOE intends periodically to review the General Guidelines and the Technical Guidelines (incorporated by reference, see §300.13) to determine whether any changes are warranted; DOE anticipates these reviews will occur approximately once every three years. These reviews will consider any new developments in climate science or policy, the participation rates of large and small emitters in the 1605(b) program, the general quality of the data submitted by different participants, and any changes to other emissions reporting protocols. Possible changes may include, but are not limited to:

(1) The addition of greenhouse gases that have been demonstrated to have significant, quantifiable climate forcing effects when released to the atmosphere in significant quantities;

(2) Changes to the minimum, quantity-weighted quality rating for emission inventories;

(3) Updates to emission inventory methods, emission factors and other provisions that are contained in industry protocols or standards. The review may also consider updates to any government-developed and consensus-based emission factors for which automatic updating is not provided in the Technical Guidelines;

(4) Modifications to the benchmarks or emission conversion factors used to calculate avoided and indirect emissions; and

(5) Changes in the minimum requirements for registered emission reductions.

§300.2   Definitions.

This section provides definitions for commonly used terms in this part.

Activity of a small emitter means, with respect to a small emitter, any single category of anthropogenic production, consumption or other action that releases emissions or results in sequestration, the annual changes of which can be assessed generally by using a single calculation method.

Aggregator means an entity that reports to the 1605(b) program on behalf of non-reporting entities. An aggregator may be a large or small emitter, such as a trade association, non-profit organization or public agency.

Anthropogenic means greenhouse gas emissions and removals that are a direct result of human activities or are the result of natural processes that have been affected by human activities.

Avoided emissions means the greenhouse gas emission reductions that occur outside the organizational boundary of the reporting entity as a direct consequence of changes in the entity's activity, including but not necessarily limited to the emission reductions associated with increases in the generation and sale of electricity, steam, hot water or chilled water produced from energy sources that emit fewer greenhouse gases per unit than other competing sources of these forms of distributed energy.

Base period means a period of 1-4 years used to derive the average annual base emissions, emissions intensity or other values from which emission reductions are calculated.

Base value means the value from which emission reductions are calculated for an entity or subentity. The value may be annual emissions, emissions intensity, kilowatt-hours generated, or other value specified in the 1605(b) guidelines. It is usually derived from actual emissions and/or activity data derived from the base period.

Biogenic emissions mean emissions that are naturally occurring and are not significantly affected by human actions or activity.

Boundary means the actual or virtual line that encompasses all the emissions and carbon stocks that are to be quantified and reported in an entity's greenhouse gas inventory, including de minimis emissions. Entities may use financial control or another classification method based on ownership or control as the means of determining which sources or carbon stocks fall within this organizational boundary.

Carbon dioxide equivalent means the amount of carbon dioxide by weight emitted into the atmosphere that would produce the same estimated radiative forcing as a given weight of another radiatively active gas. Carbon dioxide equivalents are computed by multiplying the weight of the gas being measured by its estimated global warming potential.

Carbon stocks mean the quantity of carbon stored in biological and physical systems including: trees, products of harvested trees, agricultural crops, plants, wood and paper products and other terrestrial biosphere sinks, soils, oceans, and sedimentary and geological sinks.

Climate Leaders means the EPA sponsored industry-government partnership that works with individual companies to develop long-term comprehensive climate change strategies. Certain Climate Leaders Partners have, working with EPA, set a corporate-wide greenhouse gas reduction goal and have inventoried their emissions to measure progress towards their goal.

Climate VISION means the public-private partnership initiated pursuant to a Presidential directive issued in 2002 that aims to contribute to the President's goal of reducing greenhouse gas intensity through voluntary frameworks with industry. Climate VISION partners have signed an agreement with DOE to implement various climate-related actions to reduce greenhouse gas emissions.

De minimis emissions means emissions from one or more sources and of one or more greenhouse gases that, in aggregate, are less than or equal to 3 percent of the total annual carbon dioxide (CO2) equivalent emissions of a reporting entity.

Department or DOE means the U.S. Department of Energy.

Direct emissions are emissions from sources within the organizational boundaries of an entity.

Distributed energy means electrical or thermal energy generated by an entity that is sold or otherwise exported outside of the entity's boundaries for use by another entity.

EIA means the Energy Information Administration within the U.S. Department of Energy.

Emissions means the direct release of greenhouse gases to the atmosphere from any anthropogenic (human induced) source and certain indirect emissions (releases) specified in this part.

Emissions intensity means emissions per unit of output, where output is defined as the quantity of physical output, or a non-physical indicator of an entity's or subentity's productive activity.

Entity means the whole or part of any business, institution, organization, government agency or corporation, or household that:

(1) Is recognized under any U.S. Federal, State or local law that applies to it;

(2) Is located and operates, at least in part, in the United States; and

(3) The emissions of such operations are released, at least in part, in the United States.

First reduction year means the first year for which an entity intends to register emission reductions; it is the year that immediately follows the start year.

Fugitive emissions means uncontrolled releases to the atmosphere of greenhouse gases from the processing, transmission, and/or transportation of fossil fuels or other materials, such as HFC leaks from refrigeration, SF6 from electrical power distributors, and methane from solid waste landfills, among others, that are not emitted via an exhaust pipe(s) or stack(s).

Greenhouse gases means the gases that may be reported to the Department of Energy under this program. They are:

(1) Carbon dioxide (CO2)

(2) Methane (CH4)

(3) Nitrous oxide (N2O)

(4) HydrofluorocarbonsHFC-23 [trifluoromethane-(CHF3]HFC-32 [trifluoromethane-CH2F2], CH2CF3, CH3F, CHF2CF3, CH2FCF3, CH3FCF3, CHF2CH2F, CF3CH3, CH2FCH2F, CH3CHF2, CH3CH2F, CF3CHFCF3, CH2FCF3CF3, CHF2CHFCF3, CF3CH2CF3, CH2FCF2CHF2, CHF2CH2CF3, CF3CH2CF2CH3, CH3 CHFCHFCF2)

(5) Perfluorocarbons (perfluoromethane-CF4, perfluoroethane-C2F6, C3F8, C4F10, c-C4F8, C5F12, C6F14)

(6) Sulfur hexafluoride (SF6)

(7) Chlorofluorocarbons (CFC-11 [trichlorofluoromethane-CCl3F], CCl2F2, CClF3, CCl2FCClF2, CClF2CClF2, ClF3CClF2,)

(8) Other gases or particles that have been demonstrated to have significant, quantifiable climate forcing effects when released to the atmosphere in significant quantities and for which DOE has established or approved methods for estimating emissions and reductions. (Note: As provided in §300.6(i), chlorofluorcarbons and other gases with quantifiable climate forcing effects may be reported to the 1605(b) program if DOE has established an appropriate emission inventory or emission reduction calculation method, but reductions of these gases may not be registered.)

Incidental lands are entity landholdings that are a minor component of an entity's operations and are not actively managed for production of goods and services, including:

(1) Transmission, pipeline, or transportation right of ways that are not managed for timber production;

(2) Land surrounding commercial enterprises or facilities; and

(3) Land where carbon stock changes are determined by natural factors.

Indirect emissions means greenhouse gas emissions from stationary or mobile sources outside the organizational boundary that occur as a direct consequence of an entity's activity, including but not necessarily limited to the emissions associated with the generation of electricity, steam and hot/chilled water used by the entity.

Large emitter means an entity whose annual emissions are more than 10,000 metric tons of CO2 equivalent, as determined in accordance with §300.5(c).

Net emission reductions means the sum of all annual changes in emissions, eligible avoided emissions and sequestration of the greenhouse gases specifically identified in §300.6(i), and determined to be in conformance with §§300.7 and 300.8 of this part.

Offset means an emission reduction that is included in a 1605(b) report and meets the requirements of this part, but is achieved by an entity other than the reporting entity. Offset reductions must not be reported or registered by any other entity and must appear as a separate and distinct component of an entity's report. Offsets are not integrated into the reporting entity's emissions or net emission reductions.

Registration means the reporting of emission reductions that the EIA has determined meet the qualifications for registered emission reductions set forth in the guidelines.

Reporting entity means an entity that has submitted a report under the 1605(b) program that has been accepted by the Energy Information Administration.

Reporting year means the year that is the subject of a report to DOE.

Sequestration means the process by which CO2 is removed from the atmosphere, either through biologic processes or physical processes.

Simplified Emission Inventory Tool (SEIT) is a computer-based method, to be developed and made readily accessible by EIA, for translating common physical indicators into an estimate of greenhouse gas emissions.

Sink means an identifiable discrete location, set of locations, or area in which CO2 or some other greenhouse gas is sequestered.

Small emitter means an entity whose annual emissions are less than or equal to 10,000 metric tons of CO2 equivalent, as determined in accordance with §300.5(c), and that chooses to be treated as a small emitter under the guidelines.

Source means any land, facility, process, vehicle or activity that releases a greenhouse gas.

Start year means the year upon which the initial entity statement is based and the last year of the initial base period(s).

Subentity means a component of any entity, such as a discrete business line, facility, plant, vehicle fleet, or energy using system, which has associated with it emissions of greenhouse gases that can be distinguished from the emissions of all other components of the same entity and, when summed with the emissions of all other subentities, equal the entity's total emissions.

Total emissions means the total annual contribution of the greenhouse gases (as defined in this section) to the atmosphere by an entity, including both direct and indirect entity-wide emissions.

United States or U.S. means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, and any other territory of the United States.

§300.3   Guidance for defining and naming the reporting entity.

(a) A reporting entity must be composed of one or more businesses, public or private institutions or organizations, households, or other entities having operations that annually release emissions, at least in part, in the United States. Entities may be defined by, as appropriate, a certificate of incorporation, corporate charter, corporate filings, tax identification number, or other legal basis of identification recognized under any Federal, State or local law or regulation. If a reporting entity is composed of more than one entity, all of the entities included must be responsible to the same management hierarchy and all entities that have the same management hierarchy must be included in the reporting entity.

(b) All reporting entities are strongly encouraged to define themselves at the highest level of aggregation. To achieve this objective, DOE suggests the use of a corporate-level definition of the entity, based on filings with the Securities and Exchange Commission or institutional charters. While reporting at the highest level of aggregation is encouraged, DOE recognizes that certain businesses and institutions may conclude that reporting at some lower level is desirable. Federal agencies are encouraged to report at the agency or departmental level, but distinct organizational units (such as a Department of the Interior Fish and Wildlife Service National Wildlife Refuge) may report directly if authorized by their department or agency. Once an entity has determined the level of corporate or institutional management at which it will report (e.g., the holding company, subsidiary, regulated stationary source, state government, agency, refuge, etc.), the entity must include all elements of the organization encompassed by that management level and exclude any organizations that are managed separately. For example, if two subsidiaries of a parent company are to be covered by a single report, then all subsidiaries of that parent company must also be included. Similarly, if a company decides to report on the U.S. and Canadian subsidiaries of its North American operations unit, it must also report on any other subsidiaries of its North American unit, such as a Mexican subsidiary.

(c) A name for the defined entity must be specified by all reporters. For entities that intend to register reductions, this should be the name commonly used to represent the activities being reported, as long as it is not also used to refer to substantial activities not covered by the entity's reports. While DOE believes entities should be given considerable flexibility in defining themselves at an appropriate level of aggregation, it is essential that the name assigned to an entity that intends to register reductions corresponds closely to the scope of the operations and emissions covered by its report. If, for example, an individual plant or operating unit is reporting as an entity, it should be given a name that corresponds to the specific plant or unit, and not to the responsible subsidiary or corporate entity. In order to distinguish a parent company from its subsidiaries, the name of the parent company generally should not be incorporated into the name of the reporting subsidiary, but if it is, the name of the parent company usually should be secondary.

§300.4   Selecting organizational boundaries.

(a) Each reporting entity must disclose in its entity statement the approach used to establish its organizational boundaries, which should be consistent with the following guidelines:

(1) In general, entities should use financial control as the primary basis for determining their organizational boundaries, with financial control meaning the ability to direct the financial and operating policies of all elements of the entity with a view to gaining economic or other benefits from its activities over a period of many years. This approach should ensure that all sources, including those controlled by subsidiaries, that are wholly or largely owned by the entity are covered by its reports. Sources that are under long-term lease of the entity may, depending on the provisions of such leases, also be considered to be under the entity's financial control. Sources that are temporarily leased or operated by an entity generally would not be considered to be under its financial control.

(2) Entities may establish organizational boundaries using approaches other than financial control, such as equity share or operational control, but must disclose how the use of these other approaches results in organizational boundaries that differ from those resulting from using the financial control approach.

(3) Emissions from facilities or vehicles that are partially-owned or leased may be included at the entity's discretion, provided that the entity has taken reasonable steps to assure that doing so does not result in the double counting of emissions, sequestration or emission reductions. Emissions reductions or sequestration associated with land, facilities or other sources not owned or leased by an entity may not be included in the entity's reports under the program unless the entity has long-term control over the emissions or sequestration of the source and the owner of the source has agreed that the emissions or sequestration may be included in the entity's report.

(4) If the scope of a defined entity extends beyond the United States, the reporting entity should use the same approach to determining its organizational boundaries in the U.S. and outside the U.S.

(b) Each reporting entity must keep separate reports on emissions or emission reductions that occur within its defined boundaries and those that occur outside its defined boundaries. Entities must also keep separate reports on emissions and emission reductions that occur outside the United States and those that occur within the United States.

(c) An entity that intends to register its entity-wide emissions reductions must document and maintain its organizational boundary for accounting and reporting purposes.

§300.5   Submission of an entity statement.

(a) Determining the type of reporting entity. The entity statement requirements vary by type of reporting entity. For the purposes of these guidelines, there are three types of entities:

(1) Large emitters that intend to register emission reductions;

(2) Small emitters that intend to register emission reductions; and

(3) Emitters that intend to report, but not register emission reductions.

(b) Choosing a start year. The first entity statement describes the make-up, operations and boundaries of the entity, as they existed in the start year.

(1) For all entities, it is the year immediately preceding the first year for which the entity intends to register emission reductions and the last year of the initial base period(s).

(2) For entities intending to register emission reductions, the start year may be no earlier than 2002, unless the entity has made a commitment to reduce its entity-wide emissions under the Climate Leaders or Climate VISION program. An entity that has made such a commitment may establish a start year derived from the base period of the commitment, as long as it is no earlier than 2000.

(i) For a large emitter, the start year is the first year for which the entity submits a complete emissions inventory under the 1605(b) program.

(ii) The entity's emissions in its start year or its average annual emissions over a period of up to four years ending in the start year determine whether it qualifies to begin reporting as a small emitter.

(3) For entities not intending to register reductions, the start year may be no earlier than 1990.

(c) Determining and maintaining large or small emitter reporting status. (1) Any entity that intends to register emission reductions can choose to participate as a large emitter, but only an entity that has demonstrated that its annual emissions are less than or equal to 10,000 metric tons of CO2 equivalent may participate as a small emitter. To demonstrate that its annual emissions are less than or equal to 10,000 metric tons of CO2 equivalent, an entity must submit either an estimate of its emissions during its chosen start year or an estimate of its average annual emissions over a continuous period not to exceed four years of time ending in its chosen start year, as long as the operations and boundaries of the entity have not changed significantly during that period.

(2) An entity must estimate its total emissions using methods specified in Chapter 1 of the Technical Guidelines (incorporated by reference, see §300.13) or by using the Simplified Emission Inventory Tool (SEIT) provided by EIA and also discussed in Chapter 1. The results of this estimate must be reported to EIA. [Note: emission estimates developed using SEIT may not be used to prepare, in whole or part, entity-wide emission inventories required for the registration of reductions.]

(3) After starting to report, each small emitter must annually certify that the emissions-related operations and boundaries of the entity have not changed significantly since the previous report. A new estimate of total emissions must be submitted after any significant increase in emissions, any change in the operations or boundaries of the small emitter, or every five years, whichever occurs first. Small emitters with estimated annual emissions of over 9,000 metric tons of CO2 equivalent should re-estimate and submit their emissions annually. If an entity determines that it must report as a large emitter, then it must continue to report as a large emitter in all future years in order to ensure a consistent time series of reports. Once a small emitter becomes a large emitter, it must begin reporting in conformity with the reporting requirements for large emitters.

(d) Entity statements for large emitters intending to register reductions. When a large emitter intending to register emission reductions first reports under these guidelines, it must provide the following information in its entity statement:

(1) The name to be used to identify the participating entity;

(2) The legal basis of the named entity;

(3) The criteria used to determine:

(i) The organizational boundaries of the entity, if other than financial control; and

(ii) The sources of emissions included or excluded from the entity's reports, such as sources excluded as de minimis emissions;

(4) The names of any parent or holding companies the activities of which will not be covered comprehensively by the entity's reports;

(5) The names of any large subsidiaries or organizational units covered comprehensively by the entity's reports. All subsidiaries of the entity must be covered by the entity's reports, but only large subsidiaries must be specifically identified in the entity statement;

(6) A list of each country where operations occur, if the entity is including any non-U.S. operations in its report;

(7) A description of the entity and its primary U.S. economic activities, such as electricity generation, product manufacturing, service provider or freight transport; for each country listed under paragraph (d)(6) of this section, the large emitter should describe the economic activity in that country.

(8) A description of the types of emission sources or sinks to be covered in the entity's emission inventories, such as fossil fuel power plants, manufacturing facilities, commercial office buildings or heavy-duty vehicles;

(9) The names of other entities that substantially share the ownership or operational control of sources that represent a significant part of the reporting entity's emission inventories, and a certification that, to the best of the certifier's knowledge, the direct greenhouse gas emissions and sequestration in the entity's report are not included in reports filed by any of these other entities to the 1605(b) program; and

(10) Identification of the start year.

(e) Entity statements for small emitters intending to register reductions. When a small emitter intending to register emission reductions first reports under these guidelines, it must provide the following information in its entity statement:

(1) The name to be used to identify the participating entity;

(2) The legal basis of the named entity;

(3) An identification of the entity's control over the activities covered by the entity's reports, if other than financial control;

(4) The names of any parent or holding companies the activities of which will not be covered comprehensively by the entity's reports;

(5) An identification or description of the primary economic activities of the entity, such as agricultural production, forest management or household operation; if any of the economic activities covered by the entity's reports occur outside the U.S., a listing of each country in which such activities occur;

(6) An identification or description of the specific activity (or activities) and the emissions, avoided emissions or sequestration covered by the entity's report, such as landfill gas recovery or forest sequestration;

(7) A certification that, to the best of the certifier's knowledge, the direct greenhouse gas emissions and sequestration in the entity's report are not included in reports filed by any other entities reporting to the 1605(b) program; and

(8) Identification of the start year.

(f) Entity statements for reporting entities not registering reductions. When a participant not intending to register emission reductions first reports under this part, it must, at a minimum, provide the following information in its entity statement:

(1) The name to be used to identify the reporting entity;

(2) The legal basis of the entity;

(3) An identification of the entity's control over the activities covered by the entity's reports, if other than financial control;

(4) A description of the entity and its primary economic activities, such as electricity generation, product manufacturing, service provider, freight transport, agricultural production, forest management or household operation; if any of the economic activities covered by the entity's reports occur outside the United States, a listing of each country in which such activities occur; and

(5) A description of the types of emission sources or sinks, such as fossil fuel power plants, manufacturing facilities, commercial office buildings or heavy-duty vehicles, covered in the entity's reports of emissions or emission reductions.

(g) Changing entity statements. (1) Reporting entities are required to annually review and, if necessary, update their entity statements.

(2) From time to time, a reporting entity may choose to change the scope of activities included within the entity's reports or the level at which the entity wishes to report. A reporting entity may also choose to change its organizational boundaries, its base period, or other elements of its entity statement. For example, companies buy and sell business units, or equity share arrangements may change. In general, DOE encourages changes in the scope of reporting that expand the coverage of an entity's report and discourages changes that reduce the coverage of such reports unless they are caused by divestitures or plant closures. Any such changes should be reported in amendments to the entity statement, and major changes may warrant or require changes in the base values used to calculate emission reductions and, in some cases, the entity's base periods. Changes in the scope of reporting made on or before May 31 of a given calendar year must be reflected in the report submitted covering emissions and reductions for the following calendar year. Reporting entities may choose to postpone incorporating changes in the scope of reporting made after May 31 until submitting the report covering emissions and reductions for the year after the following calendar year. However, in no case should there be an interruption in the annual reports of entities registering emission reductions. Chapter 2 of the Technical Guidelines (incorporated by reference, see §300.13) provides more specific guidance on how such changes should be reflected in entity statements, reports, and emission reduction calculations.

(h) Documenting changes in amended entity statements. A reporting entity's entity statement in subsequent reports should focus primarily on changes since the previous report. Specifically, the subsequent entity statement should report the following information:

(1) For significant changes in the reporting entity's scope or organizational boundaries, the entity should document:

(i) The acquisition or divestiture of discrete business units, subsidiaries, facilities, and plants;

(ii) The closure or opening of significant facilities;

(iii) The transfer of economic activity to or from specific subentities covered by the entity's reports, such as the transfer of operations to non-U.S. subsidiaries;

(iv) Significant changes in land holdings (applies to entities reporting on greenhouse gas emissions or sequestration related to land use, land use change, or forestry);

(v) Whether the reporting entity is reporting at a higher level of aggregation than it did in the previous report, and if so, a listing of the subsidiary entities that are now aggregated under a revised conglomerated entity, including a listing of any non-U.S. operations to be added and the specific countries in which these operations are located; and

(vi) Changes in its activities or operations (e.g., changes in output, contractual arrangements, equipment and processes, outsourcing or insourcing of significant activities) that are likely to have a significant effect on emissions, together with an explanation of how it believes the changes in economic activity influenced its reported emissions or sequestrations.

§300.6   Emissions inventories.

(a) General. The objective of an emission inventory is to provide a full accounting of an entity's emissions for a particular year, including direct emissions of the first six categories of gases listed in the definition of “greenhouse gases” in §300.2, indirect emissions specified in paragraph (e) of this section, and all sequestration or other changes in carbon stocks. An emission inventory must be prepared in accordance with Chapter 1 of the Technical Guidelines (incorporated by reference, see §300.13). An inventory does not include avoided emissions or any offset reductions, and is not subsequently adjusted to reflect future acquisitions, divestitures or other changes to the reporting entity (although a reporting entity often makes these types of adjustments when calculating emission reductions under the guidelines). Entity-wide inventories are a prerequisite for the registration of emission reductions by entities with average annual emissions of more than 10,000 metric tons of CO2 equivalent. Entities that have average annual emissions of less than or equal to 10,000 metric tons of CO2 equivalent are eligible to register emission reductions associated with specific activities without also reporting an inventory of the total emissions, but such entities should inventory and report the emissions associated with the specific activity(ies) they do cover in their reports.

(b) Quality requirements for emission inventories. The Technical Guidelines (incorporated by reference, see §300.13) usually identify more than one acceptable method of measuring or estimating greenhouse gas emissions. Each acceptable method is rated A, B, C or D, with A methods usually corresponding to the highest quality method available and D methods representing the lowest quality method that may be used. Each letter is assigned a numerical rating reflecting its relative quality, 4 for A methods, 3 for B methods, 2 for C methods and 1 for D methods. Entities that intend to register emission reductions must use emission inventory methods that result in a quantity-weighted average quality rating of at least 3.0.

(1) Entities may at any time choose to modify the measurement or estimation methods that they use for their current or future year emission inventories. Such modifications would enable entities to gradually improve the quality of the ratings over time, but prior year inventories may be modified only to correct significant errors.

(2) Entities that have had their emission quantities and the quantity-weighted quality rating of their emissions inventory independently verified may report their emissions and average quality ratings by greenhouse gas, indirect emissions and sequestration, rather than by source or sink category.

(3) Entities that certify that they have used only A or B methods, may forego indicating in their reports the quality ratings of the methods used and may forego calculating the quantity-weighted average quality of their emission inventories.

(c) Using estimation methods not included in the Technical Guidelines. An entity may obtain DOE approval for the use of an estimation method not included in the Technical Guidelines (incorporated by reference, see §300.13) if the method covers sources not described in the Technical Guidelines, or if the method provides more accurate results for the entity's specific circumstances than the methods described in the Technical Guidelines. If an entity wishes to propose the use of a method that is not described in the Technical Guidelines, the entity must provide a written description of the method, an explanation of how the method is implemented (including data requirements), empirical evidence of the method's validity and accuracy, and a suggested rating for the method to DOE's Office of Policy and International Affairs (with a copy to EIA). DOE reserves the right to deny the request, or to assign its own rating to the method. By submitting this information, the entity grants permission to DOE to incorporate the method in a future revision of the Technical Guidelines.

(d) Direct emissions inventories. Direct greenhouse gas emissions that must be reported are the emissions resulting from stationary or mobile sources within the organizational boundaries of an entity, including but not limited to emissions resulting from combustion of fossil fuels, process emissions, and fugitive emissions. Process emissions (e.g., PFC emissions from aluminum production) must be reported along with fugitive emissions (e.g., leakage of greenhouse gases from equipment).

(e) Inventories of indirect emissions associated with purchased energy. (1) To provide a clear incentive for the users of electricity and other forms of purchased energy to reduce demand, an entity must include the indirect emissions from the consumption of purchased electricity, steam, and hot or chilled water in the entity's inventory as indirect emissions. To avoid double counting among entities, the entity must report all indirect emissions separately from its direct emissions. Entities should use the methods for quantifying indirect emissions specified in the Technical Guidelines (incorporated by reference, see §300.13).

(2) Entities may choose to report other forms of indirect emissions, such as emissions associated with employee commuting, materials consumed or products produced, although such other indirect emissions may not be included in the entity's emission inventory and may not be the basis for registered emission reductions. All such reports of other forms of indirect emissions must be distinct from reports of indirect emissions associated with purchased energy and must be based on emission measurement or estimation methods identified in the Technical Guidelines (incorporated by reference, see §300.13) or approved by DOE.

(f) Entity-level inventories of changes in terrestrial carbon stocks. Annual changes in managed terrestrial carbon stocks should be comprehensively assessed and reported across the entity, and the net emissions resulting from such changes included in the entity's emissions inventory. Entities should use the methods for estimating changes in managed terrestrial carbon stocks specified in the Technical Guidelines (incorporated by reference, see §300.13).

(g) Treatment of de minimis emissions and sequestration. (1) Although the goal of the entity-wide reporting requirement is to provide an accurate and comprehensive estimate of total emissions, there may be small emissions from certain sources that are unduly costly or otherwise difficult to measure or reliably estimate annually. An entity may exclude particular sources of emissions or sequestration if the total quantities excluded represent less than or equal to 3 percent of the total annual CO2 equivalent emissions of the entity. The entity must identify the types of emissions excluded and provide an estimate of the annual quantity of such emissions using methods specified in the Technical Guidelines (incorporated by reference, see §300.13) or by using the Simplified Emissions Inventory Tool (SEIT). The results of this estimate of the entity's total excluded annual emissions must be reported to DOE together with the entity's initial entity statement.

(2) After starting to report, each reporting entity that excludes from its annual reports any de minimis emissions must re-estimate the quantity of excluded emissions after any significant increase in such emissions, or every five years, whichever occurs sooner.

(h) Separate reporting of domestic and international emissions. Non-U.S. emissions included in an entity's emission inventory must be separately reported and clearly distinguished from emissions originating in the U.S. Entities must identify any country-specific factors used in the preparation of such reports.

(i) Covered gases. Entity-wide emissions inventories must include the emissions of the first six categories of named gases listed in the definition of “greenhouse gases” in §300.2. Entities may report chlorofluorocarbons and other greenhouse gases with quantifiable climate forcing effects as long as DOE has established a method for doing so, but such gases must be reported separately and emission reductions, if any, associated with such other gases are not eligible for registration.

(j) Units for reporting. Emissions and sequestration should be reported in terms of the mass (not volume) of each gas, using metric units (e.g., metric tons of methane). Entity-wide and subentity summations of emissions and reductions from multiple sources must be converted into CO2 equivalent units using the global warming potentials for each gas in the International Panel on Climate Change's Third Assessment (or most recent) Report, as specified in the Technical Guidelines (incorporated by reference, see §300.13). Entities should specify the units used (e.g., kilograms, or metric tons). Entities may need to use the standard conversion factors specified in the Technical Guidelines to convert existing data into the common units required in the entity-level report. Emissions from the consumption of purchased electricity must be calculated by region (from the list provided by DOE in the Technical Guidelines) or country, if outside the United States. Consumption of purchased steam or chilled/hot water must be reported according to the type of system and fuel used to generate it (from the list provided by DOE in the Technical Guidelines). Entities must convert purchased energy to CO2 equivalents using the conversion factors in the Technical Guidelines. Entities should also provide the physical quantities of each type of purchased energy covered by their reports.

§300.7   Net emission reductions.

(a) Entities that intend to register emission reductions achieved must comply with the requirements of this section. Entities may voluntarily follow these procedures if they want to demonstrate the achievement of net, entity-wide reductions for years prior to the earliest year permitted for registration. Only large emitters must follow the requirements of paragraph (b) of this section, but small emitters may do so voluntarily. Only entities that qualify as small emitters may use the special procedures in paragraph (c) of this section. Entities seeking to register emission reductions achieved by other entities (offsets) must certify that these emission reductions were calculated in a manner consistent with the requirements of paragraph (d) of this section and use the emission reduction calculation methods identified in §300.8. All entities seeking to register emission reductions must comply with the requirements of paragraph (e) of this section. Only reductions in the emissions of the first six categories of gases listed in the definition of “greenhouse gases” in §300.2 are eligible for registration.

(b) Assessing net emission reductions for large emitters. (1) Entity-wide reporting is a prerequisite for registering emission reductions by entities with average annual emissions of more than 10,000 metric tons of CO2 equivalent. Net annual entity-wide emission reductions must be based, to the maximum extent practicable, on a full assessment and sum total of all changes in an entity's emissions, eligible avoided emissions and sequestration relative to the entity's established base period(s). This assessment must include all entity emissions, including the emissions associated with any non-U.S. operations covered by the entity statement, although the reductions achieved by non-U.S. operations must be separately totaled prior to being integrated with the net emission reductions achieved by U.S. operations. It must include the annual changes in the total emissions of the entity, including the total emissions of each of the subentities identified in its entity statement. All changes in emissions, avoided emissions, and sequestration must be determined using methods that are consistent with the guidelines described in §300.8 of this part.

(2) If it is not practicable to assess the changes in net emissions resulting from certain entity activities using at least one of the methods described in §300.8 of this part, the entity may exclude them from its estimate of net emission reductions. The entity must identify as one or more distinct subentities the sources of emissions excluded for this reason and describe the reasons why it was not practicable to assess the changes that had occurred. DOE believes that few emission sources will be excluded for this reason, but has identified at least two situations where such an exclusion would be warranted. For example, it is likely to be impossible to assess the emission changes associated with a new manufacturing plant that produces a product for which the entity has no historical record of emissions or emissions intensity (emissions per unit of product output). However, once the new plant has been operational for at least a full year, a base period and base value(s) for the new plant could be established and its emission changes assessed in the following year. Until the emission changes of this new subentity can be assessed, it should be identified in the entity's report as a subentity for which no assessment of emission changes is practicable. The other example involves a subentity that has reduced its output below the levels of its base period. In such a case, the subentity could not use the absolute emissions method and may also be unable to identify an effective intensity metric or other method.

(3) In calculating its net annual emission reductions, an entity should exclude any emissions or sequestration that have been excluded from the entity's inventory. The entity should also exclude all de minimis and biogenic emissions that are excluded from the entity's inventory of greenhouse gas emissions from its assessments of emission changes.

(c) Assessing emission reductions for entities with small emissions. (1) Entities with average annual emissions of less than or equal to 10,000 metric tons of CO2 equivalent are not required to inventory their total emissions or assess all changes in their emissions, eligible avoided emissions and sequestration to qualify for registered reductions. These entities may register emission reductions that have occurred since 2002 and that are associated with one or more specific activities, as long as they:

(i) Perform a complete assessment of the annual emissions and sequestration associated with each of the activities upon which they report, using methods that meet the same quality requirements applicable to entity-wide emission inventories; and

(ii) Determine the changes in the emissions, eligible avoided emissions or sequestration associated with each of these activities.

(2) An entity reporting as a small emitter must report on one or more specific activities and is encouraged, but not required to report on all activities occurring within the entity boundary. Examples of small emitter activities include: vehicle operations; product manufacturing processes; building operations or a distinct part thereof, such as lighting; livestock operations; crop management; and power generation. For example, a farmer managing several woodlots and also producing a wheat crop may report emission reductions associated with managing an individual woodlot. However, the farmer must also assess and report the net sequestration resulting from managing all the woodlots within the entity's boundary. The small emitter is not required to report on emissions or reductions associated with growing the wheat crop.

(3) A small emitter must certify that the reductions reported were not caused by actions likely to cause increases in emissions elsewhere within the entity's operations. This certification should be based on an assessment of the likely direct and indirect effects of the actions taken to reduce greenhouse gas emissions.

(d) Net emission reductions achieved by other entities (offset reductions or emission reductions submitted by aggregators). A reporting entity or aggregator under certain conditions may report or register all or some of the net emission reductions achieved by entities that choose not to report under the section 1605(b) program. In all cases, an agreement must exist between the reporting entity or aggregator and the other entity that specifies the quantity of the emission reductions (or increases) achieved by the other entity that may be reported or registered as an offset reduction by the reporting entity or aggregator. A large emitter that is reporting on behalf of other entities must meet all of the requirements applicable to large emitters, including submission of an entity statement, an emissions inventory, and an entity-wide assessment of emission reductions. If an aggregator is a small emitter, it may choose to report only on the activities, emissions and emission reductions of the entities on behalf of which it is reporting and not to report on any of its own activities or emission reductions. The reporting entity or aggregator must include in its report all of the information on the other entity, including an entity statement, an emissions inventory (when required), and an assessment of emission reductions that would be required if the other entity were directly reporting to EIA. The net emissions reductions (or increases) of each other entity will be evaluated separately by EIA to determine whether they are eligible for registration in accordance with the guidelines of this part. Those registered reductions (or increases) assigned by the other entity, by agreement, to a reporting entity or aggregator will be included in EIA's summary of all registered offset reductions for that entity or aggregator. If the agreement between the reporting entity and other entity is discontinued, for any reason, the reporting entity must inform EIA and must identify any emission reductions previously reported that could be attributable to an increase in the carbon stocks of the other entity. Such reductions will be removed by EIA from the records of the reporting entity's offset reductions.

(e) Net emission reductions to be reported by other entities as offset reductions. Entities must identify in their report the quantity of any net emission reductions covered by the report, if any, that another entity will report as an offset reduction, including the name of the other entity;

(f) Adjusting for year-to-year increases in net emissions. (1) Normally, net annual emission reductions for an entity are calculated by summing the net annual changes in emissions, eligible avoided emissions and sequestration, as determined using the calculation methods identified in §300.8 and according to the procedures described in paragraph (b) of this section for large emitters, paragraph (c) for small emitters of this section for small emitters, and paragraph (d) of this section for offsets. However, if the entity experienced a net increase in emissions for one or more years, these increases must be reported and taken into account in calculating any future year reductions. If the entity subsequently achieves net annual emission reductions, the net increases experienced in the preceding year(s) must be more than offset by these reductions before the entity can once again register emission reductions. For example, if an entity achieved a net emission reduction of 5,000 metric tons of CO2 equivalent in its first year, a net increase of 2,000 metric tons in its second year, and a net reduction of 3,000 metric tons in its third year, it would be able to register a 5,000 metric ton reduction in its first year, no reduction in its second year, and a 1,000 metric ton reduction in its third year (3,000-2,000). The entity must file full reports for each of these three years. Its report for the second year would indicate the net increase in emissions and this increase would be noted in EIA's summary of the entity's report for that year and for any future year, until the emissions increase was entirely offset by subsequent emission reductions. If this same entity achieved a net reduction of only 1,000 metric tons in its third year, it would not be able to register additional reductions until it had, in some future year, offset more than its second year increase of 2,000 metric tons.

(2) [Reserved]

§300.8   Calculating emission reductions.

(a) Choosing appropriate emission reduction calculation methods. (1) An entity must choose the method or methods it will use to calculate emission reductions from the list provided in paragraph (h) of this section. Each of the calculation methods has special characteristics that make it applicable to only certain types of emissions and activities. An entity should select the appropriate calculation method based on several factors, including:

(i) How the entity's subentities are defined;

(ii) How the reporter will gather and report emissions data; and

(iii) The availability of other types of data that might be needed, such as production or output data.

(2) For some entities, a single calculation method will be sufficient, but many entities may need to apply more than one method because discrete components of the entity require different calculation methods. In such a case, the entity will need to select a method for each subentity (or discrete component of the entity with identifiable emission or reductions). The emissions and output measure (generally a physical measure) of each subentity must be clearly distinguished and reported separately. Guidance on the selection and specification of calculation methods is provided in Chapter 2 of the Technical Guidelines (incorporated by reference, see §300.13).

(b) Identifying subentities for calculating reductions. If more than one calculation method is to be used, an entity must specify the portion of the entity (the subentity) to which each method will be applied. Each subentity must be clearly identified. From time to time, it may be necessary to modify existing or create new subentities. The entity must provide to EIA a full description of such changes, together with an explanation of why they were required.

(c) Choosing a base period for calculating reductions. In general, the base period used in calculating emission reductions is the single year or up to four-year period average immediately preceding the first year of calculated emission reductions.

(d) Establishing base values. To calculate emission reductions, an entity must establish a base value against which to compare reporting year performance. The minimum requirements for base values for each type of calculation method are specified in Chapter 2 of the Technical Guidelines (incorporated by reference, see §300.13). In most cases, an historic base value, derived from emissions or other data gathered during the base period, is the minimum requirement specified. Entities may, however, choose to establish base values that are more stringent than the base values derived from the methods specified in Chapter 2 of the Technical Guidelines as long as their report indicates the rationale for the alternative base value and demonstrates that it would result in a smaller quantity of emission reductions.

(e) Emission reduction and subentity statements. For each subentity, an entity must submit to EIA the following information:

(1) An identification and description of the method used to calculate emission reductions, including:

(i) The type of calculation method;

(ii) The measure of output used (if any); and

(iii) The method-specific base period for which any required base value will be calculated.

(2) The base period used in calculating reductions. When an entity starts to report, the base period used in calculating reductions must end in the start year. However, over time the reporting entity may find it necessary to revise or establish new base periods and base values in response to significant changes in processes or output of the subentity.

(3) A description of the subentity and its primary economic activity or activities, such as electricity generation, product manufacturing, service provider, freight transport, or household operation; and

(4) A description of the emission sources or sinks covered, such as fossil fuel power plants, manufacturing facilities, commercial office buildings or heavy-duty vehicles.

(f) Changes in calculation methods, base periods and base values. When significant changes occur in the composition or output of reporting entities, a reporting entity may need to change previously specified calculation methods, base periods or base values. A reporting entity should make such changes only if necessary and it should fully document the reasons for any changes. The Technical Guidelines (incorporated by reference, see §300.13) describe when such changes should be made and what information on such changes must be provided to DOE. In general, such changes should not result in any alterations to previously reported or registered emission reductions. A reporting entity may alter previously reported or registered emission reductions only if necessary to correct significant errors.

(g) Continuous reporting. To ensure that the summation of entity annual reports accurately represents net, multi-year emission reductions, an entity must submit a report every year, beginning with the first reduction year. An entity may use a specific base period to determine emission reductions in a given future year only if the entity has submitted qualified reports for each intervening year. If an interruption occurs in the annual reports of an entity, the entity must subsequently report on all missing years prior to qualifying for the registration of additional emission reductions.

(h) Calculation methods. An entity must calculate any change in emissions, avoided emissions or sequestration using one or more of the methods described in this paragraph and in the Technical Guidelines (incorporated by reference, see §300.13).

(1) Changes in emissions intensity. An entity may use emissions intensity as a basis for determining emission reductions as long as the entity selects a measure of output that is:

(i) A reasonable indicator of the output produced by the entity;

(ii) A reliable indicator of changes in the entity's activities;

(iii) Related to emissions levels; and

(iv) Any appropriate adjustments for acquisitions, divestitures, insourcing, outsourcing, or changes in products have been made, as described in the Technical Guidelines (incorporated by reference, see §300.13).

(2) Changes in absolute emissions. An entity may use changes in the absolute (actual) emissions (direct and/or indirect) as a basis for determining net emission reductions as long as the entity makes only those adjustments required by the Technical Guidelines (incorporated by reference, see §300.13). An entity intending to register emission reductions may use this method only if the entity demonstrates in its report that any reductions derived from such changes were not achieved as a result of reductions in the output of the entity, and certifies that emission reductions are not the result of major shifts in the types of products or services produced. Entities may report, but not register, such reductions even if the output associated with such emissions is declining.

(3) Changes in carbon storage (for actions within entity boundaries). An entity may use changes in carbon storage as a basis for determining net emission reductions as long as the entity uses estimation and measurement methods that comply with the Technical Guidelines (incorporated by reference, see §300.13), and has included an assessment of the net changes in all sinks in its inventory.

(4) Changes in avoided emissions (for actions within entity boundaries). An entity may use changes in avoided emissions to determine its emission reductions. Avoided emissions eligible to be included in the calculation of net emission reductions that qualify for registration include those associated with the sale of electricity, steam, hot water or chilled water generated from non-emitting or low-emitting sources as a basis for determining net emission reductions as long as:

(i) The measurement and calculation methods used comply with the Technical Guidelines (incorporated by reference, see §300.13);

(ii) The entity certifies that any increased sales were not attributable to the acquisition of a generating facility that had been previously operated, unless the entity's base period includes generation values from the acquired facility's operation prior to its acquisition; and

(iii) Generators of distributed energy that have net emissions in their base period and intend to report reductions resulting from changes in eligible avoided emissions, use a method specified in the Technical Guidelines (incorporated by reference, see §300.13) that integrates the calculation of reductions resulting from both changes in emissions intensity and changes in avoided emissions.

(5) Action-specific emission reductions (for actions within entity boundaries). A number of source- or situation-specific methods are provided in the Technical Guidelines and these methods must be used to assess the annual changes in emissions for the specific sources or situation addressed by these methods. In addition, a generic action-specific method is identified in the Technical Guidelines. An entity intending to register reductions may use the generic action-specific approach only if it is not possible to measure accurately emission changes by using one of the methods identified in paragraphs (h)(1) through (h)(4) of this section. Entities that intend to register reductions and that use the generic action-specific approach must explain why it is not possible to use any of these other methods. An entity not intending to register reductions may use the generic action-specific method to determine emission reductions, as long as the entity demonstrates that the estimate is based on analysis that:

(i) Uses output, utilization and other factors that are consistent, to the maximum extent practicable, with the action's actual performance in the year for which reductions are being reported;

(ii) Excludes any emission reductions that might have resulted from reduced output or were caused by actions likely to be associated with increases in emissions elsewhere within the entity's operations; and

(iii) Uses methods that are in compliance with the Technical Guidelines (incorporated by reference, see §300.13).

(i) Summary description of actions taken to reduce emissions. Each reported emission reduction must be accompanied by an identification of the types of actions that were the likely cause of the reductions achieved. Entities are also encouraged to include in their reports information on the benefits and costs of the actions taken to reduce greenhouse gas emissions, such as the expected rates of return, life cycle costs or benefit to cost ratios, using appropriate discount rates.

(j) Emission reductions associated with plant closings, voluntary actions and government (including non-U.S. regulatory regimes) requirements. (1) Each report of emission reductions must indicate whether the reported emission reductions were the result, in whole or in part, of plant closings, voluntary actions, or government requirements. EIA will presume that reductions that were not the result of plant closings or government requirements are the result of voluntary actions.

(2) If emission reductions were, in whole or in part, the direct result of plant closings that caused a decline in output, the report must identify the reductions as such; these reductions do not qualify for registration. EIA will presume that reductions calculated using the emissions intensity method do not result from a decline in output.

(3) If the reductions were associated, in whole or part, with U.S. or non-U.S. government requirements, the report should identify the government requirement involved and the effect these requirements had on the reported emission reductions. If, as a result of the reduction, a non-U.S. government issued to the reporting entity a credit or other financial benefit or regulatory relief, the report should identify the government requirement involved and describe the specific form of benefit or relief provided.

(k) Determining the entity responsible for emission reductions. The entity that EIA will presume to be responsible for emission reduction, avoided emission or sequestered carbon is the entity with financial control of the facility, land or vehicle which generated the reported emissions, generated the energy that was sold so as to avoid other emissions, or was the place where the sequestration action occurred. If control is shared, reporting of the associated emission reductions should be determined by agreement between the entities involved so as to avoid double-counting; this agreement must be reflected in the entity statement and in any report of emission reductions. EIA will presume that an entity is not responsible for any emission reductions associated with a facility, property or vehicle excluded from its entity statement.

§300.9   Reporting and recordkeeping requirements.

(a) Starting to report under the guidelines. An entity may report emissions and sequestration on an annual basis beginning in any year, but no earlier than the base period of 1987-1990 specified in the Energy Policy Act of 1992. To be recognized under these guidelines, all reports must conform to the measurement methods established by the Technical Guidelines (incorporated by reference, see §300.13).

(b) Revisions to reports submitted under the guidelines. (1) Once EIA has accepted a report under this part, it may be revised by the reporting entity only under the circumstances specified in this paragraph and related provisions of the Technical Guidelines (incorporated by reference, see §300.13). In general:

(i) Revised reports may be submitted to correct errors that have a significant effect on previously estimated emissions or emission reductions; and

(ii) Emission inventories may be revised in order to create a consistent time series based on improvements in the emission estimation or measurement techniques used.

(2) Reporting entities must provide the corrected or improved data to EIA, together with an explanation of the significance of the change and its justification.

(3) If a change in calculation methods (for inventories or reductions) is made for a particular year, the reporting entity must, if feasible, revise its base value to assure methodological consistency with the reporting year value.

(c) Definition and deadline for annual reports. Entities must report emissions on a calendar year basis, from January 1 to December 31. To be included in the earliest possible EIA annual report of greenhouse gas emissions reported under this part, entity reports that have not been independently verified must be submitted to DOE no later than July 1 for emissions occurring during the previous calendar year. Reports that have been independently verified must be submitted by September 1 for emissions occurring during the previous year.

(d) Recordkeeping. Entities intending to register reductions must maintain adequate supporting records of base period data for the duration of their participation in the 1605(b) program. Supporting records for all reporting year data must be maintained for at least three years subsequent to the relevant reporting year to enable verification of all information reported. The records should document the basis for the entity's report to EIA, including:

(1) The content of entity statements, including the identification of the specific facilities, buildings, land holding and other operations or emission sources covered by the entity's reports and the legal, equity, operational and other bases for their inclusion;

(2) Information on the identification and assessment of changes in entity boundaries, processes or products that might have to be reported to EIA;

(3) Any agreements or relevant communications with other entities or third parties regarding the reporting of emissions or emission reductions associated with sources the ownership or operational control of which is shared;

(4) Information on the methods used to measure or estimate emissions, and the data collection and management systems used to gather and prepare this data for inclusion in reports;

(5) Information on the methods used to calculate emission reductions, including the basis for:

(i) The selection of the specific output measures used, and the data collection and management systems used to gather and prepare output data for use in the calculation of emission reductions;

(ii) The selection and modification of all base years, base periods and baselines used in the calculation of emission reductions;

(iii) Any baseline adjustments made to reflect acquisitions, divestitures or other changes;

(iv) Any models or other estimation methods used; and

(v) Any internal or independent verification procedures undertaken.

(e) Confidentiality. DOE will protect trade secret and commercial or financial information that is privileged or confidential as provided in 5 U.S.C. 552(b)(4). An entity must clearly indicate in its 1605(b) report the information for which it requests confidentiality. DOE will handle requests for confidentiality of information submitted in 1605(b) reports in accordance with the process established in DOE's Freedom of Information regulations at 10 CFR §1004.11.

§300.10   Certification of reports.

(a) General requirement and certifying official: All reports submitted to EIA must include a certification statement, as provided in paragraph (b) of this section, signed by a certifying official of the reporting entity. A household report may be certified by one of its members. All other reports must be certified by the chief executive officer, agency head, or an officer or employee of the entity who is responsible for reporting the entity's compliance with environmental regulations.

(b) Certification statement requirements. All entities, whether reporting or registering reductions, must certify the following:

(1) The information reported is accurate and complete;

(2) The information reported has been compiled in accordance with this part; and

(3) The information reported is consistent with information submitted in prior years, if any, or any inconsistencies with prior year's information are documented and explained in the entity statement.

(c) Additional requirements for registering. The certification statement of an entity registering reductions must also certify that:

(1) The entity took reasonable steps to ensure that direct emissions, emission reductions, and/or sequestration reported are neither double counted nor reported by any other entity. Reasonable steps include telephone, fax, letter, or e-mail communications to ensure that another entity does not intend to report the same emissions, emission reductions, and/or sequestration to DOE. Direct communications of this kind with participants in demand-side management or other programs directed at very small emitters are not required;

(2) Any emission reductions reported or registered by the entity that were achieved by another entity (other than a very small emitter that participated in a demand-side management or other program) are included in the entity's report only if:

(i) The other entity does not intend to report or register theses reductions directly;

(ii) There exists a written agreement with each other entity providing that the reporting entity is the entity entitled to report or register these emission reductions; and

(iii) The information reported on the other entity would meet the requirements of this part if the entity were reporting directly to DOE;

(3) None of the emissions, emission reductions, or sequestration reported were produced by shifting emissions to other entities or to non-reporting parts of the entity;

(4) None of any reported changes in avoided emissions associated with the sale of electricity, steam, hot or chilled water generated from non-emitting or low-emitting sources are attributable to the acquisition of a generating facility that has been previously operated, unless the entity's base period includes generation values from the acquiring facility's operation prior to its acquisition;

(5) The entity maintains records documenting the analysis and calculations underpinning the data reported on this form and records documenting the analysis and calculations underpinning the base values used in calculating annual reductions are maintained in accordance with §300.9(d) of this part; and

(6) The entity has, or has not, obtained independent verification of the report, as described in §300.11.

§300.11   Independent verification.

(a) General. Entities are encouraged to have their annual reports reviewed by independent and qualified auditors, as described in paragraphs (b), (c), and (f) of this section.

(b) Qualifications of verifiers. (1) DOE envisions that independent verification will be performed by professional verifiers (i.e., individuals or companies that provide verification or “attestation” services). EIA will consider a report to the program to be independently verified if:

(i) The lead individual verifier and other members of the verification team are accredited by one or more independent and nationally-recognized accreditation programs, described in paragraph (c) of this section, for the types of professionals needed to determine compliance with DOE's 1605(b) guidelines;

(ii) The lead verifier has experience managing an auditing or verification process, including the recruitment and allocation of other individual verifiers, and has been empowered to make decisions relevant to the provision of a verification statement; and

(iii) All members of a verification team have education, training and/or professional experience that matches the tasks performed by the individual verifiers, as deemed necessary by the verifier accreditation program.

(2) As further guidance, all members of the verification team should be familiar with:

(i) The subject matter covered by the scope of the verification;

(ii) The requirements of this part;

(iii) Greenhouse gas emission and emission reduction quantification;

(iv) Data and information auditing sampling methods; and

(v) Risk assessment and methodologies and materiality analysis procedures outlined by other domestic and international standards.

(3) An individual verifier should have a professional degree or accreditation in engineering (environmental, industrial, chemical), accounting, economics, or a related field, supplemented by specific training and/or experience in emissions reporting and accounting, and should have his or her qualifications and continuing education periodically reviewed by an accreditation program. The skills required for verification are often cross-disciplinary. For example, an individual verifier reviewing a coal electric utility should be knowledgeable about mass balance calculations, fuel purchasing accounting, flows and stocks of coals, coal-fired boiler operation, and issues of entity definition.

(4) Companies that provide verification services must use professionals that possess the necessary skills and proficiency levels for the types of entities for which they provide verification services. Continuing training may be required to ensure all individuals have up-to-date knowledge regarding the tasks they perform.

(c) Qualifications of organizations accrediting verifiers. Organizations that accredit individual verifiers must be nationally recognized certification programs. They may include, but are not limited to the: American Institute of Certified Public Accountants; American National Standards Institute's Registrar Accreditation Board program for Environmental Management System auditors (ANSI-RAB-EMS); Board of Environmental, Health and Safety Auditor Certification: California Climate Action Registry; Clean Development Mechanism Executive Board; and the United Kingdom Accreditation Scheme.

(d) Scope of verification. (1) As part of any independent verification, qualified verifiers must use their expertise and professional judgment to verify for accuracy, completeness and consistency with DOE's guidelines of:

(i) The content of entity statements, annual reports and the supporting records maintained by the entity;

(ii) The representation in entity statements (or lack thereof) of any significant changes in entity boundaries, products, or processes;

(iii) The procedures and methods used to collect emissions and output data, and calculate emission reductions (for entities with widely dispersed operations, this process should include on-site reviews of a sample of the facilities);

(iv) Relevant personnel training and management systems; and

(v) Relevant quality assurance/quality control procedures.

(2) DOE expects qualified verifiers to refer to the growing body of literature on methods of evaluating the elements listed in paragraph (d)(1) of this section, such as the California Climate Action Registry Certification Protocol, the Climate Leaders Inventory Management Plan Checklist, and the draft ISO 14064.3 Protocol for Validation, Verification and Certification.

(e) Verification statement. Both the verifier and, if relevant, an officer of the company providing the verification service must sign the verification statement. The verification statement shall attest to the following:

(1) The verifier has examined all components listed in paragraph (d) of this section;

(2) The information reported in the verified entity report and this verification statement is accurate and complete;

(3) The information reported by the entity has been compiled in accordance with this part;

(4) The information reported on the entity report is consistent with information submitted in prior years, if any, or any inconsistencies with prior year's information are documented and explained in the entity statement;

(5) The verifier used due diligence to assure that direct emissions, emission reductions, and/or sequestration reported are not reported by any other entity;

(6) Any emissions, emission reductions, or sequestration that were achieved by a third-party entity are included in this report only if there exists a written agreement with each third party indicating that they have agreed that the reporting entity should be recognized as the entity entitled to report these emissions, emission reductions, or sequestration;

(7) None of the emissions, emission reductions, or sequestration reported was produced by shifting emissions to other entities or to non-reporting parts of the entity;

(8) No reported changes in avoided emissions associated with the sale of electricity, steam, hot or chilled water generated from non-emitting or low-emitting sources are attributable to the acquisition of a generating facility that has been previously operated, unless the base year generation values are derived from records of the facility's operation prior to its acquisition;

(9) The verifying entity has procedures in place for the maintenance of records that are sufficient to document the analysis and calculations underpinning this verification. The verifying entity shall maintain such records related to base period data submitted by the reporting entity for the duration of the reporting entity's participation in the 1605(b) program and records related to all other verified data for a period of no less than three years; and

(10) The independent verifier is not owned in whole or part by the reporting entity, nor provides any ongoing operational or support services to the entity, except services consistent with independent financial accounting or independent certification of compliance with government or private standards.

(f) Qualifying as an independent verifier. An independent verifier may not be owned in whole or part by the reporting entity, nor may it provide any ongoing operational or support services to the entity, except services consistent with independent financial accounting or independent certification of compliance with government or private standards.

§300.12   Acceptance of reports and registration of entity emission reductions.

(a) Acceptance of reports. EIA will review all reports to ensure they are consistent with this part and with the Technical Guidelines (incorporated by reference, see §300.13). EIA will also review all reports for completeness, internal consistency, arithmetic accuracy and plausibility. Subject to the availability of adequate resources, EIA intends to notify entities of the acceptance or rejection of any report within six months of its receipt.

(b) Registration of emission reductions. EIA will review each accepted report to determine if emission reductions were calculated using an acceptable base period (usually ending no earlier than 2002), and to confirm that the report complies with the other provisions of this part. EIA will also review its records to verify that the reporting entity has submitted accepted annual reports for each year between the establishment of its base period and the year covered by the current report. EIA will notify the entity that reductions meeting these requirements have been credited to the entity as “registered reductions” which can be held by the reporting entity for use (including transfer to other entities) in the event a future program that recognizes such reductions is enacted into law.

(c) Rejection of reports. If EIA does not accept a report or if it determines that emission reductions intended for registration do not qualify, EIA will return the report to the sender with an explanation of its inadequacies. The reporting entity may resubmit a modified report for further consideration at any time.

(d) EIA database and summary reports. The Administrator of EIA will establish a publicly accessible database composed of all reports that meet the definitional, measurement, calculation, and certification requirements of these guidelines. EIA will maintain separate subtotals of direct emissions, indirect emissions and carbon fluxes. A portion of the database will provide summary information on the emissions and registered emission reductions of each reporting entity.

§300.13   Incorporation by reference.

The Technical Guidelines for the Voluntary Reporting of Greenhouse Gases (1605(b)) Program (January 2007), referred to throughout this part as the “Technical Guidelines,” have been approved for incorporation by reference by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You may obtain a copy of the Technical Guidelines from the Office of Policy and International Affairs, U.S. Department of Energy, 1000 Independence Ave., SW., Washington, DC 20585, or by visiting the following Web site: http://www.policy.energy.gov/enhancingGHGregistry/technicalguidelines/. The Technical Guidelines also are available for inspection at the National Archives and Record Administration (NARA). For more information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal__register/code__of__federal__regulations/ibr__locations.html.

[71 FR 20805, Apr. 21, 2006, as amended at 72 FR 4413, Jan. 31, 2007]

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