[Federal Register: December 5, 2003 (Volume 68, Number 234)]
[Proposed Rules]               
[Page 68203-68231]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05de03-31]                         


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Part V





Department of Energy





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10 CFR Part 300



General Guidelines for Voluntary Greenhouse Gas Reporting; Proposed 
Rule


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DEPARTMENT OF ENERGY

10 CFR Part 300

RIN 1901-AB11

 
General Guidelines for Voluntary Greenhouse Gas Reporting

AGENCY: Office of Policy and International Affairs, U.S. Department of 
Energy.

ACTION: Proposed rule and opportunity for public comment; proposed 
revised guidelines.

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SUMMARY: Section 1605(b) of the Energy Policy Act of 1992 (EPACT), 42 
U.S.C. 13385(b), directed the Department of Energy (DOE or Department) 
to issue guidelines establishing a voluntary greenhouse gas reporting 
program. The guidelines issued by the Department in 1994 to establish 
the Voluntary Reporting of Greenhouse Gases Program were intentionally 
flexible to encourage the broadest possible participation. On February 
14, 2002, the President directed DOE, together with other involved 
Federal agencies, to recommend reforms to enhance this voluntary 
reporting program. The purposes of the proposed revised Guidelines are 
to establish revised procedures and reporting requirements for filing 
voluntary reports, and encourage corporations, government agencies, 
non-profit organizations, households and other private and public 
entities to submit annual reports of their total entity-wide greenhouse 
gas emissions, net emission reductions, and carbon sequestration 
activities that are complete, reliable and consistent. Public comments 
on these proposed revised Guidelines are solicited and a public 
workshop has been scheduled to encourage an open exchange of views on 
this subject.

DATES: Interested persons should submit written e-mail or written 
comments by February 3, 2004 to the addresses given below. You may 
present oral views and data at a public workshop that will be held at 
the Washington Plaza Hotel, 10 Thomas Circle, NW., Massachusetts Avenue 
at 14th Street, Washington, DC 20005, on January 12, 2004, from 8 a.m. 
to 5 p.m.

ADDRESSES: Send e-mail comments to: 1605bgeneralguidelines. comments@hq.doe.gov. Alternatively, written comments may be sent to: 
Mark Friedrichs, PI-40; Office of Policy and International Affairs; 
U.S. Department of Energy; Room 1E190, 1000 Independence Ave., SW., 
Washington, DC 20585. DOE will hold a public workshop at the following 
address: Washington Plaza Hotel, 10 Thomas Circle, NW., Massachusetts 
Avenue at 14th Street, Washington, DC 20005. You may review comments 
received by DOE, the workshop transcript, and any other related 
material at the following Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/ 
enhancingGHGregistry/ proposedguidelines/general guidelines.html. If 
you lack access to the Internet, you may access this Web site by 
visiting the DOE Freedom of Information Reading Room, 1000 Independence 
Avenue, SW., Washington, DC. See Section III of the SUPPLEMENTARY 
INFORMATION section of this notice for more information about public 
participation in this proceeding.

FOR FURTHER INFORMATION CONTACT: Mark Friedrichs, PI-40, Office of 
Policy and International Affairs, U.S. Department of Energy, 1000 
Independence Ave., SW., Washington, DC 20585, or email: 1605bgeneralguidelines. comments@hq.doe.gov [Please indicate if your e-
mail is a request for information, rather than a public comment.]

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
    A. Background.
    B. Process for Finalizing and Implementing Guidelines.
II. Discussion of Proposal and Requests for Comments
    A. Overview.
    B. Defining Reporting Entities.
    C. Defining Entity Boundaries.
    D. Emission Sources and Sinks Covered.
    E. Entity-Wide Reporting of Emissions Inventories.
    F. Entity-Wide Emission Reductions.
    G. Guidelines for Small Emitters.
    H. Emission Reduction Calculations.
    1. Reductions in Emissions Intensity.
    2. Absolute Reductions in Emissions.
    3. Increased Carbon Storage.
    4. Avoided Emissions.
    5. Project Emission Reductions.
    I. Recordkeeping, Report Certification, and Verification.
    J. Starting to Report.
    K. Report Acceptance.
    L. Registration of Emission Reductions.
    M. Sustaining Entity Reports of Emissions and Emission 
Reductions.
    N. EIA Database and Summary Reports.
    O. Cross-cutting and Other Important Issues.
    1. Entity-wide v. Sub-Entity or Project-Only Reporting.
    2. Treatment of Certain Small Emissions.
    3. Excluding the Effects of Changes in Output on Emissions.
    4. Emissions and Reductions Associated With Electricity 
Generation and Use.
    5. Reporting and Registering Changes in Terrestrial Carbon 
Stocks.
    6. Recognizing Emission Offsets.
    7. International Emission Reductions.
    8. Relationship of Proposed Guidelines to Climate VISION, 
Climate Leaders and Other Voluntary Programs To Reduce Greenhouse 
Gas Emissions.
III. Opportunity for Public Comment
    A. Written Comments.
    B. Participation in Public Workshop.
IV. Regulatory Review and Procedural Requirements
    A. Review Under Executive Order 12866.
    B. Review Under the Regulatory Flexibility Act.
    C. Review Under the Paperwork Reduction Act.
    D. Review Under the National Environmental Policy Act.
    E. Review Under Executive Order 13132.
    F. Review Under the Treasury and General Government 
Appropriations Act, 2001.
    G. Review Under Executive Order 12988.
    H. Review Under the Unfunded Mandates Reform Act of 1995.
    I. Review Under the Treasury and General Government 
Appropriations Act, 1999.
    J. Review Under Executive Order 13211.

I. Introduction

A. Background

    Section 1605(b) of the Energy Policy Act of 1992 (EPACT) directed 
the Department of Energy, with the Energy Information Administration 
(EIA), to establish a voluntary reporting program and database on 
emissions of greenhouse gases, reductions of these gases, and carbon 
sequestration activities (42 U.S.C. 13385(b)). Section 1605(b) required 
that DOE's Guidelines provide for the ``accurate'' and ``voluntary'' 
reporting of information on: (1) Greenhouse gas emission levels for a 
baseline period (1987-1990) and thereafter, annually; (2) greenhouse 
gas emission reductions and carbon sequestration, regardless of the 
specific method used to achieve them; (3) greenhouse gas emission 
reductions achieved because of voluntary efforts, plant closings, or 
state or federal requirements; and (4) the aggregate calculation of 
greenhouse gas emissions by each reporting entity (42 U.S.C. 
13385(b)(1)(A)-(D)). Section 1605(b) contemplates a program whereby 
voluntary efforts to reduce greenhouse gas emissions can be recorded, 
with the specific purpose that this record can be used ``by the 
reporting entity to demonstrate achieved reductions of greenhouse 
gases'' (42 U.S.C. 13385(b)(4)).
    In 1994, after notice and public comment, DOE issued General 
Guidelines and sector-specific guidelines that established the 
Voluntary Reporting of Greenhouse Gases Program for recording 
voluntarily submitted data and information on greenhouse gas emissions 
and the

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results of actions to reduce, avoid or sequester greenhouse gas 
emissions. The 1994 General Guidelines are appended to today's proposal 
to provide information with regard to reports that were filed under 
those Guidelines (The General Guidelines and supporting documents may 
be accessed at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.eia.doe.gov/oiaf/1605/guidelines.html). The 
Guidelines were intentionally flexible to encourage the broadest 
possible participation. They permit participants to decide which 
greenhouse gases to report, and allow for a range of reporting options, 
including reporting of total emissions or emissions reductions or 
reporting of just a single activity undertaken to reduce part of their 
emissions. From its establishment in 1995 through the 2001 reporting 
year, 365 entities, including utilities, manufacturers, coal mines, 
landfill operators and others, have reported their greenhouse gas 
emissions and/or their emission reductions to EIA.
    On February 14, 2002, the President announced a series of programs 
and initiatives to address the issue of global climate change, 
including a greenhouse gas intensity reduction goal, energy technology 
research programs, targeted tax incentives to advance the development 
and adoption of new technologies, voluntary programs to promote actions 
to reduce greenhouse gases, and international initiatives. In addition, 
the President directed the Secretary of Energy, in consultation with 
the Secretary of Commerce, the Secretary of Agriculture, and the 
Administrator of the Environmental Protection Agency, to propose 
improvements to the current Voluntary Reporting of Greenhouse Gases 
Program required under section 1605(b) of EPACT. These improvements are 
to enhance measurement accuracy, reliability, and verifiability, 
working with and taking into account emerging domestic and 
international approaches.
    On May 6, 2002, DOE published a Notice of Inquiry soliciting public 
comments on how best to improve the Voluntary Greenhouse Gas Reporting 
Program (67 FR 30370). Written comments were received from electric 
utilities, representatives of energy, manufacturing and agricultural 
sectors, Federal and State legislators, State agencies, waste 
management companies, and environmental and other non-profit research 
and advocacy organizations.
    On July 8, 2002, after considering public comments, the Secretaries 
of Energy, Commerce and Agriculture, and the Administrator of the 
Environmental Protection Agency provided the President with ten 
recommendations on improvements to the Voluntary Greenhouse Gas 
Reporting Program. The four agencies also outlined a public process for 
developing specific revisions to the program Guidelines. Following are 
the ten recommendations for improving the greenhouse gas reporting 
program:
    [sbull] Develop fair, objective and practical methods for reporting 
baselines, reporting boundaries, calculating real results, and awarding 
transferable credits for actions that lead to real reductions.
    [sbull] Standardize widely accepted, transparent accounting 
methods.
    [sbull] Support independent verification of registry reports.
    [sbull] Encourage reporters to report greenhouse gas intensity 
(emissions per unit of output) as well as emissions or emissions 
reductions.
    [sbull] Encourage corporate or entity-wide reporting.
    [sbull] Provide credits for actions to remove carbon dioxide from 
the atmosphere as well as actions to reduce emissions.
    [sbull] Develop a process for evaluating the extent to which past 
reductions may qualify for credits.
    [sbull] Assure the voluntary reporting program is an effective tool 
for reaching the 18 percent goal.
    [sbull] Factor in international strategies as well as State-level 
efforts; and
    [sbull] Minimize transaction costs for reporters and administrative 
costs for the Government, where possible, without compromising the 
foregoing recommendations.
    DOE held public workshops in Washington, D.C., Chicago, San 
Francisco and Houston during November and December of 2002 to receive 
oral views and information from interested persons. In addition, the 
U.S. Department of Agriculture sponsored two meetings in January 2003 
to solicit input on the accounting rules and guidelines for reporting 
greenhouse gas emissions in the forestry and agriculture sectors. These 
workshops and meetings explored in greater depth many of the issues 
raised in the Notice of Inquiry and addressed in the written comments. 
The public comment covered a broad range of issues and views diverged 
widely on some key issues. Generally, there was substantial support for 
revising the current General Guidelines to enhance their utility and to 
accomplish the President's climate change goals.
    DOE today is proposing revised General Guidelines, and subsequently 
will propose Technical Guidelines, that when effective will modify and 
replace the guidelines for the Voluntary Reporting of Greenhouse Gases 
issued by DOE in October 1994. The proposed revised General Guidelines 
would continue to provide procedures for entities to report their 
greenhouse gas emissions inventories and a wide range of actions they 
have taken to reduce, avoid or sequester greenhouse gas emissions. In 
addition, the proposal would enable entities that meet criteria 
established by DOE to register such reductions in a database maintained 
by the Energy Information Administration (EIA). The criteria 
established by DOE will ensure that units of registered reductions will 
be comparable with regard to the standards of accuracy, reliability and 
verifiability. Registered reductions will be recorded in a publicly 
accessible database.
    The Secretary of Energy has approved issuance of this notice.

B. Process for Finalizing and Implementing Guidelines

    After full consideration of the public comments received, DOE will 
develop and issue final revised General Guidelines. In parallel, DOE 
intends to propose Technical Guidelines that will, when finalized, 
specify the methods and factors to be used in measuring and estimating 
greenhouse gas emissions, emission reductions, and carbon 
sequestration. Concurrently with development of the General and 
Technical Guidelines, DOE's Energy Information Administration will, 
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), 
solicit public comment on the reporting elements to be contained in the 
reporting forms to be used under the revised program Guidelines. With 
respect to the existing 1994 General Guidelines, DOE intends to publish 
a Federal Register notice of termination on the same day that DOE 
publishes the notice of final rulemaking setting forth the revised 
guidelines under section 1605(b) of EPACT. Both the notice of 
termination and the notice of final rulemaking will contain an 
effective date, which will be the beginning of a future reporting 
period.

II. Discussion of Proposal and Requests for Comments

    The following section describes the proposed revised General 
Guidelines, summarizes the rationale for the key elements of the 
proposal and solicits public comments on a wide range of specific 
issues.

A. Overview

    The proposed revisions to the General Guidelines are designed to 
enhance the measurement accuracy, reliability and verifiability of 
information reported

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under the 1605(b) program and to contribute to the President's climate 
change goals. The proposed revised Guidelines will continue to provide 
considerable flexibility to entities that wish to report emissions or 
emission reductions in the future, as they have in the past. In 
addition, the revised Guidelines will provide a means for entities that 
are able to meet additional requirements to register emission 
reductions achieved after 2002. This registry will provide special 
recognition to such emission reductions.
    To register emission reductions, reporting entities with 
substantial emissions (average annual emissions of over 10,000 tons of 
carbon dioxide (CO2) equivalent) will need to provide an 
inventory of their total emissions and calculate the net reductions 
associated with entity-wide efforts to reduce emissions or sequester 
carbon. Entities with average annual emissions of less than 10,000 tons 
of CO2 equivalent (small emitters) would be eligible, under 
certain conditions, to register emission reductions associated with 
specific activities even without completing an entity-wide inventory or 
reduction assessment.
    The proposed revised Guidelines would enable and encourage entities 
to report (but not register) emission reductions achieved prior to 
2003. The revised Guidelines would also permit entities to report (but 
not necessarily register) emission reductions associated with specific 
actions or with specific parts of the entity, even if these reports 
were not accompanied by entity-wide emissions and reductions reports.
    The chief executive officer of the company or institution, an 
agency head, head of household or other responsible official would be 
required to certify that the reporting entity accurately followed the 
revised Guidelines for determining emissions, emission reductions and 
sequestration. Entities would be encouraged to obtain independent 
verification of the accuracy of their reports, and their compliance 
with DOE Guidelines.
    For convenience, the basic elements of the proposed revised 
guidelines are graphically represented in Figure 1. DOE solicits public 
comments on this approach and any suggestions of alternative means of 
achieving the objectives outlined above.
BILLING CODE 6450-01-P

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[GRAPHIC] [TIFF OMITTED] TP05DE03.000

BILLING CODE 6450-01-C

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B. Defining Reporting Entities

    Under the proposed revised Guidelines, the first step in the 
reporting process is the definition of the corporation, institution, 
household or other entity that will be submitting reports. At a 
minimum, entities would have to be legally distinct businesses, 
institutions, organizations or households, although reporters would be 
encouraged to define themselves at the highest meaningful level of 
aggregation. The legal basis for determining whether an entity (or its 
subparts) is distinct could be derived from any Federal, state or local 
law (or regulation) governing the entity, including regulations 
applicable to corporations, partnerships, cooperatives, government 
agencies, non-profit organizations, households, or other entities. This 
approach would permit a legally-distinct company, plant or activity to 
define itself as an entity, even if it is partially-or wholly-owned by 
another company. In such cases, any registered reductions would accrue 
only to the reporting entity, rather than the parent company.
    Given the flexibility inherent in this definition, some companies 
and institutions could be all or part of a reporting entity at any one 
of several different levels. For example, an individual electric power 
generating plant might be owned by a partnership of several different 
companies or individuals. One of these partners might be an electric 
utility that owns and operates several other electric generating 
plants, and a transmission and distribution system. And this utility 
might, in turn, be owned by a regional holding company that also owns 
other utilities, as well as other non-electric generating companies. In 
this case, the reporting entity could be defined as the electric 
generating plant, the utility or the holding company. The program 
encourages reporting entities to report at the highest level of 
meaningful financial and operational control, which in this case is 
likely to be either the utility or the holding company. DOE solicits 
comment on whether the proposed guidelines are likely to cause entities 
to establish boundaries that reflect a higher level of corporate or 
institutional aggregation, as is desired. DOE also solicits 
recommendations on what additional provisions might preserve 
flexibility in the establishment of boundaries while also preventing or 
further discouraging the shifting of emissions to non-reporting parts 
of the entity in order to create the appearance of net emission 
reductions. Finally, DOE solicits comment on the desirability of more 
prescriptive approaches to the definition of entities, such as a 
requirement that entity definitions correspond to those used for 
Federal tax purposes.
    The Guidelines would require that the name chosen to represent the 
entity generally correspond to the activity covered by the report. For 
example, a large multi-product manufacturer should not use its 
corporate name to report the emissions and emission reductions of just 
one of its many subsidiaries. However, there may be instances when 
some, but not all subsidiaries of a large corporation may want to 
report as a single entity. One reason to report as a single entity 
might be that certain subsidiaries have a common business activity, 
while others do not. However, another reason might be that some 
subsidiaries could demonstrate emission reductions, while others could 
not. DOE solicits comments on how the Guidelines might provide the 
flexibility needed by entities with special circumstances, while 
discouraging abuses of this flexibility that could produce misleading 
impressions of entity performance.
    Another question concerns the possible role of trade associations 
and other third parties as consolidators of entity-specific reports 
into an aggregate report to DOE. While associations may report 
information collectively for their memberships under the current 
guidelines, this may have implications for the accuracy and 
reliability--and transparency--of reports submitted under the revised 
guidelines. Should trade associations and other third parties be 
required to submit some or all of the entity-specific data that might 
be required by the revised Guidelines? Should the CEOs, other senior 
officials, or heads of entities be required to certify the accuracy of 
their companies' reports when submitted to or through trade 
associations? Should trade associations and other third parties be able 
to ``register emission reductions'' or only file reports for the 
record?

C. Defining Entity Boundaries

    To report on an entity-wide basis and to register emissions 
reductions, reporting entities would have to provide an ``entity 
statement'' that meaningfully defines the operations and facilities 
(such as office buildings or vehicle fleets) covered by their entity-
wide reports, and the greenhouse gas sources and sinks encompassed by 
these operations and facilities. Such operations would include those 
wholly owned and operated by the entity, and might include those 
operations that are partially-owned, leased or operated by the entity. 
Entities would be required to coordinate with other entities that 
shared ownership of particular operations to ensure that no double 
counting occurred. Entities would also have to ensure that each annual 
report consistently used the boundaries identified in prior year 
reports, unless an explicit description of any changes made and their 
effects on emissions accompanied the report. In cases where an entity 
undergoes a significant structural change, it may have to establish a 
new base year for all or part of its operations, or, in the case of 
acquisitions, recalculate its original baseline based on the prior year 
emissions of the acquired plant.

D. Emission Sources and Sinks Covered

    Reports would be able to cover any greenhouse gas or sink that is 
consistent with the definitions established in the General Guidelines. 
An entity-wide inventory would need to cover all significant 
(determined by share of total emissions or absolute quantity of 
emissions), anthropogenic greenhouse gas emission sources within the 
entity's defined boundaries. Entity-wide reports must also cover all 
significant emission sinks. Entity-wide reports must encompass, at 
minimum, all six greenhouse gases specified in the Guidelines, whether 
emitted directly by the entity's operations and facilities, or 
indirectly in the generation of purchased electricity, steam or hot (or 
chilled) water used by the entity. Indirect emissions other than those 
specifically cited in the Guidelines may be reported separately, but 
reductions associated with such other indirect emissions may not be 
registered. Entities also may separately report, but not register, 
emissions and emission reductions associated with other gases (e.g. 
chlorofluorocarbons, black soot) that may have significant, 
quantifiable climate forcing effects, provided that DOE's Technical 
Guidelines specify the methods for measuring and reporting their 
emissions. DOE is soliciting comment on criteria for identifying such 
gases and on procedures for developing the necessary Technical 
Guidelines. All DOE proposals to permit the reporting of additional 
gases will be made available for public comment before being put into 
effect. DOE solicits comment on this approach and on a possible 
alternative that would permit participating entities to report (but not 
register) the emissions and emission reductions associated with other 
gases, even if DOE's Technical Guidelines did not specifically cover 
such other gases.

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E. Entity-Wide Reporting of Emissions Inventories

    To be eligible to register emission reductions, entities with 
substantial emissions (an annual average in excess of 10,000 tons of 
CO2 equivalent) would need to report annual entity-wide 
inventories of their emissions and sequestration. Such inventories 
would provide a basis for assessing the significance of reported 
emission reductions relative to the entity's total emissions.

F. Entity-Wide Emission Reductions

    To register emissions reductions, entities with average annual 
emissions over 10,000 tons of CO2 equivalent would be 
required to demonstrate, to the maximum extent practicable, that the 
reported reductions represent an actual net decrease in entity-wide 
emissions, as calculated using one or more of the methods allowed by 
the General and Technical Guidelines. Some entities, such as 
electricity generators, would be expected to calculate net emission 
reductions for their entire entity (using one or more of the methods 
described below and in the Technical Guidelines). Others, such as 
multi-product manufacturers, may not be able to determine the net 
emission reductions achieved by all elements of their entity using the 
methods allowed by the Guidelines. These types of reporters could 
report the net emission reductions for as much of their entity as was 
practicable, in addition to reporting their entity-wide emission 
inventories.

    Example: A multi-product manufacturer has instituted company-
wide efforts to reduce emissions, but because its U.S. output is 
growing rapidly, its absolute U.S emissions have not declined. By 
using different calculation methods (intensity for many facilities 
and absolute emissions for others, as well as some project-specific 
calculations) it can quantify the emission reductions associated 
with 90% of its total emissions. It would report its total emissions 
and quantified emission reductions to DOE, and explain that it is 
not practicable to quantify the emission reductions associated with 
the remaining 10% of its operations because there are no year-to-
year measures of output for these operations (because they involved 
the production of totally new products). In this case, the entity 
could register its reported emission reductions, but the data 
submitted in its report would clearly indicate that these reductions 
were based on an assessment of just 90 percent of the entity's 
emissions.
    Net emission reductions achieved by third parties (offsets) 
could be included in an entity's report and be registered as long as 
the third party or other entity involved observed all of the rules 
that would have applied had it chosen to report its net emission 
reductions directly, and the entities involved have agreed that the 
reporting entity can register the emission reductions identified 
(see section II.O.5 below for additional discussion on the treatment 
of offsets).

    The proposed Guidelines indicate that the owner of the facility, 
land or vehicle that generated the emission reductions or sequestration 
is the entity presumed to have the right to report and register any 
emission reductions or sequestration. For example, the owner of a wind 
turbine that sells its power to the grid is presumed to have the right 
to register such resulting emission reductions, even though this wind-
generated electricity might be purchased at a premium by a local 
utility and, ultimately, resold at a premium rate to a local 
manufacturer. This presumption can be altered, however, if there is a 
written agreement between the entities involved to transfer this right.

G. Guidelines for Small Emitters

    Entities with average annual emissions of less than 10,000 tons of 
CO2 equivalent, such as many farms and forest operations, 
small businesses and individuals, could report and register emission 
reductions that have occurred during and after 2003 without submitting 
the results of an entity-wide emissions inventory or an entity-wide 
assessment of the annual changes in their emissions, avoided emissions 
and sequestration. Entities reporting under this provision would be 
required to determine the total annual emissions and sequestration 
associated with the type of activities on which they choose to report, 
the net emission changes associated with these specific activities, and 
to certify that the changes reported were not caused by actions likely 
to cause increases in emissions elsewhere within the entity's 
operations. Small emitters would be required to use the same methods 
for calculating emission reductions available to other reporters. DOE's 
Technical Guidelines will provide a list of the types of activities 
about which small emitters might report. It is expected that households 
and many small businesses, farms, and forest operations would be exempt 
from the requirement to submit entity-wide inventories. The use of a 
multi-year average rate of emissions is intended to enable certain 
small entities that have periodic spikes in their annual emissions (for 
example, a land owner that periodically harvests trees) to qualify for 
this exemption. Comments are specifically solicited on (1) whether 
10,000 tons of CO2-equivalent emissions would be the 
appropriate threshold quantity to achieve this objective, and (2) the 
appropriate period of time over which small entities should be 
permitted to average their annual emission rates. DOE is also 
soliciting comments on whether these special rules for small emitters 
are appropriate and how to ensure that reductions reported by small 
emitters are not a result of shifting emissions to non-reporting parts 
of the entity.

H. Emission Reduction Calculations

    All reported and registered emission reductions would have to be 
calculated using one of the methods identified below, together with the 
procedures to be set forth in DOE's Technical Guidelines. The proposed 
revised General Guidelines recommend the use of emission intensity 
indicators as the basis for determining emission reductions, but would 
permit the use of several other methods to calculate emission 
reductions and sequestration as long as the method used excludes 
reductions caused by reductions in output. Regardless of the method 
used, a reporting entity would have to certify that none of the 
reported emission reductions were: Double counted by the reporting 
entity (or, to its knowledge, by any other reporting entity); or were 
the result of shifts in operations or activity from one part of the 
entity to another part of the entity, or to outside the boundaries of 
the entity. Entities would be required to report each emission 
reduction and sequestration calculation by type, indicate the types of 
actions taken that resulted in the reported emission reduction, and 
explain the selection of each indicator of output used. Comments are 
invited on the appropriateness of each of the methods described below 
and on the definitions provided in the proposed Guidelines. Additional 
guidance on each of these methods will be provided in the Technical 
Guidelines, including lists of possible output indicators, calculation 
methods for determining reductions associated with agricultural, 
forestry and geologic sequestration, methods and emission factors for 
calculating avoided emissions, and project-based methods, among others.
    1. Reductions in emissions intensity, as long as the reporting 
entity demonstrates that the intensity metrics used are based on 
measured (or estimated) emissions and measured indicators of output 
that accurately represent the physical (or, in some cases, economic) 
output associated with the covered emissions, and that acquisitions, 
divestures or changes in products have not contributed significantly to 
the reductions.
    2. Absolute reductions in emissions, as long as the entity 
demonstrates that these measured reductions were not caused by declines 
in its U.S. output.

[[Page 68210]]

    3. Increased carbon storage (for actions within entity boundaries), 
as long as the entity demonstrates the sequestration measured or 
estimated represents a net increase in the quantity stored by the 
entity and has not been re-released to the atmosphere (ongoing, annual 
reports would be required).
    4. Avoided emissions (for actions within entity boundaries that 
reduce emissions outside entity boundaries) that reflect the indirect 
emission reductions achieved as a result of a measured increase in the 
net sales of energy generated by low-or no-emission technologies.
    5. Project emission reductions (for actions taken to reduce direct 
or indirect emissions within entity boundaries), as long as they 
exclude any reductions that might have resulted from reduced output or 
from shifting emissions to operations not included in the reported 
projects, and are derived from measured performance data or by using 
estimation methods consistent with DOE Technical Guidelines. In the 
context of entity-wide reports, this last calculation method is 
intended only for use when none of the other methods is practicable.

I. Recordkeeping, Report Certification, and Verification

    Reporters under the existing program must certify the accuracy of 
their reports, but are not required to maintain records. Under the 
proposed revised Guidelines, the chief executive officer, agency head, 
head of household or person responsible for the reporting entity's 
compliance with environmental regulations would certify that reports 
are complete, accurate and consistent with DOE guidelines, and that 
sufficient records will be maintained for at least three years to 
enable independent verification. Reporting entities are strongly 
encouraged to obtain independent verification of their reports. The 
proposed Guidelines describe what would constitute such verification, 
including a description of the types of firms or institutions that 
might be qualified to independently verify the entity's reports, and 
the elements of an entity's records and reports that should be 
verified.
    The proposed General Guidelines would require reports to EIA that 
are sufficiently detailed to enable EIA to review and confirm the final 
emission reduction calculations for each method and output measure 
utilized, and to review and confirm the rates of conversion used for 
each category of greenhouse gas covered and for electricity-related use 
or emissions avoidance, by region. EIA's review of the data submitted 
would be intended to assure consistency with the requirements specified 
in the General and Technical Guidelines. This level of reporting would 
indicate the basic components of each entity's emission inventory and 
of its entity-wide emission reductions. Entities would be required to 
maintain more detailed records, sufficient to permit an independent 
verification. The proposed levels of data reporting and recordkeeping 
represent a middle ground between the views of stakeholders who favor 
summary data and those stakeholders who prefer more detailed data that 
would be the basis for independent verification.
    The proposal limits the recordkeeping requirement to three years. 
Of course, reporting entities may keep their records for a longer 
period of time if they deem it in their interest to do so.
    The proposed Guidelines would require that the chief executive 
officer or other senior official of the reporting entity certify the 
accuracy, consistency and completeness of all reports. In addition, the 
Guidelines would encourage, but not require, independent verification 
of all reports. The proposed Guidelines would provide only general 
guidance on what DOE considers the necessary qualifications of 
verifiers and the information that they must verify. This guidance is 
intended to provide some assurance that such verifiers are independent 
and appropriately qualified, while still giving entities considerable 
flexibility in the selection of the type of firm most appropriate to 
perform such an independent verification. DOE invites comments on 
whether the general guidance provided is sufficient to achieve this 
objective.
    While some stakeholders believe that independent verification 
should be required of all reports, many felt that independent 
verification is only necessary if entities seek to sell their 
registered emission reductions and, in such cases, private markets are 
likely to specify the type of independent verification required. While 
DOE received many comments that questioned the credibility of many of 
the emission reductions reported under the existing program, most of 
these concerns related to the methodology used to calculate the 
reported reductions, rather than the validity of the data used or 
reported. While DOE believes that requiring a senior officer to certify 
reports will provide adequate assurance that the data reported are 
reliable, the proposed Guidelines would strongly encourage reporters to 
obtain independent verification. DOE solicits public comment on this 
approach and on whether further consideration should be given to 
requiring independent verification of emission reductions prior to 
registration.

J. Starting To Report

    Under the proposed revised Guidelines, entities would be permitted 
to begin reporting their prior-year emissions and emission reductions 
at any time. In general, the first full year for which an emissions 
inventory is available would be considered the entity's base year, 
although DOE would encourage entities to determine their base year by 
calculating the average emissions or emissions intensity during a base 
period of up to four years in length. This flexibility would permit a 
reporter to select the base year or base period most representative of 
actual operations. It may also, however, allow a reporter to select the 
most advantageous base year or base period (i.e., a period that would 
enable the reporter to register the greatest amount of reductions). DOE 
solicits comments on whether this flexibility is appropriate and, if 
not, what steps might be taken to limit this flexibility. To focus the 
program on current and future efforts to reduce greenhouse gas 
emissions, entities would be permitted to register only those emission 
reductions calculated using a base year no earlier than 2002 (or base 
period of up to four sequential years ending no earlier than 2002). 
However, entities may still report emission inventories and reductions 
for previous years, as long as any prior year emission reductions are 
calculated using a base year no earlier than 1990 (or a base period no 
earlier than 1987-1990). To be accepted as entity-wide reports under 
the revised Guidelines, emission reductions already reported to the 
1605(b) registry must be recast to fully comply with the revised 
Guidelines.

K. Report Acceptance

    Upon receipt, EIA would review all reports to ensure consistency 
with the revised Guidelines. If EIA determines the report follows the 
General and Technical Guidelines, and EIA's Reporting Form 
Instructions, the report would be classified as either an entity-wide 
report or otherwise, and accepted.

L. Registration of Emission Reductions

    Accepted entity-wide reports and reports from small emitters would 
then be further reviewed to determine if reductions were eligible to be 
registered. Entity-wide reports and reports from small entities that 
have used the methods identified in the General and Technical 
Guidelines, as well as EIA's Reporting Form Instructions, to

[[Page 68211]]

demonstrate they have achieved emission reductions after 2002 and have 
met all other applicable requirements would have the identified 
reductions registered in the 1605(b) database under the name of 
reporting entity and the year the reduction was achieved.
    Registering only reductions that are achieved after 2002 would 
focus the program on those reductions most likely to contribute to the 
achievement of the President's goal for reducing U.S. emissions 
intensity by 18% between 2002 and 2012. In addition, because all of the 
data required to register reductions would be relatively recent, it 
would help ensure that all entities have an equal opportunity to 
register emission reductions under the new program. Nevertheless, the 
revised Guidelines would continue to permit entities to report emission 
reductions back to 1991, the earliest year permitted by the authorizing 
statute, and reports that comply with the Guidelines would be made 
publicly available by EIA. DOE solicits public comments on this 
approach and any suggestions of alternative means of achieving the 
objectives outlined above.

M. Sustaining Entity Reports of Emissions and Emission Reductions

    To register emission reductions in any future year, an entity would 
be required to submit ongoing annual reports that document the net, 
cumulative emission reductions achieved relative to the entity's base 
year (or base period). Only additions to cumulative emission reductions 
(relative to the chosen base year or base period) would be recognized 
in future years. This requirement would reduce the quantity of emission 
reductions eligible for registration in future years if the reporting 
entity experiences a net increase in output-adjusted emissions after 
beginning to report. This approach would preserve the recognition given 
to all previously registered emission reductions, even if an entity 
experienced net emission increases in the future or stopped reporting. 
DOE solicits comments on this approach and possible alternatives, 
including those that might permit or require DOE to delete previously 
registered emission reductions if an entity did not continue to submit 
annual reports. Ongoing, annual reporting would be required to maintain 
recognition for registered emission reductions resulting from 
sequestration.

N. EIA Database and Summary Reports.

    The EIA Administrator would establish a public database including 
all data that meets the definitional, measurement, calculation and 
certification requirements of the revised Guidelines. The database 
would provide summary information on each reporting entity's greenhouse 
gas emissions and its registered emission reductions, by year, 
according to the categories described above. The database would also 
provide access to all accepted reports.

O. Cross-Cutting and Other Important Issues

    This section discusses various issues that affect more than one 
provision of the proposed revised Guidelines or were not highlighted in 
any of the preceding sections. DOE is seeking public comment on all of 
these issues, and certain specific questions are posed.
1. Entity-Wide v. Sub-Entity or Project-Only Reporting
    The proposed Guidelines would highlight the net contribution of 
reporting entities to reducing greenhouse gas emissions, rather than 
sub-entity reductions resulting from actions taken in only some parts 
(rather than the whole) of the entity. This reflects the 
Administration's interest in fostering broad efforts by corporations, 
institutions and other entities to reduce their total emissions. Over 
time, individual companies and other entities often take many actions 
that either increase or decrease their emissions of greenhouse gases. 
It is the net effect of all of these actions on an entity's emissions 
that is the most important indicator of an entity's contribution to the 
President's goal of reducing U.S. emissions intensity. Under the 
revised Guidelines, most reporters would be able to register emission 
reductions only if they could demonstrate they had achieved a net 
reduction in their total emissions, relative to their physical or 
economic output. Small emitters, such as households, and some farms, 
forest operations, and small businesses, would be permitted to register 
the reductions achieved in just one area of activity, such as building 
operations or forestry, rather than accounting for all of their 
emissions, so long as they certify that these reductions are not a 
product of shifting emissions to non-reporting parts of the entity. In 
addition, the proposed Guidelines would continue to provide a mechanism 
for large emitters to report, but not register, the reductions 
resulting from individual actions or projects affecting a part of the 
entity's emissions, even if they could not demonstrate that they had 
achieved a net reduction in their total emissions, relative to their 
physical or economic output. DOE solicits comments on this approach and 
on possible alternatives to this approach, including circumstances 
under which project-based or sub-entity reductions might be registered 
in the absence of net entity wide reductions.
2. Treatment of Certain Small Emissions
    The proposed Guidelines would permit reporters to exclude certain 
emissions that are comparatively small, as well as all non-
anthropogenic emissions. Specifically, an entity could exclude 
emissions from multiple sources (and multiple gases) as long as the 
total emissions excluded did not exceed 3% of its total emission 
inventory or 10,000 tons of CO2 equivalent, whichever was 
smaller. This exclusion is intended to enable entities to exclude 
small, and possibly widely dispersed, emissions that are likely to be 
especially costly to monitor and report, but which would have little 
effect on the total emissions or emission reductions reported. However, 
this approach has some potential drawbacks. For example, very large 
emitters, such as large power generators or large energy intensive 
industries applying this standard would have to account for a very high 
percentage of their total emissions (in some cases over 99.9%). 
Accounting for such a high percentage of total emissions could be 
burdensome and would have little effect on the totals reported. Several 
possible alternatives exist. One option might be to provide for uniform 
percentage exclusion, such as permitting all entities to exclude up to 
3 percent of their emissions. This could lead some large utilities or 
industries to exclude large quantities of emissions that would be 
relatively easy to include in their reports. Another possible 
alternative is the addition of a minimum percentage exclusion, such as 
1 percent. Still another alternative might be to permit firms to 
exclude up to 3 percent or 10,000 tons of CO2 equivalent, 
whichever is greater. DOE solicits comments on the approach proposed, 
as well as various alternatives approaches.
3. Excluding the Effects of Changes in Output on Emissions
    The proposed Guidelines would strongly encourage the use of 
emissions intensity indicators as the basis for calculating emission 
reductions and would require that any method used to calculate emission 
reductions ensure that reductions caused by declines in the reporting 
entity's output be excluded. This would require entities to develop 
useful physical (and/or possibly economic) indicators of the output 
associated with the emissions being assessed. For power generators

[[Page 68212]]

supplying electricity to the grid, the preferred measure of output is 
clear: kilowatt hours. Certain large manufacturers also have well-
established measures of output that have already been widely used for 
many years, such as tons of cement. But many product manufacturers may 
have some difficulty identifying useful output indicators especially if 
they desire to develop indicators that represent the output associated 
with a large a number of different processes and products. Broad 
physical units, such a pounds of product (sometimes used by chemical 
manufacturers), often encompass a wide range of different products, and 
a similarly wide range of production processes and product values. As a 
result, some important shifts between processes or product types may 
not be captured by such a broad indicator. As an alternative, some 
entities might consider the use of economic indicators, although 
analysis of some entity-level economic indicators suggests that they 
may be significantly affected by changes in market conditions and may 
serve as poor indicators of production-related changes by individual 
entities. DOE intends to identify in the Technical Guidelines various 
output indicators and provide guidance on the selection of appropriate 
indicators. DOE may specify the use of particular indicators for 
certain types of economic activity, but is likely to give most 
reporters the flexibility to adopt the best indicators for their 
particular circumstances. Given the potential deficiencies of some 
output indicators, DOE invites public comment on what information 
entities should be required to provide to justify the selection of 
their output indicators and what criteria DOE should use to determine 
whether a particular output measure is acceptable.
    A related issue concerns entities that base their emission 
reductions on changes in their ``absolute'' emissions. The proposed 
Guidelines would require such entities to demonstrate that any reported 
reductions were not associated with declines in the output associated 
with those emissions. Because entities should only use this approach if 
they could not develop an output indicator that would enable them to 
track their emissions intensity, they may have difficulty demonstrating 
that their output had not declined. Again, DOE is interested in 
receiving comments on what output measures or other information such 
entities should be required to provide to demonstrate that their output 
has not declined and what criteria DOE might use to determine whether 
the information provided was sufficient.
4. Emissions and Reductions Associated With Electricity Generation and 
Use
    Several key provisions of the Guidelines deal with how entities are 
to report emissions and emission reductions associated with electricity 
generation and use. Approximately 32 percent of total U.S. emissions of 
greenhouse gases are released in the generation of electricity. As 
there are substantial opportunities to reduce the emissions associated 
with both the generation and use of electricity, it is important that 
the program cover both electricity generators and consumers. In doing 
so, however, it is also important to ensure: (1) That electricity-
related emissions and emission reductions are not double counted; (2) 
that the conversion factors used to translate kilowatt hours into 
emissions are accurate indicators of the actual emissions associated 
with the generation of the electricity; and (3) that recognition for 
reductions is given to those entities primarily responsible for those 
reductions. Both these proposed General Guidelines and the Technical 
Guidelines, to be proposed subsequently, will attempt to achieve these 
objectives.
    To avoid double counting, the proposed General Guidelines would 
require users to distinguish between the ``indirect'' emissions 
associated with electricity purchases (as well as purchased steam, and 
chilled/hot water) and their direct emissions. This will enable entity-
level emission inventories to include such indirect emissions, while 
permitting DOE to exclude such emissions from compilations of multiple 
reports, if desired. In the Technical Guidelines, DOE will specify the 
factors to be used to convert purchased electricity use to greenhouse 
gas emissions. For the purposes of emission inventories, DOE is likely 
to specify a factor based on the average emissions per kilowatt hour 
for the region in which the electricity was consumed. However, for the 
purpose of calculating emission reductions associated with reduced 
electricity demand, DOE may specify an alternative factor, such as one 
based on the emissions associated with regional electricity supplies at 
the margin (largely excluding electricity generated by hydro, nuclear 
power plants and some coal, which tend to be fully utilized, regardless 
of changes in regional demand for power). These factors might change 
annually and could be required to be used by all consumers of purchased 
electric power, unless the reporter could demonstrate special 
circumstances.
    There may be two methods for determining emission reductions 
associated with the generation of electricity. One method might be used 
to calculate reductions in the emissions intensity of existing power 
production (e.g., through fuel switching or increased efficiency) and 
the other might be used to calculate the indirect reductions (or 
avoided emissions) that result from increasing the electric power 
generation from non-emitting or low-emitting sources. DOE is seeking to 
provide recognition to existing power generators that reduce their 
emissions intensity, while also establishing a level playing field 
among producers of new or additional power supplies, and end-users of 
electricity that reduce their demand.
    DOE intends to provide, through its Technical Guidelines, clear 
direction on how to calculate emission reductions associated with the 
generation and purchase of electricity. While the specific 
methodologies and factors to be used have yet to be defined, DOE is 
soliciting suggested approaches that would achieve the objectives 
identified, as well as specific recommendations on how to develop the 
conversion factors described and how to most appropriately distinguish 
between existing and new power production and emissions.
5. Reporting and Registering Changes in Terrestrial Carbon Stocks
    The proposed guidelines would require entity-wide emission 
inventories to include emissions and sequestration associated with 
terrestrial carbon stocks. Changes in the amount of carbon stored in 
sinks within the entity's boundaries over the inventory year would 
determine the quantities of such emissions and sequestration included 
in inventories. Entities that meet all of the relevant requirements in 
the general and technical guidelines may also register year-to-year 
increases in carbon stocks as ``registered reductions.'' Ongoing 
reporting will be required to ensure that any future changes in these 
stocks are fully reflected in the entity's emission inventories and 
registered emission reductions. The Department seeks comments on this 
provision as well as alternatives. For example, one alternative 
approach would calculate registered reductions as the change in carbon 
stocks during an inventory year relative to the change in stocks during 
a base year or period.

[[Page 68213]]

6. Recognizing Emission Offsets
    As proposed, the General Guidelines would permit entities to report 
and register emission reductions achieved by others, as long as the 
entity that achieved the reductions observed all of the requirements 
applicable to reporters and the entities involved indicated that they 
had an agreement stipulating who would report the emission reductions. 
These provisions are designed to enable and encourage large emitters to 
support efforts to reduce emissions outside the boundaries of their 
entities. DOE believes this may be especially desirable when the 
opportunities for reducing emissions within an entity's boundaries are 
comparatively limited or costly. However, these provisions raise a 
number of issues upon which DOE is seeking public comment.
    Most of these issues concern the information that must be submitted 
by a reporting entity about the emission reductions achieved by a non-
reporting entity. For example, must the reporting entity provide all of 
the information that the non-reporting entity would have been required 
to submit directly, including an Entity Statement, an emissions 
inventory (unless exempted), and an entity-wide assessment of emission 
reductions (unless exempted)? Must the chief executive officer or other 
senior manager of the non-reporting entity certify to the accuracy of 
all of the information reported by the reporting entity? Could a non-
reporting entity enter into agreements permitting some of its emission 
reductions to be registered by one entity and the remainder by one or 
more other entities? Must the reporting entity demonstrate that it 
helped finance or manage the achievement of the emission reductions 
achieved by some other entity? One approach that might avoid many of 
these potential issues would be to require direct reporting by all 
entities that generate emission reductions. This approach would ensure 
that complete reports, submitted directly by the entity that owned the 
facilities or land that produced the emission reductions, would be 
available for all registered emission reductions. But requiring direct 
reports by all entities might discourage emission reductions by 
entities that are unwilling to report directly and might discourage 
support for such offset projects by large emitters, such as utilities. 
DOE solicits comments on the approach proposed and on possible 
alternatives.
7. International Emission Reductions
    The proposed revised Guidelines do not address either the reporting 
of non-U.S. emissions and emission reductions or the registration of 
non-U.S. emissions reductions. DOE is soliciting public comments on 
whether non-U.S. emissions and emission reductions should continue to 
be eligible for reporting under the revised program, recognizing that 
the current guidelines provide for reporting of international 
activities.\1\ DOE is also soliciting public comments on whether non-
U.S. emissions and emission reductions should qualify for registration 
and, if so, what procedures and requirements should be established for 
registration of such emissions and emission reductions.
---------------------------------------------------------------------------

    \1\ Since the current Guideline became effective in 1994, DOE 
has interpreted the Congressional intent underlying the statute to 
allow for the reporting of international activities.
---------------------------------------------------------------------------

    Many factors are relevant to how non-U.S. emissions and emission 
reductions should be treated under the program with respect to both 
reporting and registration. Since 1994, many entities have reported on 
overseas activities; many companies likely to participate in the 
revised program have substantial business operations both inside and 
outside the United States. At the same time, reporting and registration 
of non-U.S. emissions and emission reductions raise certain issues that 
do not arise in the context of the reporting and registration of U.S. 
emissions and emission reductions. (For example, certifying the 
accuracy of data may be more complicated.)
    In addition to requesting comment on the overall issue of whether 
to include international activities, DOE specifically requests comment 
on the following questions: How would the concept of ``entity-wide'' 
reporting be extended to include non-U.S. activities? Should an entity 
wishing to report non-U.S. emission reductions achieved in its own non-
U.S. operations be required to inventory and report on all non-U.S. 
emissions and to assess changes in its emissions worldwide? Or should 
such entity only be required to report on its non-U.S. operations in 
specific countries? What requirements should third-party non-U.S. 
offsets be required to meet? To be eligible for registration, should 
reports of non-U.S. emissions reductions require independent 
verification? What would be the implications, including for 
participation in the 1605(b) program, if non-U.S. activities were 
excluded from reporting and/or registration?
8. Relationship of Proposed Guidelines to Climate VISION, Climate 
Leaders and Other Voluntary Programs To Reduce Greenhouse Gas Emissions
    DOE, the Environmental Protection Agency and other Federal agencies 
have established programs to encourage companies, trade associations 
and other non-government organizations to take voluntary actions to 
reduce, sequester, or avoid greenhouse gas emissions. For example, 
industry participants in DOE's ``Climate VISION'' program, a 
Presidential initiative launched in February 2003, and EPA's Climate 
Leaders program have made voluntary commitments to reduce GHG emissions 
or emissions intensity by a specified amount, and to monitor and report 
on their progress.
    The Administration intends to use the 1605(b) program to document, 
where possible, the progress of participants in these voluntary Federal 
programs. This is consistent with the President's desire that the 
1605(b) registry be a ``tool that goes hand-in-hand with voluntary 
business challenges * * * by providing a standardized, credible vehicle 
for reporting and recognizing progress.'' However, additional reporting 
may be required for other specific voluntary Federal programs in order 
to provide distinct benefits to program participants.
    DOE is soliciting comment on the merits of using the 1605(b) 
program for documenting progress of participants in voluntary Federal 
programs towards meeting their emissions reduction goals.

III. Opportunity for Public Comment

A. Written Comments

    You should submit written comments by February 3, 2004. Because we 
continue to experience occasional mail delays due to extra processing 
required for delivery of mail to Federal agencies, we encourage you to 
submit comments electronically by e-mail at 1605bgeneralguidelines. comments@hq.doe.gov. We will consider comments received after the 
comment deadline only to the extent practicable. Comments should be 
submitted to the e-mail or street addresses given in the ADDRESSES 
section of this notice. Written comments should be identified on the 
documents themselves and on the outside of the envelope, or in the e-
mail message, with the designation [insert name of rulemaking and 
docket number]. All comments received and transcripts of any public 
workshop held will be available for public inspection at the following 
Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/

[[Page 68214]]

enhancingghgregistry/ proposedGuidelines/comments. Persons without 
access to the internet can obtain such access to this Web site by 
visiting the DOE Freedom of Information Reading Room, Room 1E-190, 
Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 
20585, (202) 586-3142, between 9 a.m. and 4 p.m., Monday through 
Friday, except Federal holidays.
    If you submit information that you believe to be exempt by law from 
public disclosure, you should submit one complete hardcopy and two 
hardcopies from which the information claimed to be exempt by law from 
public disclosure has been deleted. DOE is responsible for the final 
determination with regard to disclosure or non-disclosure of the 
information and for treating it accordingly under the DOE Freedom of 
Information Act regulations at 10 CFR 1004.11.

B. Participation in Public Workshop

    You will find the time and place of the public workshop at the 
beginning of this notice. We invite any person who has an interest in 
today's notice, or who is a representative of a group or class of 
persons that has an interest in these issues, to participate in the 
workshop. Because space may be limited, persons wishing to participate 
in the workshop should inform DOE by identifying the person or persons 
likely to attend, an e-mail or phone number for follow-up contacts, and 
providing a brief description of the specific issues of particular 
interest. This information may be provided electronically at the 
following Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/ enhancingGHGregistry/ 
proposedguidelines/general guidelines.html or may be provided in 
writing to the person listed in the beginning of this notice.
    DOE will designate a DOE official to preside at the workshop, and 
may also use a professional facilitator to facilitate discussion. The 
workshop will not be conducted under formal rules governing judicial or 
evidentiary-type proceedings, but DOE reserves the right to establish 
procedures governing the conduct of the workshop. The workshop will be 
organized so as to encourage the open discussion of specific issues by 
the range of stakeholders and government representatives present. Prior 
to the workshop a draft agenda, identifying specific issues for 
discussion, will be made available at the following Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/
 enhancingGHGregistry/ proposedguidelines/general 
guidelines.html. There will also be opportunities during the workshop 
for the identification and discussion of issues not specifically 
identified on the agenda. The presiding official will announce any 
further procedural rules, or modification of the above procedures, 
needed for the proper conduct of the workshop. Statements for the 
record of the workshop will be accepted at the workshop.
    DOE will make the entire record of the rulemaking, including the 
workshop transcript, available for inspection at the following Web 
site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.pi.energy.gov/ enhancingGHGregistry/ 
proposedguidelines/general guidelines.html. In addition, any person may 
purchase a copy of the transcript from the transcribing reporter.

IV. Regulatory Review and Procedural Requirements

A. Review Under Executive Order 12866

    Today's action has been determined to be ``a significant regulatory 
action'' under Executive Order 12866, ``Regulatory Planning and 
Review'' (58 FR 51735, October 4, 1993). Accordingly, this action was 
subject to review under that Executive Order by the Office of 
Information and Regulatory Affairs of the Office of Management and 
Budget (OMB).

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking'' (67 FR 53461, August 16, 2002), DOE published 
procedures and policies to ensure that the potential impacts of its 
draft rules on small entities are properly considered during the 
rulemaking process (68 FR 7990, February 19, 2003), and has made them 
available on the Office of General Counsel's Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.gc.doe.gov.
 DOE has reviewed today's proposed Guidelines under the 
provisions of the Regulatory Flexibility Act and the procedures and 
policies published on February 19, 2003. Although section 1605(b)(1) of 
EPACT mandates a public comment opportunity before Guidelines can be 
issued, the proposed guideline provisions are policy statements and 
procedural rules. They are not substantive regulatory requirements that 
would have an economic impact on small entities. On the basis of the 
foregoing, DOE certifies that the proposed Guidelines, if promulgated, 
would not have a significant economic impact on a substantial number of 
small entities. Accordingly, DOE has not prepared a regulatory 
flexibility analysis for this rulemaking.

C. Review Under the Paperwork Reduction Act

    The Energy Information Administration previously obtained Paperwork 
Reduction Act clearance by the Office of Management and Budget (OMB) 
for forms used in the current Voluntary Reporting of Greenhouse Gases 
program (OMB Control No. 1905-0194). EIA will prepare new forms and 
associated instructions to implement the revised guidelines for the 
program, and it will publish a separate notice in the Federal Register 
requesting public comment on the proposed collection of information in 
accordance with 44 U.S.C. 3506(c)(2)(A). After considering the public 
comments, EIA will submit the new forms, instructions, and related 
guidelines to OMB for approval pursuant to 44 U.S.C. 3507(a)(1).

D. Review Under the National Environmental Policy Act

    DOE has concluded that this proposed rule falls into a class of 
actions that would not individually or cumulatively have a significant 
impact on the human environment, as determined by DOE's regulations 
implementing the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). This action deals with the procedures and policies for 
entities that wish to voluntarily report their greenhouse gas emissions 
and their reduction and sequestration of such emissions to the Energy 
Information Administration. Because the proposed Guidelines relate to 
agency procedures and impose no substantive requirement on those 
entities wishing to report, the proposed Guidelines are covered under 
the Categorical Exclusion in paragraph A6 to subpart D, 10 CFR part 
1021. Accordingly, neither an environmental assessment nor an 
environmental impact statement is required.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism'' (64 FR 43255, August 4, 1999) 
imposes certain requirements on agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit

[[Page 68215]]

the policymaking discretion of the States and carefully assess the 
necessity for such actions. The Executive Order also requires agencies 
to have an accountable process to ensure meaningful and timely input by 
State and local officials in the development of regulatory policies 
that have federalism implications. On March 14, 2000, DOE published a 
statement of policy describing the intergovernmental consultation 
process it will follow in the development of such regulations (65 FR 
13735). DOE has examined today's proposed action and has determined 
that it does not preempt State law and does not have a substantial 
direct effect 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. No further 
action is required by Executive Order 13132.

F. Review Under the Treasury and General Government Appropriations Act, 
2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516, note) provides for agencies to review most disseminations 
of information to the public under guidelines established by each 
agency pursuant to general guidelines issued by OMB. OMB's guidelines 
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines 
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed 
today's notice under the OMB and DOE guidelines and has concluded that 
it is consistent with applicable policies in those guidelines.

G. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform'' (61 FR 4729, February 7, 1996), imposes on 
Federal agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of Executive 
Order 12988 specifically requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) Clearly specifies 
the preemptive effect, if any; (2) clearly specifies any effect on 
existing Federal law or regulation; (3) provides a clear legal standard 
for affected conduct while promoting simplification and burden 
reduction; (4) specifies the retroactive effect, if any; (5) adequately 
defines key terms; and (6) addresses other important issues affecting 
clarity and general draftsmanship under any guidelines issued by the 
Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that, to the extent 
permitted by law, this proposed rule meets the relevant standards of 
Executive Order 12988.

H. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to assess the effects of a Federal 
regulatory action on state, local, and tribal governments, and the 
private sector. The Department has determined that today's regulatory 
action does not impose a Federal mandate on state, local or tribal 
governments or on the private sector.

I. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
These proposed guidelines would not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

J. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001) requires Federal agencies to prepare and submit to 
the OMB, a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgated or is expected to lead to promulgation of 
a final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use. Today's regulatory 
action would not have a significant adverse effect on the supply, 
distribution, or use of energy and is therefore not a significant 
energy action. Accordingly, DOE has not prepared a Statement of Energy 
Effects.

List of Subjects in 10 CFR Part 300

    Administrative practice and procedure, Energy, Gases, Reporting and 
recordkeeping requirements.

    Issued in Washington, DC on November 20, 2003.
Robert G. Card,
Under Secretary for Energy, Science and Environment.
    For the reasons set forth in the preamble, DOE proposes to amend 
Chapter II of Title 10 of the Code of Federal Regulations by adding a 
new Subchapter B consisting of part 300 to read as follows.

SUBCHAPTER B--CLIMATE CHANGE

PART 300--VOLUNTARY GREENHOUSE GAS REPORTING PROGRAM: GENERAL 
GUIDELINES

Sec.
300.1 General.
300.2 Definitions.
300.3 Guidance for defining the reporting entity.
300.4 Selecting operational boundaries for reporting.
300.5 Submission of an entity statement.
300.6 Emissions inventories.
300.7 Net entity-wide 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.
Appendix A to Part 300--Voluntary Reporting of Greenhouse Gases 
Under 1605(b) of the Energy Policy Act of 1992: General Guidelines 
(October 1994).

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


Sec.  300.1  General.

    (a) Purpose. These Guidelines 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 purposes of the Guidelines 
are to establish the procedures and requirements for filing voluntary 
reports, and encourage corporations, government agencies, non-profit 
organizations, households and other private and public entities to 
submit annual reports of their net

[[Page 68216]]

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 to reducing their greenhouse 
gas emissions.
    (b) Registration and reporting options. An entity may choose to 
register or report emissions and emission reductions as follows.
    (1) Registration. An entity may have entity-wide emissions and 
emissions reductions registered by conforming to the requirements of 
this part, including the registration standards set forth in Sec. Sec.  
300.6 and 300.7 of this part.
    (2) Reporting. If an entity does not choose to report emissions in 
a manner that conforms to the registration requirements set forth in 
Sec. Sec.  300.6 and 300.7 of this part, then the entity may choose to 
report on any emissions or any emissions reductions by complying with 
the requirements of this part other than Sec. Sec.  300.6 and 300.7.
    (c) Forms. Annual reports of greenhouse gas emissions, emission 
reductions, and sequestration must be made on forms or software that 
are available from the Energy Information Administration of the 
Department of Energy (EIA).
    (d) Status of reports under previous General Guidelines. EIA will 
continue to maintain in its Voluntary Reporting of Greenhouse Gases 
database all reports received pursuant to DOE's October 1994 General 
Guidelines. For the convenience of the readers, those Guidelines are 
included as Appendix A to this part 300.


Sec.  300.2  Definitions.

    This section provides definitions for commonly used terms in the 
Guidelines.
    Avoided emissions means the emissions displaced by 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.
    Carbon stocks are the quantity of carbon stored in biological and 
physical systems including: Trees, plants and other terrestrial 
biosphere sinks, soils, oceans, sedimentary and geological sinks, and 
the atmosphere. [This term is to be further defined in DOE's Technical 
Guidelines.]
    De minimis emissions means emissions from one or more sources and 
of one or more gases that when summed are less than 3 percent of the 
total annual CO2 equivalent emissions of a reporting entity 
or less than 10,000 metric tons of CO2 equivalent, whichever 
is smaller.
    DOE or Department means the U.S. Department of Energy and, as 
appropriate in context, includes the Energy Information Administration.
    Direct emissions means greenhouse gas emissions resulting from 
stationary or mobile sources within the organizational boundary of an 
entity, including but not limited to emissions resulting from 
combustion of fossil fuels, process emissions, and fugitive emissions.
    Emissions means direct and specified indirect emissions of 
greenhouse gases from any anthropogenic (human induced) source.
    Emissions intensity means emissions per unit of output--usually the 
quantity of physical output, but sometimes a non-physical indicator of 
an entity's output activity.
    Fugitive emissions means 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 a pipe(s) or 
stack(s).
    Greenhouse gases means:
    (1) Carbon dioxide: CO2
    (2) Methane: CH4
    (3) Nitrous oxide: N2O
    (4) Hydrofluorocarbons: HFCs
    (5) Perfluorocarbons: PFCs
    (6) Sulfur Hexafluoride: SF6
    (7) Other gases or particles that have been demonstrated to have 
significant, quantifiable climate forcing effects when released to the 
atmosphere in significant quantities.
    Indirect emissions means greenhouse gas emissions from stationary 
or mobile sources outside the organizational boundary of an entity, 
including but not limited to the generation of electricity, steam and 
hot/chilled water, that are the result of an entity's energy use or 
other activities.
    Natural emissions means emissions that are naturally occurring and 
produced independent of human actions, including biogenic (produced by 
biological processes), geologic and potentially other non-anthropogenic 
sources.
    Net emissions or net entity-wide emissions means the total net 
annual contribution of the greenhouse gases specifically identified in 
section 300.6(f) to the atmosphere by an entity: total, entity-wide 
emissions, both direct and indirect, minus entity-wide sequestration.
    Net emission reductions or net entity-wide emission reductions 
means the sum of all annual changes in emissions, carbon stocks and 
avoided emissions of the greenhouse gases specifically identified in 
section 300.6(f), determined in conformance with Sec. Sec.  300.7 and 
300.8 of these Guidelines.
    Offsets means an emission reduction that meets the requirements of 
these guidelines, but is achieved by a party other than the entity that 
reports or registers the reduction.
    Sequestration means the removal of atmospheric carbon dioxide, 
either through biologic processes or physical processes, including 
capture, long-term separation, isolation, or removal of greenhouse 
gases from the atmosphere, such as through cropping practices, forest 
and forest products management or injection into an underground 
reservoir.
    Sink means an identifiable discrete physical process, occurring at 
a particular location, set of locations or area, by which carbon 
dioxide or some other greenhouse gas is sequestered.
    Source means an identifiable discrete physical process, occurring 
at a particular location, set of locations, or area, by which a 
greenhouse gas is emitted.
    Sub-entity 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 sub-entities, 
equal the entity's total emissions.


Sec.  300.3  Guidance for defining the reporting entity.

    A reporting entity must be composed of one or more legally distinct 
businesses, institutions, organizations or households, although 
reporters are strongly encouraged to define themselves at the highest 
level of aggregation appropriate. The legal basis for determining 
whether a reporting entity or its components are distinct can be 
derived from any Federal, State or local law or regulation governing 
the entity, including regulations applicable to corporations, 
partnerships, cooperatives, government agencies, non-profit 
organizations, households, or other entities. This legal basis must be 
described in the entity statement required by Sec.  300.5 of these 
Guidelines.


Sec.  300.4  Selecting operational boundaries for reporting.

    (a) An entity must determine, document, and maintain its 
operational boundary for accounting and reporting purposes. Because of 
the large number

[[Page 68217]]

of different operational structures, reporting entities are given some 
flexibility to set their operational boundaries in a manner that best 
suits their circumstances. However, all reports submitted should adhere 
to the following:
    (1) To the extent feasible, reporting entities should establish 
operational boundaries in a manner that is consistent with the entity's 
existing legal, managerial and financial structure; and
    (2) The reporting entity should establish operational boundaries 
that will result in accurate and comprehensive reports of its 
greenhouse gas emissions and sequestration.
    (b) In general, a reporting entity should select operational 
boundaries so as to encompass all emissions and sequestration 
associated with facilities and vehicles that are wholly owned and 
operated by the named and defined entity. Emissions from facilities or 
vehicles that are partially owned or leased, or not directly controlled 
or managed by the entity, 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.


Sec.  300.5  Submission of an entity statement.

    (a) Initial entity statement requirements. When an entity first 
reports under these Guidelines, the reporting entity must provide the 
following information in its entity statement:
    (1) The name to be used to identify the reporting entity. This 
should be the name commonly used to represent most of the activities 
being reported, as long as it is not also used to refer to substantial 
activities not covered by the entity's reports.
    (2) The names of any parent or holding companies the activities of 
which will not be covered comprehensively by the entity's reports;
    (3) The names of any large subsidiaries or organizational units 
that will be covered comprehensively by the entity's reports;
    (4) A description of the entity and its primary economic 
activities, such as electricity generation, product manufacturing, 
service provider, freight transport, or household operation;
    (5) A description of the types of operations, facilities, 
processes, vehicles and other emission sources or sinks covered in the 
entity's inventories;
    (6) The names of the entities that share the ownership or 
operational control of significant facilities or sources included in 
the reporting entity's report, and certify that, to the best of the 
preparer's knowledge, the direct greenhouse gas emissions and 
sequestrations in the entity's report are not included in the 1605(b) 
report of any of those other entities for the same calendar year;
    (7) Identification of the first year for which the entity will 
report emissions and the base year or base period from which emission 
reductions will be calculated.
    (b) Reasons for changing the scope of entity reports. From time to 
time, entities may choose to change the scope of activities included 
within the entity's reports or the level at which the entity wishes to 
report. An entity may also choose to change its operational boundaries, 
its base year (or base period) or, since many entities are dynamic by 
nature, other elements of its Entity Statement or reporting methods. 
For example, companies buy and sell business units, and equity share 
arrangements evolve. The dynamic nature of economic activity may pose a 
challenge for the objective of a comprehensive and accurate 
documentation of greenhouse gas emissions and sequestrations from year 
to year. 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 reporting entity's base year or base period. The 
Technical Guidelines under this part provide more specific guidance on 
how such changes should be reflected in entity reports and emission 
reduction calculations.
    (c) Documenting changes in amended entity statements. A reporter'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) Significant changes in the entity's organizational (geographic 
or operational) boundaries. In particular, the entity statement 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 
operations outside the U.S.;
    (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 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; 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.
    (2) If very substantial changes have occurred, then the reporting 
entity is required to submit a new Entity Statement that provides a 
complete and current overview of the entity's operations, facilities 
and emission sources.


Sec.  300.6  Emissions inventories.

    (a) General. The objective of the entity-wide reporting standard is 
to provide a comprehensive inventory of an entity's total net 
greenhouse gas emissions, including all six greenhouse gases listed in 
paragraph (f) of this section and all emissions and sequestration 
associated with changes in terrestrial carbon stocks. The reporting 
entity should report all of the covered greenhouse gas emissions from 
within the entity, using the methods specified in the Technical 
Guidelines (to be issued subsequently). Entity-wide reports are a 
prerequisite for the registration of emission reductions by entities 
with average annual emissions of more that 10,000 tons of 
CO2 equivalent. Entities that have average annual emissions 
of less than 10,000 tons of CO2 equivalent are eligible to 
register emission reductions associated with specific activities 
without also reporting an inventory of the total emissions.
    (b) Direct emissions inventories. (1) Direct greenhouse gas 
emissions that must be reported are those 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 should be reported (e.g., PFC emissions from aluminum 
production) along with fugitive emissions (e.g., leakage of greenhouse 
gases from equipment).
    (2) Entities should separately report emissions of greenhouses 
gases from combustion of biomass fuels or biomass-

[[Page 68218]]

based fuels (e.g., wood waste, landfill gas, ethanol from corn, 
charcoal). The Technical Guidelines (to be issued subsequently) will 
specify the applicable list of biomass fuels or biomass-based fuels.
    (c) 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, the consumption 
of purchased electricity, steam, and hot or chilled water must be 
included in a reporting entity's inventory as indirect emissions. To 
avoid double counting among entities, the reporting entity must report 
all indirect emissions (as defined in Sec.  300.2) separately from its 
direct emissions. Reporting entities should use the methods for 
quantifying indirect emissions specified in the Technical Guidelines.
    (2) Reporting entities may also choose to report other forms of 
indirect emissions, such as emissions associated with employee 
commuting, materials consumed or products produced, although emission 
reductions associated with such other indirect emissions are not 
eligible for registration. All such reports of other forms of indirect 
emissions must be clearly distinguished from reports of indirect 
emissions associated with purchased energy. The Technical Guidelines 
also address the reporting of these other types of indirect emissions.
    (d) Entity-level inventories of changes in terrestrial carbon 
stocks. Annual changes in 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 
inventory of its net emissions. In other words, activities that lead to 
the release of carbon to the atmosphere must be reported along with 
activities that sequester carbon. This is necessary to provide an 
accurate entity-wide estimate of net greenhouse gas emissions. Entities 
should use the methods for estimating changes in terrestrial carbon 
stocks specified in the Technical Guidelines.
    (e) Treatment of de minimis emissions and sequestration. Although 
the goal of the entity-wide reporting Guidelines is to provide an 
accurate and comprehensive estimate of total entity-wide emissions, 
there may be small emissions from certain sources that are unreasonably 
costly or difficult to quantify. A reporting entity may exclude 
particular sources of emissions or sequestration if the total 
quantities excluded represent less than 3 percent of the total annual 
CO2 equivalent emissions of the entity or less than 10,000 
metric tons of CO2 equivalent, whichever is less. The entity 
must identify the types of emissions excluded and provide a short 
justification as to why an estimate was not included in the entity's 
report.
    (f) Covered gases. (1) Entity-wide emissions inventories must 
include all emissions of the following greenhouse gases:

(i) CO2
(ii) CH4
(iii) N2O
(iv) HFCs
(v) PFCs
(vi) SF6

    (2) Entities may also choose to report other greenhouse gases, as 
defined in section 300.2, but such gases are to be reported separately 
and any emission reductions associated with such other gases are not 
eligible for registration.
    (g) 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 sub-entity 
summations of emissions and reductions from multiple sources shall be 
converted into carbon dioxide equivalent units using the global warming 
potentials for each gas. Entities should specify the units used (e.g., 
kilograms, or metric tons). Where necessary, reporting entities must 
use the standard conversion factors specified in the Technical 
Guidelines to convert existing data into the common units required in 
the entity-level report. Consumption of purchased electricity must be 
reported by region (from a list to be provided by DOE in the Technical 
Guidelines). Consumption of purchased steam or chilled/hot water must 
be reported according to the type of system and fuel used to generate 
it (from a list provided by DOE in the Technical Guidelines). Purchased 
energy will be converted to carbon dioxide equivalents using conversion 
factors in the Technical Guidelines.


Sec.  300.7  Net entity-wide emission reductions.

    (a) Assessing entity-wide emission reductions. (1) Entity-wide 
reports are a prerequisite for the registration of emission reductions 
by entities with average annual emissions of more that 10,000 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, avoided emissions and 
sequestration relative to the entity's established base year (or base 
period), plus any emission offsets. All changes in emissions, avoided 
emissions, and sequestration must be determined using methods that are 
consistent with the guidelines described in Sec.  300.8 of this part, 
and in compliance with all other relevant DOE guidelines.
    (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 Sec.  300.8 of this part, the reporting entity may 
exclude them from its estimate of net entity-wide emission reductions. 
The reporting entity must describe the sources excluded for this reason 
from the entity's assessment of its net emission reductions, the 
reasons why it was not practicable to assess the changes that had 
occurred, and the approximate quantity of emissions or sequestration 
not assessed.
    (3) A reporting entity should also exclude from the entity-wide 
assessment of changes in emissions, avoided emissions and sequestration 
any emissions or sequestration that have been excluded from the 
entity's inventory.
    (b) Assessing the emission reductions of entities with small 
emissions. Entities with average annual emissions of less than 10,000 
tons of CO2-equivalent emissions are not required to inventory their 
total emissions or assess all changes in their emissions, avoided 
emissions and sequestration in order to register their reductions. They 
may register the emission reductions that have occurred since 2002 and 
that are associated with certain activities, as long as they perform a 
complete assessment of the annual emissions and sequestration 
associated with all of the activities of the same type, determine the 
changes in the emissions, avoided emissions or sequestration associated 
with these activities, and certify that the reductions reported were 
not caused by actions likely to cause increases in emissions elsewhere 
within the entity's operations. For example, a farmer may report 
emission reductions associated with tree plantings on a single wood 
lot, but must assess and report the net sequestration resulting from 
the farmer's management of all woodlots within the entity's boundaries.
    (c) Net emission reductions achieved by third parties (offsets). 
Net emission reductions achieved by third parties may be included in an 
entity-wide assessment of emission reductions as long as:
    (1) The emission reductions reported were calculated using the same 
method(s) that would have been applicable if the third party that 
achieved the emission reduction had chosen to report it directly to 
DOE.

[[Page 68219]]

    (2) All of the reporting entities or other parties involved certify 
to DOE that they have agreed that the reporting entity should be 
recognized as the entity responsible for the reduction.
    (d) Adjusting for year-to-year increases in net emissions. Net 
annual emission reductions are calculated normally relative to an 
entity's base year (or base period). However, if the entity has 
experienced a net increase (relative to the base year) in emissions for 
one or more intervening years, these increases must be subtracted from 
net emission reductions reported in future years.


Sec.  300.8  Calculating emission reductions.

    (a) Establishing base year (or base period) emissions. In general, 
base year or base period emissions are those that occurred over the 
full year (or average annual emissions over the full multi-year period) 
immediately preceding the first year of calculated emission reductions. 
Base year or base period emissions may represent the whole entity, or 
specific sub-entities, but must be defined so as to correspond to the 
scope of the chosen emission reduction calculation. To ensure that the 
summation of entity annual reports accurately represents net, multi-
year emission reductions, a specific base year or base period may be 
used to determine emission reductions in a given future year only if 
the entity has submitted qualified reports for each intervening year.
    (b) Calculation methods. Entities must calculate any change in 
emissions, avoided emissions or sequestration using one or more of the 
methods described in this section. All changes must be calculated 
relative to a base year or base period established by the entity, 
unless the change results from an offset (see subsection 300.7(c)). In 
general, entities are encouraged to use changes in net emissions 
intensity as the primary basis for calculating changes in net, entity-
wide emissions.
    (1) Changes in emissions intensity. A reporting entity may use 
reductions in the rate of emissions per unit of output (emissions 
intensity) as a basis for determining emission reductions as long as 
the reporting entity demonstrates in its report that the measure(s) of 
output used in the emissions intensity metric is a reasonable indicator 
of the physical output or economic value produced by the activity 
associated with these emissions, and that acquisitions, divestures or 
changes in products have not contributed significantly to changes in 
emissions intensity.
    (2) Changes in absolute emissions. A reporting entity may use 
changes in the absolute (actual) emissions (direct or indirect) as a 
basis for determining net emission reductions, as long as the entity 
demonstrates in its report that any reductions derived from such 
changes were not achieved as a result of reductions in U.S. output, or 
major shifts in the types of products or services produced.
    (3) Changes in carbon storage (for actions within entity 
boundaries). A reporting entity may use changes in carbon storage as a 
basis for determining net emission reductions as long as the reporting 
entity uses estimation and measurement methods that comply with DOE 
Technical Guidelines, and has included an assessment of the net changes 
in all sinks included in its inventory.
    (4) Changes in avoided emissions (for actions within entity 
boundaries). A reporting entity may use changes in the avoided 
emissions 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 DOE 
Technical Guidelines, and
    (ii) the reporting entity certifies that any increased sales were 
not attributable to the acquisition of a generating facility that had 
been previously operated, unless the entity utilized base year 
generation values derived from records of the facility's operation 
prior to its acquisition.
    (5) Project-based emission reductions (for actions within entity 
boundaries). Emission reductions may be determined based on an estimate 
of the effects on emissions of a specific action, as long as the 
reporting 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 DOE Technical 
Guidelines. Entity-wide reporters should use this project-based 
approach only if it is not possible to measure accurately emission 
changes by using one of the methods identified in paragraphs (a)(1) 
through (a)(4) of this section.
    (c) 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.
    (d) Emission reductions associated with plant closings, voluntary 
actions and government requirements. Each report of emission reductions 
shall indicate whether the reported emission reductions were the 
result, in whole or in part, of plant closings, voluntary actions, or 
government requirements.
    (1) If emission reductions were associated, in whole or part, with 
plant closings, the report should include an explanation of how such 
emission reductions did not result from a decline in the U.S. output of 
the reporting entity.
    (2) If the reductions were associated, in whole or part, with 
government requirements, the report should identify the government 
requirement involved and describe the type of effect these requirements 
had on the reported emission reductions.
    (e) Determining the entity responsible for emission reductions. The 
entity presumed to be responsible for emission reduction, avoided 
emission or sequestered carbon is the legal owner of the facility, land 
or vehicle which generated the affected emissions, generated the energy 
that was sold so as to avoid other emissions, or was the place where 
the sequestration action occurred. If ownership is shared, reporting of 
the associated emission reductions should be determined by agreement 
between the entities involved in order to avoid double-counting, and 
this agreement must be reflected in the entity statements filed and in 
any report of emission reductions. DOE will presume that an entity is 
not responsible for any emission reductions associated with a facility, 
property or vehicle excluded from its entity statement.


Sec.  300.9  Reporting and recordkeeping requirements.

    (a) Starting to report under the revised Guidelines. (1) Entities 
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 revised 
Guidelines, all reports must conform to the measurement methods 
established by the Technical Guidelines. This requirement applies to 
entities that report to the revised Voluntary Reporting of Greenhouse 
Gases Program registry for the first time as well as those entities 
that have previously submitted emissions reports pursuant to section 
1605 (b) of the Energy Policy Act of 1992.

[[Page 68220]]

    (2) Entities may submit initial reports or corrected reports for 
previous calendar years at any time. For example, an entity may choose 
to begin reporting in 2005 and may choose, at that time, to submit 
reports on prior year emissions back to 2002. Also, if a change in the 
emissions calculation method is made for 2005, an entity may submit 
revised estimates for its previous reporting years to ensure that a 
consistent method is used across the whole time-series. Entities may 
also submit revised reports to reflect agreements with other entities 
regarding the appropriate entity to designate as the entity responsible 
for certain registered emission reductions.
    (b) Continuing to report. Reporting entities are strongly 
encouraged to report emissions on an annual basis, starting from the 
first year they submit a report under these revised Guidelines. Annual 
entity reporting is necessary to ensure that calculated reductions have 
been sustained over time. If a reporting entity chooses not to submit a 
report in any given year, the next report made should include reports 
for intervening years, or the reporting entity must establish a new 
base year from which to calculate all future emission reductions. 
Entities that wish to sustain recognition for previously registered 
emission reductions resulting from sequestration must continue to 
report annually.
    (c) Definition and deadline for annual reports. Entities should 
report emissions on an annual basis, from January 1 to December 31, 
although DOE may grant exceptions to these dates. To be included in the 
earliest possible DOE annual report of greenhouse gas emissions 
reported under section 1605(b), entity reports must be submitted to DOE 
no later than July 1 for emissions during the previous calendar year.
    (d) Recordkeeping. Entities must maintain adequate records for at 
least three years to enable independent verification of all information 
reported. Such records must include:
    (1) A full description of the process and methods used to gather 
emissions data;
    (2) A full description of the process and methods used to calculate 
emission reductions;
    (3) The primary data upon which the data included in the any report 
to DOE was based; and
    (4) A full description of any internal quality control or other 
verification measures taken to ensure that the data reported was in 
compliance with all relevant DOE Guidelines and other measurement 
protocols.


Sec.  300.10  Certification of reports.

    (a) The chief executive officer, agency or household head, or 
person responsible for the reporting entity's compliance with 
environmental regulations must, for each report of such entity, certify 
that:
    (1) The information provided to DOE is complete and accurate, in 
accordance with DOE's revised Guidelines, and is consistent with all 
prior year reports submitted by that entity (unless otherwise 
indicated); and
    (2) Adequate records will be maintained for at least 3 years to 
enable independent verification of the information reported.
    (b) If the report has been independently verified in accordance 
with DOE's Guidelines, the certification of the report by the entity 
reporting should so indicate.


Sec.  300.11  Independent verification.

    (a) Reporting entities are encouraged to have their annual reports 
verified by independent and qualified auditors.
    (1) ``Independent'', as used in this paragraph (a), means that the 
verifiers must not be owned in whole or part by the reporting entity, 
nor should they 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.
    (2) ``Qualified'', as used in this paragraph (a), means that 
verifiers must be certified by independent and nationally-recognized 
certification programs for the types of professionals needed to 
determine compliance with DOE's reporting Guidelines, such as the 
American Institute of Certified Public Accountants, the American 
National Standards Institute and Registrar Accreditation Board's (ANSI-
RAB's) National Accreditation Program, or the Board of Environmental, 
Health, and Safety Auditor Certification (BEAC).
    (b) The independent verifier must provide a written description of 
the relevant qualifications and professional certifications of the 
persons that performed the independent verification and must certify 
that:
    (1) The information provided to DOE is complete and accurate, in 
accordance with DOE's revised Guidelines, and is consistent with all 
prior year reports submitted by that entity (unless otherwise 
indicated); and
    (2) Adequate records have been maintained by the reporter to enable 
further independent verification in the future.


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

    (a) Acceptance of reports. Upon receipt, DOE will review all 
reports to ensure they are consistent with the revised Guidelines. If 
DOE determines the report follows the definitional, measurement, 
calculation and certification Guidelines, the report will be accepted.
    (b) Registration of emission reductions. DOE will review accepted 
reports to determine any eligible emission reductions that were 
calculated using the reporting entities' base year emissions (no 
earlier than 2002) or the average annual emissions of its base period ( 
a period of up to four sequential years ending no earlier than 2002), 
and to ensure that the reports meet other relevant DOE requirements. 
DOE will also review its records to verify that the entity has 
submitted accepted annual reports for each year between the 
establishment of its base year or base period and the year covered by 
the current report. DOE will notify entities that the reductions that 
meet these requirements have been registered.
    (c) EIA database and summary reports. The Administrator of the 
Energy Information Administration will establish a publicly accessible 
database composed of all reports that meet the definitional, 
measurement, calculation and certification requirements of these 
Guidelines. A portion of the database will provide summary information 
on the emissions and registered emission reductions of each reporting 
entity.

Appendix A to Part 300--Voluntary Reporting of Greenhouse Gases Under 
Section 1605(b) of the Energy Policy Act of 1992: General Guidelines 
(October 1994)

Voluntary Reporting and You

    This program was designed to help you measure and record the 
actions you take to reduce greenhouse gas emissions or to increase 
carbon storage in soil or plants. The voluntary reporting program 
provides an opportunity for you to gain recognition for the good 
effects of your actions--recognition from your customers, your 
shareholders, public officials, and the Federal government. 
Reporting the results of your actions adds to the public groundswell 
of efforts to deal with the threat of climate change. Reporting can 
show that you are part of various initiatives under the President's 
Climate Change Action Plan. Your reports can also record a baseline 
from which to measure your future actions. Finally, your reports, 
along with others, can contribute to the growing body of information 
on cost-effective actions for controlling greenhouse gases.
    We've designed this simple, flexible program to encourage you to 
accurately record your achievements. The program allows you to 
define activities you choose to

[[Page 68221]]

report and to determine how you will estimate the effects of those 
activities on greenhouse gas emissions and carbon sequestration.
    We recognize that you must balance your efforts to ensure the 
accuracy of reported data with your goals of keeping costs 
reasonable in generating the reports.
    We are optimistic that the response to this program will show 
that voluntary programs can do the job. We have been impressed by 
the level of commitment to the President's initiatives on climate 
change. This reporting program provides opportunities to report your 
achievements and to track your progress as you use your ingenuity 
and creativity in responding to the challenge of climate change.

General Guidelines

GG-1 How Are These Guidelines and Supporting Documents Organized?
GG-2 Why Report Under This Voluntary Reporting Program?
GG-3 May I Report and What Should I Report?
GG-4 What Is Involved in Reporting Emissions?
    GG-4.1 Gases and Sources.
    GG-4.2 Use of Existing Information.
    GG-4.3 Scope of Emissions Reporting.
GG-5 How Should I Analyze Projects I Wish to Report?
    GG-5.1 What Should the Project be Compared To?
    GG-5.2 What Effects Did the Project Have?
    GG-5.3 How Do I Estimate Project Accomplishments?
    GG-5.4 What If Two or More Organizations Wish to Report the Same 
Project?
    GG-5.5 May I Report Through My Trade Associations or Other Third 
Parties?
    GG-5.6 What Else Will I Be Asked to Report?
    GG-5.7 May I Report International Projects?
    GG-5.8 May I Report Prospective Emissions Reductions?
    GG-5.9 How Far Back May I Report Projects?
    GG-5.10 Must I Take into Account the Different Effects of 
Different Greenhouse Gases?
    GG-5.11 Is It Necessary to Report Emissions Reductions and 
Carbon Sequestration Every Year?
    GG-5.12 May I Amend My Previous Years' Reports?
GG-6 What Are the Minimum Reporting Requirements?
GG-7 Can My Data Be Kept Confidential?
GG-8 What Certification Is Required?
GG-9 What Should I Do Next?

Figures

GG-1 Careful Project Analysis Requires that you Consider Several 
Interrelated Elements
GG-2 Standard Projects Utilize Physical and Default Data
GG-3 Reporter-Designed Projects Utilize Your Own Measured or 
Engineering Data Along with Physical and Default Data

Case Studies

1. Rarotonga Coconut Cream, Inc. (industrial cogeneration)
    Project Description and Emissions Reporting
    Reference Case
    Project Effects
    Estimation Methods
2. Rural-Urban Office Managers, Inc. (energy efficiency in 
buildings)
    Project Description and Emissions Reporting
    Reference Case
    Project Effects
    Estimation Methods
3. Illinois-Ohio Unlimited (new solar-powered electricity 
generation)
    Project Description and Emissions Reporting
    Reference Case
    Project Effects
    Estimation Methods
4. Black Forest Cake, Inc. (long-term project reporting)

General Guidelines

    Because of concerns with the growing threat of global climate 
change from increasing emissions of greenhouse gases, Congress 
authorized a voluntary program for the public to report achievements 
in reducing those gases. This document offers guidance on recording 
historic and current greenhouse gas emissions, emissions reductions, 
and carbon sequestration. Under the Energy Policy Act (EPAct) of 
1992 Section 1605(b) program, reporters will have the opportunity to 
highlight specific achievements.
    If you have taken actions to lessen the greenhouse gas effect, 
either by decreasing greenhouse gas emissions or by sequestering 
carbon, the Department of Energy (DOE) encourages you to report your 
achievements under this program. The program has two related, but 
distinct parts. First, the program offers you an opportunity to 
report your annual emissions of greenhouse gases. Second, the 
program records your specific projects to reduce greenhouse gas 
emissions and increase carbon sequestration. Although participants 
in the program are strongly encouraged to submit reports on both, 
reports on either annual emissions or emissions reductions and 
carbon sequestration projects will be accepted.
    These guidelines and the supporting technical documents outline 
the rationale for the program and approaches to analyzing emissions 
and emissions reduction projects. Your annual emissions and 
emissions reductions achievements will be reported on forms that are 
available through the Energy Information Administration (EIA) of the 
Department of Energy, 1000 Independence Avenue, SW., Washington, DC 
20585.

GG-1 How Are These Guidelines and Supporting Documents Organized?

    In these pages, you will find answers to your questions about 
who may report, what is involved in reporting, and how to develop a 
credible project analysis to help you accurately report your 
achievements. The General Guidelines (GG) illustrate the process for 
analyzing projects using three hypothetical examples (an industrial 
cogeneration project, an energy efficiency program, and new 
electricity generating capacity).
    You will also find guidance on such issues as joint reporting 
(if two or more persons or organizations are responsible for 
achievements), third-party reporting (through a trade association, 
for example), international projects, confidentiality, 
certification, and other elements of the reporting process.
    For more specific guidance, you may consult one or more of the 
supporting documents that discuss sector-specific issues and 
analytic approaches. The supporting documents, organized in two 
volumes, contain limited examples of project analysis for the 
relevant sectors. Supporting documents have been developed as 
follows:

[sbull] Volume I
    --Electricity Supply Sector (Part 1)
    --Residential and Commercial Buildings Sector (Part 2)
    --Industrial Sector (Part 3)
[sbull] Volume II

    --Transportation Sector (Part 4)
    --Forestry Sector (Part 5)
    --Agricultural Sector (Part 6).

    Each volume includes appendixes that provide conversion tables 
and default emissions factors (for various fuels and for electricity 
on a state-by-state basis). You can use these tables and factors for 
almost any report you submit. The final appendix in each volume 
presents a list of greenhouse gases for which the Intergovernmental 
Panel on Climate Change has developed Global Warming Potentials (an 
index of the relative effects on climate of different gases).

GG-2 Why Report Under This Voluntary Reporting Program?

    If you are undertaking activities to reduce greenhouse gas 
emissions or to sequester carbon, reporting under this program can 
be valuable to you and to others. It can be valuable to you because 
it provides a way to present information about your greenhouse gas-
related activities to your customers or constituents who are 
concerned about the issue of global climate change. It can be 
valuable to others, including the Federal government (to recognize 
your achievements under various initiatives), decisionmakers and 
legislative bodies (to inform the public debate on future greenhouse 
gas policies), and other individuals or organizations (to learn from 
each other).
    You may wish to report under this program for at least three 
reasons:
    [sbull] To Record Emissions and Achievements. You may wish to 
formally record, in a national database, your greenhouse gas 
emissions and the results of your activities that reduce or avoid 
these emissions. Reporting may be part of your participation in 
programs that recognize your contributions to achieving greenhouse 
gas emissions goals. These programs include national initiatives 
such as the Climate Change Action Plan and programs such as Climate 
Challenge, ClimateWise, and Motor Challenge. However, reporting 
under this voluntary reporting program is not limited to 
participants in these programs; you may wish to record the emissions 
reductions benefits from activities pursued independently of formal 
recognition programs.

[[Page 68222]]

    [sbull] To Inform the Public Debate. You may wish to provide 
data which will contribute to more informed public debate on 
national policy on greenhouse gas reductions. Although a database 
built upon voluntary reports cannot provide a complete picture of 
national or sectoral emissions, it could provide credible 
information on emissions reductions and carbon sequestration 
projects to evaluate their potential for broader application.
    [sbull] To Participate in Educational Exchanges. Data reported 
under the voluntary reporting program may provide useful information 
to others seeking ways to reduce their own emissions. New, 
innovative, and more economical means of reducing or avoiding emis-
sions may be more widely deployed as better information becomes 
available.

GG-3 May I Report and What Should I Report?

    You may report under this program if you initiate, control, or 
in some other way participate in activities that (1) contribute to 
greenhouse gas emissions, (2) result in reducing greenhouse gas 
emissions, or (3) sequester carbon. The activities may be part of 
your regular operations, pilot studies, prototype projects, or 
demonstration projects. They may take place in your community, in 
your workplace, at a location controlled by a third party, or at a 
foreign location. You must be a legal U.S. entity, that is, any U.S. 
citizen or resident alien; any company, organization, or group 
incorporated under or recognized by U.S. law; or any U.S. Federal, 
state, or local government entity.
    DOE encourages you to submit as comprehensive a report as you 
can. Elements of a comprehensive report include information about 
both your emissions levels and your emissions reduction projects. 
Emissions information could include data on the entire organization 
and all its greenhouse gas activities, including historic baseline 
emissions data for 1987 through 1990, and annual emissions for 
subsequent years. Comprehensive information about emissions 
reduction projects could include both emissions reductions and 
carbon sequestration projects, emissions factors used to determine 
reductions, assumptions about the project, and data sources. The 
extent to which you provide information for each of these elements 
is determined by your assessment of what is necessary for others to 
clearly understand your project and its effects. Users of the 
database will be able to gauge the comprehensiveness of your report 
relative to these elements.
    You may report both direct and indirect emissions. As the name 
implies, direct emissions result directly from fuel combustion or 
other processes that release greenhouse gases on-site.
    You produce emissions indirectly when your activities cause 
emissions to be generated elsewhere. For example, a manufacturer 
would report as direct emissions the carbon dioxide emitted from the 
stack of its assembly plant. The same manufacturer could report 
indirect emissions from the electricity used to light that assembly 
plant, since the electricity use causes emissions to be generated by 
an electric utility.

GG-4 What Is Involved in Reporting Emissions?

    Section 1605(b) addresses the reporting of annual emissions as 
well as emissions reductions and carbon sequestration. You are 
strongly encouraged, but are not required, to report your greenhouse 
gas emissions (1) for the baseline period of 1987 to 1990 and (2) 
for subsequent calendar years on an annual basis. You may wish to 
report this data for all or as much of your organization as 
possible, particularly if it would be important to the users of your 
reports.

GG-4.1 Gases and Sources

    These guidelines initially provide for reporting four types of 
greenhouse gases: carbon dioxide, methane, nitrous oxide, and 
halogenated substances. These are listed below, along with the major 
activities associated with emissions of these gases. For each gas 
listed in your emissions report, you should indicate your total 
emissions; for example, if you report two gases, carbon dioxide and 
methane, you should report total emissions numbers for both gases.

------------------------------------------------------------------------
             Greenhouse gases                    Related activities
------------------------------------------------------------------------
Carbon dioxide (CO2)......................  Fossil energy combustion,
                                             electricity generation and
                                             use, industrial processes,
                                             forestry and agriculture.
Methane (CH4).............................  Landfill operation, coal
                                             mining, oil and gas
                                             systems, stationary
                                             combustion, animal
                                             production.
Nitrous oxide (N2O).......................  Stationary combustion,
                                             adipic acid production,
                                             forestry and agriculture.
Halogenated substances (for example, CFCs,  Chemical manufacture, use in
 HCFCs, PFCs).                               industrial processes.
------------------------------------------------------------------------

    The guidelines and supporting documents do not generally discuss 
other radiatively enhancing gases. However, after the second 
reporting cycle (that is, after the 1996 cycle), you will be able to 
report other radiatively enhancing gases, including nitrogen oxides 
(NOX), nonmethane volatile organic compounds (NMVOCs), 
and carbon monoxide (CO). In some cases, the supporting documents 
contain data such as emissions factors for some of these gases. 
However, in general, you will have to determine how to evaluate your 
emissions of these gases. Your report must meet the minimum 
reporting requirements of the program, as described in Section GG-6.

GG-4.2 Use of Existing Information

    Many organizations keep accurate data on projects that involve 
energy efficiency, fuel switching, conservation, pollution 
prevention, waste minimization, and/or carbon sequestration. If you 
keep related data for other purposes, reporting greenhouse gas 
emissions effects under this program will be especially simple and 
straightforward.
    Many potential reporters under EPAct 1605(b) already gather and 
report emissions information. If you already report similar 
information (for example, to comply with the Clean Air Act 
Amendments or under another air quality program) or can easily 
derive it (for example, from data you submit to regulatory agencies, 
from smokestack monitoring technologies, or fuel use data kept for 
internal purposes), you are encouraged to use such information to 
the extent practical in reporting emissions and emissions reductions 
under this program. However, you must report the information in a 
manner that is consistent with these General Guidelines.

GG-4.3 Scope of Emissions Reporting

    You should report on the most comprehensive basis possible to 
broaden the usefulness of your emissions reports. However, you may 
define the scope of your emissions reports. In most cases, the needs 
of your potential audience will dictate the boundaries you draw. If 
you are able to report emissions for your entire organization, you 
should consider providing a comprehensive accounting so that your 
audience can gain a clear understanding of your overall activities. 
However, reporting total emissions for a single plant or 
establishment may be more consistent with other elements of your 
report and may be based on more precise or more readily available 
data.
    Reporting emissions for your entire organization will show the 
most complete picture of your activities. Entity-level emissions 
reports can also provide all the data you need to submit reports on 
emissions reductions at the entity level or can increase the 
credibility of reports of emissions reductions at an individual 
project level.
    You do not need to report total organization emissions in order 
to report individual emissions reductions and carbon sequestration 
projects. In fact, some reporters may not be able to report their 
organization's or unit's total emissions, because information needed 
for the baseline years may not be available, or because it is not 
feasible to estimate their organization's or unit's total emissions 
even for the current year. Remember, however, that most users of the 
database will find your reported estimates of emissions reductions 
more credible if they are accompanied by records of your 
organization's total emissions for the baseline years 1987 to 1990 
and subsequent years.

GG-5 How Should I Analyze Projects I Wish To Report?

    Accurate and credible reporting under this program requires 
sound project analysis. Rigid rules do not exist for such an 
analysis, and you may define the emissions reductions and carbon 
sequestration projects that you report. Your project may consist of 
all emission-producing activities for your organization; several 
activities, perhaps as parts of an energy efficiency program; or 
only one activity, undertaken for its projected cost savings (such 
as a relighting project) or as a pilot project (for example, an 
experimental industrial process change). Given the broad range of 
possible types of projects, it is impossible to establish guidance 
that

[[Page 68223]]

provides specific rules and appropriate methods for every type of 
project. The appropriate procedure for project analysis depends on 
how clearly you can identify the effects of the project, how 
credibly you can define a basis for comparing greenhouse gas 
emissions or carbon sequestration with and without the project, and 
how well you can measure or estimate the effects of your project.
    While the guidelines provide you with as much flexibility as 
possible, every report must--
    [sbull] Establish the reference case to use as a basis for 
comparison with the project;
    [sbull] Identify the project's effects; and
    [sbull] Estimate emissions for the reference case and the 
project.
    Figure GG-1 depicts the overall process of project analysis. 
Each of these steps is discussed below and in more detail for each 
sector in the supporting documents. Note that these three elements 
depend on each other. For example, your choice of a reference case 
will depend upon both the scope of your project's effects and the 
data you use to measure or estimate emissions.
[GRAPHIC] [TIFF OMITTED] TP05DE03.001

    In determining the extent of your analysis and reporting effort, 
you need to match your effort to your purpose for reporting. If you 
wish to establish a clear record of emissions and emissions 
reductions, you should perform extensive analysis and provide for 
retention of sufficient records to support your report. In any case, 
you will need to certify the accuracy of the information provided in 
your report.
    These considerations and others in the project analysis process 
are illustrated in these General Guidelines with three hypothetical 
case studies: An industrial cogeneration project, an energy-
efficiency project in a large office building complex, and the 
purchase of new solar-powered electricity generating equipment. The 
case studies are intended to be illustrative and by no means address 
all of the information that may be reported. A basic description of 
the facts involved in each case follows. These cases will be more 
fully developed as the discussion of the steps in project analysis 
proceeds.
    These cases are intended to illustrate the range of detail and 
expense that might be entailed in developing reports of emissions 
and emissions reductions. The first case involves no emissions 
reporting and very simple emissions reductions analysis. The second 
case involves reporting emissions levels for recent years only and 
moderately detailed emissions reductions analysis. The third example 
illustrates the most comprehensive report, including emissions 
reporting for the baseline years 1987-1990 and detailed project 
analysis. Note that in each case the level of effort and detail 
reflected in the analysis and report is determined by the reporter's 
expected audience.

Case 1: Rarotonga Coconut Cream, Inc.--Project Description and 
Emissions Reporting

    Note: This example illustrates only one approach to analyzing a 
project; your analysis, methods, and calculations will vary 
depending on your particular circumstances, the geographic location 
of the project, and other factors.


[[Page 68224]]


    Rarotonga Coconut Cream, Inc. (RCCI) is a small food processing 
plant in Hawaii. In the past, RCCI purchased its electricity from 
the local electric utility and produced processing steam from a 
residual oil-fired boiler. While RCCI's production and energy use 
have been stable for the past seven years, its energy bills have 
been growing because of increased electricity rates and oil delivery 
charges to the company's remote location. Company managers 
anticipate continued increases in electricity costs as the 
distribution lines have to be replaced and upgraded over the next 
five years.
    RCCI realized it could cut its energy costs significantly if it 
installed a cogeneration system to produce its process steam and 
electricity in a single cogeneration plant fueled by distillate fuel 
oil. Although the distillate is a higher grade fuel than that 
currently used, its increased cost is more than offset by the 
economies realized from the combination of the higher efficiency 
cogeneration unit and the installation of increased storage 
capacity, allowing the firm to accept larger, less frequent 
deliveries. Furthermore, distillate is a cleaner burning fuel oil 
than residual with lower carbon dioxide emissions per equivalent 
energy input along with enhanced handling properties. Addition of a 
backup generator would allow the company to disconnect from the 
utility transmission and distribution system.
    One of RCCI's customers, a grocery wholesaler who was visiting 
the Rarotonga plant, commented that her company was participating in 
a Federally sponsored energy-efficiency program and reporting the 
company's contribution to greenhouse gas emissions reductions 
through the EPAct Section 1605(b) voluntary reporting program. While 
RCCI was undertaking its cogeneration project primarily for 
financial reasons, it was also aware that the project had some 
beneficial environmental effects, including the reduction of carbon 
dioxide emissions associated with switching fossil fuel use and 
electricity production. RCCI decided that, in the interest of 
sharing its experience with the cogeneration project, the company 
would report the results to the DOE program.
    The first decision RCCI had to make was whether to report its 
annual emissions of greenhouse gases. As a small business whose 
primary purpose for participation in the voluntary reporting program 
was to publicize its experience with using a cogeneration system in 
a remote location, RCCI was interested in containing its costs of 
reporting as much as possible. A full entity-wide emissions report 
would need to account for direct emissions from its oil burner, 
agricultural operations, and transportation fleet, and indirect 
emissions from its electricity use. Estimation of emissions from 
these sources back to 1987 could be costly and time-consuming. RCCI 
managers decided instead to focus their limited resources solely on 
an evaluation of emissions reductions associated with their 
cogeneration project.

Case 2: Rural-Urban Office Managers, Inc.--Project Description and 
Emissions Reporting

    Note: This example illustrates only one approach to analyzing a 
project; your analysis, methods, and calculations will vary 
depending on your particular circumstances, the geographic location 
of the project, and other factors.

    In the late 1970s, Rural Office Managers built a complex of 
offices just outside the city of Metropolis. By the mid-1990s, the 
city had expanded, and the offices, originally designed for low-
density occupation, were now experiencing higher density occupation.
    In response to the change in its physical surroundings, the 
company reincorporated as Rural-Urban Office Managers, Inc. (RUOMI). 
Company officials also realized they needed to update their 
facilities, particularly their heating, ventilating, and air 
conditioning (HVAC), system and their lighting system to accommodate 
the change in use. Coincidentally, the energy planner for Metropolis 
contacted RUOMI to explain that the city had enrolled in a new state 
initiative called Energy Efficient Cities (EEC) that challenges 
cities to reduce commercial-sector energy consumption by five 
percent. RUOMI agreed to participate in EEC.
    While the emphasis of the EEC program was on reducing energy 
use, participants were also encouraged to report the indirect effect 
that their energy conservation activities had on greenhouse gas 
emissions, that is, the reduction in greenhouse gas emissions at the 
generating plant resulting from reduced electricity use at RUOMI's 
offices. When RUOMI managers explored the DOE voluntary greenhouse 
gas reporting program, they discovered guidance on how to measure 
both energy savings and associated greenhouse gas emissions. 
Therefore, as their contractor designed the HVAC and lighting 
project, RUOMI made sure that the contractor collected all the data 
RUOMI needed to submit a report.
    RUOMI had not preserved a complete set of its energy bills from 
the late 1980s. Although this information could have been recovered 
from the Metropolis energy utility, RUOMI managers decided not to 
attempt to report the company's historic baseline, entity-wide emis-
sions because the generating mix for Metropolis' electricity supply 
had changed dramatically since the end of the last decade. However, 
using the data provided in the DOE guidelines and supporting 
documents, they were able to derive the direct emissions from 
natural gas combustion and the indirect emissions associated with 
electricity use, for the two calendar years just prior to the 
commencement of their project. RUOMI reported emissions for those 
two years and for each year thereafter.

Case 3: Illinois-Ohio Unlimited--Project Description and Emissions 
Reporting

    Note: This example illustrates only one approach to analyzing a 
project; your analysis, methods, and calculations will vary 
depending on your particular circumstances, the geographic location 
of the project, and other factors.

    Illinois-Ohio Unlimited (IOU) is an investor-owned utility 
operating and serving customers in three midwestern states. During a 
recent integrated resources planning (IRP) effort, it recognized an 
emerging inability to meet a rising midday peak-load demand, even 
after pursuing an aggressive peak-shaving, demand-side management 
program. The IRP identified two alternative responses: purchase 
additional power from the Indiana Plains Project (IPP), an 
independent power producer that had excess capacity in its natural 
gas combined cycle units, or install a large array of photovoltaic 
cells (PVCs) in southern Illinois and Indiana. PVC electricity 
production was expected to closely match peak-load demands. While 
the price of PVCs had decreased dramatically as a result of 
successful Federal and private research, the second option was still 
more expensive than the first. However, the public utility commis-
sions (PUCs) in all three of the states in which IOU reported 
encouraged the utility to install the PVCs. The PUCs reasoned that 
soon PVCs would be economically competitive and this was IOU's 
opportunity to gain experience with the technology.
    Both IOU and its PUCs were concerned, however, that the utility 
might be inadvertently penalized if subsequent Federal regulations 
should mandate reductions of emissions of greenhouse gases but not 
recognize IOU's early reduction effort. IOU decided to report the 
PVC projects through DOE's voluntary greenhouse gas reporting 
program. Because IOU knew that use of its information in connection 
with the requirements of future policy debates would demand complete 
and accurate information, it kept careful records, and in each case 
followed the most rigorous requirements of the voluntary reporting 
guidelines.
    As part of its reporting process, IOU reported its entity-wide 
greenhouse gas emissions for each of the four baseline years, 1987 
to 1990, and for every subsequent calendar year. These reports 
included estimates of emissions from generating processes, IOU fleet 
vehicle emissions, and office and building operations.

GG-5.1 What Should the Project Be Compared To?

    A crucial consideration in evaluating your project's 
accomplishments is how well you can establish a reference case--that 
is, an emissions level against which to measure the effects of your 
project. Note that, once you construct your reference case for a 
project, that reference case should remain constant for the life of 
the project. If you revise your reference case, you will need to 
revise any previous project reports to reflect the revised reference 
case.
    A reference case is often referred to as the ``but for'' 
scenario, as in, ``but for this project, emissions would have been * 
* * .'' Two possible ways to finish this sentence are: (1) ``* * * 
the same as a previous year'' (the basic, or historic, reference 
case) or (2) ``* * * different from any previous year'' (the 
modified reference case, which is adjusted from historic or 
projected data or based on established standards). Each of these 
cases is discussed below.
    Under this program you may choose between these two approaches. 
To fulfill your purposes for reporting, you will want your reference 
case to be clear and understandable. Depending on the nature of and 
circumstances associated with your operations, a basic reference 
case (using

[[Page 68225]]

historic emissions) may provide a suitable benchmark against which 
to compare project emissions. In other cases, you may determine that 
a modified reference case is more appropriate. Even if you choose to 
use a modified reference case, you still may wish to provide your 
historic emissions data to enable users of the EPAct 1605(b) 
database to evaluate the reported emissions reductions efforts with 
respect to a historic baseline.
    Basic. The basic reference case uses only historical data. 
Emissions from the project or sequestration levels may be compared 
with the corresponding emissions or sequestration level for some 
previous year(s), for example, (1) the 1987 to 1990 period, the 
period that EPAct Section 1605(b)(1)(A) describes as the baseline 
years for purposes of reporting emissions; (2) the year(s) just 
prior to commencement of the emissions reductions project; or (3) 
some intervening year(s) more representative of normal operations. 
The reference case may be defined as the average annual emissions 
during some multiyear period or the highest or lowest annual 
emissions during that time. Alternatively, you could choose a single 
reporting year (for example, 1990) as the reference case year.
    Modified. The modified reference case recognizes that even in 
the absence of your project, your future emissions levels may differ 
from past levels. The emissions or sequestration levels in the 
reference case may differ from historical levels because of gradual, 
predictable changes or because of abrupt changes. Gradual changes in 
emissions might occur because of growth or decline in industrial 
output, slowly changing technologies, or natural processes, such as 
natural regeneration of clear-cut forests. In the case of expanding 
output or operations, you might extrapolate the reference case from 
past trends and external data to determine what emissions would have 
been in the year in which the project's effects are being measured. 
This process may involve using models and adjusting for growth over 
time. You could estimate the reference case emissions using historic 
or current-year data and adjusting for future growth by multiplying 
the historic emissions rate (emissions per unit of production) by 
the units produced in the reporting year.
    A modified reference case based on a hypothetical, abrupt, 
external change presents a greater challenge for the reporter. For 
example, a reference case for a forest preservation project might be 
built on the assertion, ``The forest would have been cut if we had 
not taken actions to preserve it.'' If you use this type of 
reference case, you should take extra care to document the facts 
underlying the case and to build a sound explanation about why this 
is the appropriate reference case to use in developing your 
analysis.
    Reference cases for projects involving new operations or added 
capacity may lie between the two extremes of abrupt changes and 
gradual changes. For these activities, you will also need to 
exercise care in constructing a credible modified reference case. 
Use of industry standards or alternatives actually considered in the 
planning stages will build credibility. For example, if in the 
construction of a new building you exceed existing building 
standards for energy efficiency, you could justifiably assert that 
the reference case for that project is a building that just meets 
the standards.

Case 1: Rarotonga Coconut Cream, Inc.--Reference Case

    RCCI decided to use a basic reference case. Managers reasoned 
that, in the absence of the shift to the distillate oil-fired 
cogeneration system, they would have continued using the residual 
oil-fired boiler and purchased electricity. Because its production 
levels had been constant over the past seven years, RCCI felt no 
need to modify the historic levels of energy use to reflect expected 
future trends. Instead, it decided to use an average of its 
emissions for 1989 and 1990, the earliest two years for which it had 
energy use records. Consistent with the RCCI project description, 
the reference case only incorporated the plant's electrical, 
processing, and steam production systems.

Case 2: Rural-Urban Office Management, Inc.--Reference Case

    RUOMI chose to use a basic reference case, averaging its 
emissions for the years 1993 to 1995. There were several reasons for 
this decision. Because the use patterns and demands of RUOMI's 
tenants had changed dramatically from 1980 to 1990, the years 1987 
to 1990 (or an average of these years), would not have been an 
appropriate indicator of expected emissions in the late 1990s. 
However, by 1992, RUOMI had established many long-term contracts 
with its tenants. Energy-use patterns had stabilized, and there was 
no reason to expect significant shifts in the foreseeable future. 
The company chose to average the years 1993 to 1995 because the 
first three months of 1994 included unusually cold weather and were 
not indicative of general energy demands. While its emissions 
reductions would have appeared larger if RUOMI had used only 1994 as 
a reference case, company officials were informed by the Metropolis 
energy planner that the reports could lose credibility if they only 
compared their project's energy use and emissions levels to a worst-
year reference case.

Case 3: Illinois-Ohio, Unlimited--Reference Case

    IOU's project was clearly driven by increased demands for its 
product. This immediately suggested that past emissions levels would 
not be a good model of what would have been, but for the project. 
Therefore, the utility chose to use a modified reference case to 
reflect the growth in peaking demand it was experiencing. However, 
IOU also recognized that it was operating in an environment where a 
company's current emissions are often compared to some historic 
level. Therefore, IOU decided to report both historic 1987 to 1990 
emissions levels, and the modified reference case reflecting its 
changing customer demands.

GG-5.2 What Effects Did the Project Have?

    The second major step in project analysis is identifying effects 
of the project. Your report should address all the effects that you 
can identify--not just the obvious, intended effects, but also less 
noticeable, unintended effects. Effects you should consider include 
activity shifting (moving processes within your organization), 
outsourcing (purchasing commodities or services you formerly 
produced), life cycle emissions shifting (upstream and downstream 
changes in processes or materials used), and market effects (offsets 
to achievements caused by residual demand).
    Example:  An electricity conservation project reduces 
electricity use at an industrial site and associated carbon dioxide 
emissions at the utility. However, the utility's emissions of other 
greenhouse gases, such as methane and nitrous oxide, will be reduced 
as well. In addition, conserving electricity may lead to other 
effects within the utility's transmission and distribution system. 
All of these effects should be identified (and quantified, where 
possible).
    Example: Closing an industrial plant will likely reduce on-site 
emissions. However, if another plant is opened or expanded to meet 
market demand for the former plant's products, the increase in 
emissions from the new plant would at least partially offset the 
decrease in emissions resulting from the closing. To place the 
overall effects of the closing in context, emissions associated with 
the replacement production capacity should be identified and 
quantified to the extent possible.
    Example: Shifting an activity to another part of your 
organization or substituting your production of a commodity with its 
purchase from others may appear to reduce your emissions. 
Manufacturing a component at a subsidiary's plant, or the purchase 
of power by a utility for distribution to customers, however, are 
some examples in which net emissions may not have changed. The 
emissions associated with the shifted or substitute production 
activity should be taken into account, regardless of where it 
occurs.
    Example: Manufacturers can switch from steel to aluminum and 
claim reductions because working with aluminum results in fewer 
emissions. However, the production of the aluminum itself creates 
emissions different from those associated with the production of the 
steel. Both the on-site changes and the upstream changes should be 
considered when you analyze whether you have emissions reductions to 
report under this voluntary reporting program.
    Example: Extending the rotation length or completely precluding 
harvesting at a given forest location increases the carbon storage 
services at that site. However, the added sequestration may be 
largely offset if another site is harvested earlier than it 
otherwise would have been to meet the market demand for timber that 
was not met by timber from the first site.

    Effects you can identify should be reported. These would include 
any on-site effects resulting from changes in both fuel combustion 
and electricity use. Off-site effects may be more problematic. In 
some situations, you may have relationships with customers or 
suppliers that allow you to both identify and estimate effects that 
occur outside your organization. If you have or can get such 
information, you should report it.

[[Page 68226]]

Effects you can identify but have no data for should be so noted in 
your report.
    Although quantifying all effects of a project can be difficult, 
keep in mind that the credibility of your report will depend to some 
extent on your ability to identify effects. If your targeted 
audiences can easily identify effects that you have ignored in your 
analysis, the credibility of the entire report may be in question.

Case 1: Rarotonga Coconut Cream, Inc.--Project Effects

    It was easy to identify the obvious effects of the cogeneration 
project: the reduction of direct emissions as a result of switching 
from residual oil to distillate as the primary on-site fuel and the 
reduction of indirect emissions associated with reduced production 
of electricity by the electric utility. However, after giving the 
matter some additional thought, RCCI realized that other effects 
were associated with the project as well. For example, the number of 
fuel delivery vehicle trips was reduced by half with the switch from 
residual oil to distillate and the increased storage capacity. Line 
losses and the indirect emissions associated with the very long 
distribution of low voltage electricity were deemed to be negligible 
and beyond RCCI's ability to calculate.
    RCCI listed each of the effects it could identify, but decided 
not to attempt to quantify any but the first two effects.

------------------------------------------------------------------------
                                Contribution to
       Project effects             reduction           Significance
------------------------------------------------------------------------
Reduce emissions associated                   +   Large.
 with utility electricity
 production.
Reduce CO2 emissions                          +   Medium
 associated with on-site
 fossil fuel burning
 (switching from residual to
 distillate).
Reduce transportation-                        +   Small-Medium.
 related services.
Decrease indirect emissions                   +   Negligible.
 associated with line losses.
------------------------------------------------------------------------

Case 2: Rural-Urban Office Management, Inc.--Project Effects

    RUOMI contracted with Environmental Security Consulting 
Organization (ESCO), a local energy service company, to evaluate the 
costs and benefits of several alternative technologies. After 
careful evaluation of the use patterns and tenant needs in RUOMI's 
office complex, ESCO provided a list of two dozen potential energy 
efficiency improvements and the energy savings and costs associated 
with each. They explained to RUOMI's management, however, that 
simply summing across all technologies would not provide an accurate 
assessment of expected energy savings. Many of the equipment changes 
would interact with each other, some having negative effects on 
energy savings, others having synergistic effects. Further, the type 
and extent of the interactions would depend upon actual use patterns 
as well as seasonal variations and weather patterns. Following 
ESCO's recommendation, RUOMI contracted for 14 of the items on the 
list.
    Because of the complex nature of the energy changes expected 
from the modifications, ESCO recommended that the resulting effects 
of the activities be analyzed as one integrated project. This 
avoided the difficulty of having to sort out the impact of each 
equipment change. It also made any evaluation for the DOE voluntary 
reporting program simpler. Since RUOMI was analyzing the projects at 
the entity level, emissions reductions could be calculated directly 
from its emissions report. Therefore, separate identification of 
each project's effects was unnecessary.

Case 3: Illinois-Ohio Unlimited--Project Effects

    Identifying all of the effects of IOU's project and reference 
cases was not a simple exercise. IOU recognized that it needed to 
consider the effects that its project had (1) on its own operations 
and emissions, (2) on the emissions of IPP, (3) possibly on the 
operations of the larger regional power pool, and (4) on the 
supplier of the PVCs. It was not sure it could accurately estimate 
all of these effects without incurring unreasonable analysis costs, 
but it at least wanted to identify them in planning the analysis 
that would lead to its completed report.

------------------------------------------------------------------------
                                Contribution to
       Project effects             reduction           Significance
------------------------------------------------------------------------
IPP emissions that would                      +   Large.
 have gone up because of
 additional power purchases
 are reduced.
PVC manufacturer emissions                    -   Small.
 do go up.
Power pool emissions might                    ?   Unknown.
 change.
IOU emissions do go down....                  +   Small.
------------------------------------------------------------------------

GG-5.3 How Do I Estimate Project Accomplishments?

    The final major step in project analysis is estimating emissions 
levels for both the reference case and project case to determine 
emissions reductions. The guidelines and supporting documents 
provide you with a wide range of options for obtaining data and 
defining the methods for estimating your project's effect on 
greenhouse gas emissions and carbon sequestration.
    First, the guidelines and supporting documents recognize three 
categories of data.
    Physical data. This is information that describes the activities 
involved in your project. For example, how many exit lights were 
replaced? What was the power requirement of the old and the new 
lights? How many hectares of trees were planted? What species of 
trees? How many trees per hectare?
    Default data. This is information provided by the supporting 
documents to assist you in evaluating the emissions or sequestration 
effects of your project. Using default data increases your ease of 
reporting (in some cases, allowing you to report when you might not 
otherwise have enough data). However, using default data may 
decrease precision and, because the defaults may be conservative, 
your emissions reductions may appear lower than they actually are. 
There are two categories of default data:
    Emissions factors. These are factors that allow you to convert 
information about a change in energy use to an estimated change in 
greenhouse gas emissions. Some emissions factors are rather precise. 
For example, the change in direct emissions of carbon dioxide from a 
reduction in methane combustion is essentially constant, regardless 
of when or where the change took place. Other emissions factors, and 
particularly those for indirect emissions, are less precise. For 
example, the supporting documents provide emissions factors for 
electricity on a state-by-state basis. However, the effect that a 
change in electricity consumption has on emissions will vary by 
loca-tion within the state, the time of day, and the season that a 
change occurs.
    Stipulated factors. These are factors that allow you to convert 
physical data about your project into estimates of changes in energy 
use, greenhouse gas emissions or carbon sequestration. The 
guidelines provide this information for a few types of projects 
where the scope and nature of the project can be clearly defined and 
where the effects on emissions can be predicted with relative 
certainty. For example, the supporting document for the forestry 
sector provides stipulated factors for converting physical data 
about tree planting into estimates of carbon sequestration. The 
supporting document for the residential and commercial buildings 
sector provides stipulated factors for converting information about 
certain energy-efficiency projects into estimates of fuel savings. 
These estimates can be combined with default emissions factors to

[[Page 68227]]

estimate reductions in greenhouse gas emissions.
    Reporter-generated data. This is information that you provide 
which is used to estimate the effects of your project. There are two 
categories of reporter-generated data:
    Measured data. These are data, collected directly from the 
project or a control group, that you use to estimate your project's 
accomplishments.
    Engineering data. These are data that you derive from various 
sources, such as engineering manuals, manufacturer's equipment 
specifications, surveys, academic literature, professional judgment, 
and computer models.
    Based on these three categories of data, the guidelines and 
supporting documents recognize two categories of projects: Standard 
projects, which rely on physical and default data, and reporter-
designed projects, which use measured or engineering data that you 
develop (as well as appropriate default data). You will need to 
report the category(ies) of data and projects that you choose to 
use.
    Standard projects. These are projects for which the guidelines 
and supporting documents provide the procedures and information to 
estimate the emissions reductions or carbon sequestration. Reports 
of these projects rely entirely on physical and default data (see 
Figure GG-2).
    Not all projects can be described in standard project reports. 
The supporting documents for each sector delineate, where possible, 
projects for which emissions factors and stipulated factors are 
provided, and for which standard project reports can be submitted. 
You should recognize that default values are often conservative; 
that is, if you use them, you are likely to underreport your 
emissions reductions or carbon sequestration. However, if you do not 
directly measure and monitor or your organization does not have 
expertise in estimation methods, the default values will allow you 
to calculate the effects of your activities.
[GRAPHIC] [TIFF OMITTED] TP05DE03.002

    Reporter-designed projects. These projects use physical and 
reporter-generated data, possibly in combination with default data, 
to estimate their accomplishments (see Figure GG-3). For this type 
of project, you should be able to indicate the source of all data, 
and in the case of data you generate, how it was measured or 
derived. For reporter-designed projects, the supporting documents 
for each sector provide principles and guidance.
    Estimation of the emissions effects of many reporter-designed 
projects will require that you not only gather measured or estimated 
data, but that you also manipulate this information to derive the 
emissions levels of your project and reference case. The data 
manipulation could involve relatively simple calculations or 
extremely complex modeling. You should be able to identify the 
nature of the calculations and/or the type/name of the model you 
have used. In some instances, it may not be possible to estimate 
emissions for both the project and the reference case. In these 
cases, identified in the supporting documents for each sector, you 
may need to measure the emissions reductions directly.
    Finally, the emissions reductions or carbon sequestration of 
your project is simply the difference between your project 
emissions/sequestration and your reference case emissions/
sequestration.

[[Page 68228]]

[GRAPHIC] [TIFF OMITTED] TP05DE03.003

Case 1: Rarotonga Coconut Cream, Inc.--Estimation Methods

    RCCI limited its quantitative analysis to the obvious effects; 
estimation of the annual emissions reductions associated with its 
project was simple. First, it estimated the annual emissions 
associated with the project. This was simply its annual distillate 
oil consumption multiplied by the default emissions factor for 
distillate oil supplied by the guidelines' supporting documents. 
Second, for the reference case, RCCI multiplied its reference case 
annual electricity use by the default electricity emissions factor 
for its state, multiplied its reference case annual residual oil use 
by the default residual oil emissions factor, and summed the two to 
arrive at total emissions for the reference case. Its total reported 
emissions reductions were the difference between the reference case 
emissions and the project case emissions.
    RCCI was pleased that it was able to do its entire analysis 
based on data it had readily at hand, that is, its fuel and 
electricity use records from before and after the project, and the 
default emissions factors provided by the guidelines.

Case 2: Rural-Urban Office Managers, Inc.--Estimation Methods

    ESCO, the contractor for RUOMI, had primary responsibility for 
preparing the voluntary report for the DOE program. ESCO knew that 
because of the complexity of the project it could not derive 
estimates using default data provided in the Guidelines' supporting 
documents. The project managers turned to the supporting document 
for the residential and commercial buildings sector to identify the 
recommended methods for gathering data for their type of project. 
They found that the recommended methods included approaches very 
similar to ones they had previously used to measure energy savings 
in complex projects. After a full year of measuring and monitoring, 
they summarized the energy-use data, and performed calculations to 
derive the difference between the project energy use and the 
reference case energy use.
    Applying the natural gas and electricity emissions factors 
supplied as default data, they converted the estimated energy 
reductions to estimated emissions reductions.

Case 3: Illinois Ohio Unlimited: Estimation Method

    IOU recognized two distinct parts to its emissions reductions 
estimation process. First, it needed to evaluate the direct 
electricity system emissions for both its reference case and project 
case. Second, it wanted to estimate the emissions associated with 
manufacturing the PVCs. Tackling this latter point first, IOU 
contacted a prospective PVC supplier for any information on 
emissions associated with the PVC manufacturing process. The 
supplier, it turned out, had commissioned a report that estimated 
not only the direct carbon dioxide emissions associated with the 
manufacture of PVCs, but also the emissions associated with the 
supply of raw materials--steel, aluminum, chemicals, and 
electricity--that were used in PVC fabrication. Had this information 
not been available, IOU would have had to decide whether or carry 
out this study itself or not quantify this effect at all, possibly 
affecting the credibility of its project report.
    IOU then turned to the electricity system emissions effects of 
its project. The project reduced emissions that would have occurred 
had IOU purchased its electricity from IPP. Additional production 
from IPP for daytime peaking would have been generated by a natural 
gas combined cycle unit. IOU developed a single conversion factor 
for the emissions per kWh that would have occurred for electricity 
from IPP's system. This meant that as the peak daytime demand grew 
over time, IOU would be able to estimate that portion of the 
emissions for the reference case that was attributable to IPP, that 
is, how much higher IPP emissions would have been had IOU relied on 
purchased power.
    The new PVC system was designed to meet the growth in demand 
over the next decade. But because the PVCs would be generating at 
full capacity immediately, they would actually displace some of 
IOU's current daytime generating capacity. The marginal unit in 
IOU's generation equipment was an oil-fired turbine generator. IOU 
developed a conversion factor for the emissions per kWh that would 
have occurred from that unit, if its production had not been 
partially displaced by the solar power system.
    In summary, the IOU emissions reductions estimation consisted of 
three major components. First, at the start of the project there was 
an initial emission of carbon associated with the production of the 
PVC

[[Page 68229]]

units. This effect was reflected only in the first annual report. 
While some of these emissions had actually taken place as many as 
two years earlier, IOU believed it was sufficiently realistic to 
account them all to the first reporting year. Second, the project 
emissions also showed a sudden drop in emissions for the oil-fired 
plant due to displacement of daytime oil-fired generation by the 
PVCs, whose entire capacity was not initially required to meet 
midday peak demand. However, as expected, the emissions from the 
oil-fired plant climbed each year as daytime peak demand grew and 
increasingly the PVC capacity was used to meet that demand. This 
increase was reflected in IOU's annual reports. Third, under the 
reference case, IOU reported constant emissions from its own oil-
fired plant and annually increasing emissions from IPP's natural gas 
combined cycle plant. The emissions reduction each year was 
calculated by subtracting the project emissions from the reference 
case emissions.

GG-5.4 What if Two or More Organizations Wish To Report the Same 
Project?

    You may report activities undertaken in association with others. 
If you do so, you must identify other potential reporters of the 
same activity so that the program can account for multiple reports 
of the same activities. You may wish to make arrangements for 
reporting with others involved in your project.
    Joint activities generally fall into one of two categories. The 
first category includes one-time transactions that are large enough 
to require negotiation before the exchange takes place and generally 
involve a written contract, such as demand-side management (DSM) 
programs. The second category comprises transactions that take place 
repeatedly between manufacturers and consumers where negotiated 
contracts are generally not involved, such as individual purchases 
of household appliances.

Three Examples of Joint Activities

    Demand-side management programs: When an electric utility 
undertakes a DSM program, three parties are involved in reducing 
carbon dioxide emissions: (1) Manufacturers of the energy-efficient 
equipment, such as improved lighting, refrigeration, and other 
energy-consuming goods; (2) consumers of electricity (households, 
commercial operations, and industrial firms); and (3) the utility 
itself. All three parties may wish to report the reductions in 
emissions.
    High-efficiency automobiles: EPAct section 1605(b) also suggests 
that the manufacture of high-efficiency automobile fleets be 
reportable under this program. On the one hand, the purchaser of a 
high-efficiency car makes the ultimate decision to reduce emissions 
related to personal transportation. On the other hand, the 
automobile manufacturers who shifted their fleet composition are 
enabling the automobile owners to obtain more efficient automobiles.
    Tree-planting agreements: Some utilities have entered into 
agreements with landowners to plant trees. The utilities provide 
funding for establishing the trees; in return the landowners agree 
to leave the new trees in place for a specified number of years. 
Both landowners and utilities have played essential roles in carbon 
sequestration.
    Where contracts are involved, you may make arrangements to 
assign the ability to report resulting emissions reductions before 
they are reported under this program. You are not required to do 
this sorting out before you report, but, depending upon how you 
believe this information will be used, you may wish to resolve any 
questions before reporting.
    You may also wish to mutually decide reporting capabilities for 
purchases. If you can most easily aggregate many small reports, for 
example, as a manufacturer of high-efficiency automobiles or 
efficient appliances, you may wish to include, as part of the 
purchase transaction, an agreement with the consumer that you will 
report the energy-efficiency information, unless consumers notify 
you that they wish to do so.
    However, for some technologies, consumers are in a better 
position to estimate actual accomplishments. For example, new 
automobile owners can better estimate annual vehicle miles traveled 
and, hence, the fuel and emissions savings associated with the 
purchase of a high-efficiency car. You need to consider the trade-
off between the ease of reporting and accuracy of estimating the 
emissions reductions when deciding who will report the reduction--
the manufacturer, the automobile owner, or both. If parties report 
separately, each should identify the other as potential reporters of 
the same information.

GG-5.5 May I Report Through My Trade Association or Other Third 
Parties?

    You may wish to explore reporting through another party--for 
example, through a trade association, civic association, or 
fraternal organization. Each of the supporting documents discusses 
third-party reporting as it may apply to particular sectors.
    Third-party reporting may be appropriate for a number of 
reasons. Organizations may be able to provide technical or 
administrative assistance to you in reporting. Multiple reports may 
be aggregated to provide a quantity of emissions and reductions 
which each individual reporter would not choose to report. 
Furthermore, confidentiality of some data reported may be enhanced 
by third party reporting.
    Third-party reporting may not be appropriate for your purpose in 
reporting. For example, it does not provide the transparent link to 
you that is necessary for creating a formal public record of your 
emissions and achievements for any purpose.

GG-5.6 What Else Will I Be Asked To Report?

    As part of your report, you will be asked to choose one of three 
descriptors of the project(s) whose effects you are reporting. This 
identification will be limited to those provided in the language in 
EPAct 1605(b): (1) Voluntary reductions, (2) plant or facility 
closing, and (3) state or Federal requirements.
    Projects may be undertaken for other purposes, for more than one 
purpose, or may have greenhouse gas impacts that were not the reason 
for implementing the project. You may wish to, but will not be 
required to, report more detailed information on why you undertook 
the project.

GG-5.7 May I Report International Projects?

    Considerable interest has been generated regarding the potential 
for cooperation among parties in different countries. For example, 
there may be opportunities for U.S. parties to reduce greenhouse gas 
emissions and increase carbon sequestration outside the United 
States, perhaps at lower cost than possible through domestic 
activities.
    Under this program, you may report the relevant results of your 
activities outside the United States, under the same process 
applicable to similar domestic activities. Note that you may have 
special difficulty in analyzing international activities: 
determining an appropriate reference case, defining project 
boundaries, selecting appropriate measurement or estimation methods, 
and obtaining credible data. Special attention should be given to 
all the identifiable effects of your international activities.
    Under the United Nations Framework Convention on Climate Change, 
nations that are parties to the Convention will determine how 
cooperative efforts between member nations and their respective 
citizens (``joint implementation'') will be counted toward meeting 
each country's commitments under that treaty. The President's 
Climate Change Action Plan, announced in October 1993, includes a 
pilot program called the United States Initiative on Joint 
Implementation (USIJI) designed to help establish an empirical basis 
for considering approaches to joint implementation. The USIJI 
program has developed evaluation criteria and will develop emissions 
measurement and verification methods for international projects 
accepted into the pilot program.
    If you are reporting the results of any international project to 
this program, you will also indicate whether it has been accepted 
under the USIJI or under the Convention as an accountable joint 
implementation project. Reporting the results of an international 
activity under the EPAct 1605(b) program alone does not bring it 
under the umbrella of formal joint implementation.

GG-5.8 May I Report Prospective Emissions Reductions?

    Many projects that reduce greenhouse gas emissions or sequester 
carbon achieve their results over several years, or even decades. 
For some of these projects, the accomplishments are evaluated by 
means of computer modeling or engineering estimates, rather than by 
direct measurement and monitoring of greenhouse gas emissions and 
flows. In those cases, the estimation process is generally carried 
out before the project begins.
    If you have analyzed your project using a method that estimates 
effects prospectively, you may choose in the first reporting year to 
report the expected annual emissions reductions or carbon 
sequestration for future years. However, that information will be 
maintained separately from the EPAct 1605(b) database.

[[Page 68230]]

    To have your project accomplishments recorded in the EPAct 
1605(b) database, you must certify each year that the project 
continues to perform as expected. As you certify each year's 
accomplishments, EIA will transfer the data from the database of 
prospective accomplishments to the EPAct 1605(b) database.
    You may also modify your estimates of past accomplishments at 
any time for any of several reasons. For example, if events 
following the commencement of the project are different than 
expected, you may wish to modify your model to more closely reflect 
actual events. Alternatively, you may simply find modeling or 
engineering estimation methods that you believe to be more accurate 
than those you initially employed. You may even decide to carry out 
field measurements where you had not initially anticipated doing so. 
Whatever your reason, you can modify the existing estimates to 
reflect your more accurate estimates of both your past 
accomplishments recorded in the EPAct 1605(b) database and your 
expected accomplishments recorded in the database of prospective 
accomplishments. However, you should provide clear documentation of 
how you derived the revised estimate.

GG-5.9 How Far Back May I Report Projects?

    A primary purpose of the program is to record emissions 
reductions, not to track when projects were initiated. Therefore, 
you may report new or ongoing projects that have achieved reductions 
beginning January 1, 1991. However, for any project, you must 
establish a credible reference case and retain that reference case 
for all your reports of that project. If you use historic data to 
construct your reference case, you should not use data earlier than 
1987. If you change your reference case, you must amend any previous 
reports for that project to account for the amended reference case.

    Example: You initiated a project in 1991 that reduced emissions 
from their 1990 levels. This project is reportable.
    Example: You initiated a project earlier than 1987 that has 
decreased emissions every year relative to each previous year. You 
may establish either a basic or modified reference case based on 
what emissions would have been without the project (using only data 
from 1987 on), then report the emissions reductions from the project 
for 1991 and subsequent years.
    Example: You initiated a project earlier than 1987 that reduced 
emissions to a level that stabilized during (or before) the baseline 
years 1987-1990. This project would not be reportable, since the 
reductions were achieved prior to the period covered by the EPAct 
1605(b) reporting program.
    Example: You have an ongoing DSM program to encourage 
replacement of appliances or equipment. You would not be able to 
report achievements before 1991, but any appliances replaced in 1991 
or after that year are new reductions and could be reported.
    Example: You have been installing windmills every year for 10 
years. In order to report emissions reductions for 1991, you would 
need to demonstrate that the 1991 windmill displaced emissions-
producing generation. If the windmill replaced another, the project 
would not be reportable.

    These are relatively straightforward examples when you construct 
historic reference cases. Your analysis becomes more complex when 
you wish to construct modified reference cases. In general, you 
should not use data from years before 1987 except as additional 
support for your assertion of what modified levels would have been 
after 1987.

GG-5.10 Must I Take Into Account the Different Effects of Different 
Greenhouse Gases?

    Your reports on emissions and emission reductions will include 
data on greenhouse gases in tons of each gas emitted; you will not 
be required to calculate the various effects of different gases on 
climate for this voluntary reporting program. However, you may wish 
to perform these calculations for your own purposes. For example, 
you may wish to evaluate the costs of competing proposed projects in 
terms of the beneficial effects on climate; in order to do so, you 
may wish to look at these effects using a common index, such as the 
equivalent effect in tons of carbon dioxide. You may wish to talk 
about such equivalencies with various stakeholders or for public 
relations purposes.
    The Intergovernmental Panel on Climate Change has developed an 
index that compares the impact that each gas has on global warming 
relative to the effect that carbon dioxide has. Information about 
this index, called the Global Warming Potential (GWP), is presented 
in Appendix E, along with GWPs for the types of gases covered by 
this reporting program. If you wish to use the index, remember that 
it does not take into account some complexities of atmospheric 
chemistry and that the underlying science is evolving.

GG-5.11 Is It Necessary To Report Emissions Reductions and Carbon 
Sequestration Every Year?

    This is a voluntary reporting program. You are under no legal 
obligation to continue reporting. However, you should recognize that 
the usefulness of your initial reports may be affected by your 
participation in the program in subsequent years.
    If you report emissions reductions for a period of time, and 
then fail to report thereafter, the user of the database is likely 
to assume that your project is no longer reducing emissions relative 
to the reference case. However, this does not negate the value of 
the reductions accomplished while the project was in place.
    Reporting carbon sequestration projects raises a different type 
of problem. If you report carbon capture for a number of years and 
then cease reporting, a database user is apt to assume that the 
carbon that had been captured has been released back to the 
atmosphere. This not only limits recognition of any accomplishments 
that may have occurred following cessation of your reports, but 
largely negates the value of accomplishments already reported.
    You or your firm may find that, following successfully reporting 
to the voluntary reporting program for several years, you miss one 
or more years of reporting. If you choose to resume reporting, your 
initial report should contain information not only for the most 
recent reporting year, but also, if possible, for all of the 
intervening years during which you did not report. This will ensure 
that the EPAct 1605(b) database reflects a continuous record of your 
activities, thereby increasing the credibility of all your reports.

GG-5.12 May I Amend My Previous Years' Reports?

    If you have submitted reports under this program but afterwards 
develop better data (for example through field measurements or 
utility-specific emissions factors), or better estimation methods 
(for example, your organization's adoption of standard analytic 
procedures), you may amend your previous reports. You may also need 
to amend reports because you have amended your reference case for a 
particular project. Your amended reports should clearly state your 
reasons for amendment and the bottom-line difference that results 
from the amendment. The following case study discusses an instance 
in which a reporter chose to amend previous reports.

Case 4: Black Forest Cake, Inc.--Long-Term Project Reporting

    Note: This example illustrates only one approach to analyzing a 
project; your analysis, methods, and calculations will vary 
depending on your particular circumstances, the geographic location 
of the project, and other factors.

    Black Forest Cake, Inc. (BFCI) was a family-owned business that 
was experiencing extremely rapid growth in demand for its products, 
which included baked goods produced at 13 sites in five states, 
catering services at 10 shops in seven states, and equipment rentals 
at 15 stores in three states. It operated from a total of 23 sites 
spread across nine states.
    The family members and many of their staff were environmentally 
conscious. While they were delighted with the increased demand for 
their products, they were concerned to see their energy consumption 
rising, particularly their natural gas consumption for baking ovens 
and space heating, and their gasoline use in delivery vehicles. They 
knew that increased energy use signaled increased greenhouse gas 
emissions.
    Therefore, BFCI decided to voluntarily offset some of the 
increase in emissions by undertaking a tree-planting (carbon 
sequestration) project on farmland they owned. They were not 
interested in receiving official recognition for their effort. They 
were motivated purely by their interest in environmental protection 
and a desire to project an image of BFCI as a ``good global 
citizen.'' They did, however, want to be sure that their project 
actually reduced net carbon dioxide emissions, not just appear to do 
so. Therefore, BFCI decided that its project should at least meet 
the minimum reporting standards used by DOE in the EPAct 1605(b) 
voluntary greenhouse gas reporting program.
    In its first report following the establishment of the tree 
stand, BFCI

[[Page 68231]]

reported that it had planted the trees and reported information 
consistent with the guidance provided in the forestry sector 
supporting document. It also reported that it expected the forest to 
capture carbon at a rate consistent with the stipulated factors 
provided by the guidelines' supporting document for forestry. Each 
year thereafter BFCI confirmed in its report that the project 
appeared to continue to perform as expected.
    After eight years of relying on the default stipulated factors, 
BFCI became engaged in a dialogue with a local environmental group. 
One consequence of the discussions was that BFCI agreed to measure 
the standing carbon on its project site in the tenth year to 
determine whether the project had met the expectations established 
for the first decade by the stipulated factors. The field 
measurements, including statistical sampling of both soils and 
biomass, revealed that the project had actually exceeded 
expectations by 20 percent. This was attributed to the fact that the 
original soils were particularly rich in phosphorous and nitrogen.
    BFCI amended its previous reports to reflect this new 
information based on field measurements. The amended reports 
increased the reported carbon dioxide flows to the forestland by 20 
percent in each of the first ten years. BFCI also amended the 
projected annual carbon capture rates for the second decade to 
reflect the higher-than-expected performance. BFCI thus transformed 
its project from a standard project to a reporter-defined project.

GG-6 What Are the Minimum Reporting Requirements?

    DOE has not established a minimum size for a reporting entity or 
for the reported emissions, emissions reduction, or sequestered 
carbon. For some purposes of reporting, such as the exchange of 
information on pilot projects, a minimum size requirement would 
limit participation. Similarly, you are not required to complete a 
full and comprehensive report as defined earlier. However, you must 
report a minimum set of information.
    Whatever the scope of your report, you are required to certify 
the accuracy of the data you have provided. You must also meet 
minimum information requirements:
    [sbull] If you are reporting greenhouse gas emissions, you must 
clearly identify the facilities that are covered by your report and, 
for each greenhouse gas covered by your report, clearly identify the 
gas, the amount of the emissions (expressed in metric tons of that 
gas per year), and the year of the emissions.
    [sbull] If you are reporting emissions reductions or carbon 
sequestration projects, you must be able to describe your project 
and provide sufficient physical data to allow users of the database 
to form a clear understanding of the nature and scope of your 
project, including the cause of the change in emissions or carbon 
sequestration. You must also identify the location of the project, 
the reference case for the project, and the effects of the project.
    [sbull] Whether you are reporting on a standard project or a 
reporter-designed project, you must be able to identify the sources 
of your data, the level of change of emissions or carbon 
sequestration per year, and the year in which the change took place.
    [sbull] If you are submitting a reporter-designed project report 
involving direct monitoring and measuring or engineering 
estimations, you must also identify the techniques used to gather 
the data and make the estimates.

GG-7 Can My Data Be Kept Confidential?

    The provisions of section 1605(b)(3) stipulate that ``Trade 
secret and commercial information that is privileged or confidential 
shall be protected as provided under Section 552(b)(4) of Title 5, 
United States Code.'' In general, information submitted to the 
Federal government must be made available to the public. This 
section prohibits release of certain trade secret and commercial or 
financial information.
    You will enhance both the credibility and usefulness of 
information you report by making it available for public release. 
More accurate data will increase the value of emissions reductions 
estimates in terms of public recognition, and widely available 
information will help diffuse knowledge about cost-effective 
emissions reductions opportunities. Thus, you should try to avoid 
labeling reported information as confidential wherever possible.
    While a reporter may believe that some of the data voluntarily 
submitted under this program is entitled to protection under the 
exclusion, this protection is neither automatic nor complete. You 
should be aware that, under DOE regulations (10 CFR 1004.11), DOE 
will evaluate each claim of confidentiality and determine whether or 
not to disclose the data to the public. Also, data may be released 
to another Federal agency under certain circumstances regardless of 
any claim of confidentiality.

GG-8 What Certification Is Required?

    If you report under this program, you will be required to 
certify through your signature the accuracy of all the information 
reported. Therefore, the person who signs the report must be 
authorized to act as a representative of the reporting entity for 
these purposes. No independent certification is required, and the 
Federal government does not plan to certify your reports. However, 
you may wish to indicate if your data have been verified by a third 
party.

GG-9 What Should I Do Next?

    These general guidelines present an overall picture of the 
reporting process for the voluntary reporting program. You will find 
more detailed guidance in the sectoral supporting documents for 
electricity supply, residential and commercial buildings, industry, 
transportation, forestry, and agriculture. You may have reportable 
projects in several sectors; you may report them separately or 
capture and report the total effects on an entity-wide report. If 
you need the supporting documents, contact United States Department 
of Energy, 1000 Independence Avenue, SW., Washington, DC 20585.
    Reporting forms are available at the following address: United 
States Department of Energy, Energy Information Administration, 1000 
Independence Avenue, SW., Washington, DC 20585.
    DOE encourages you to report your achievements in reducing 
greenhouse gas emissions and sequestering carbon under this program. 
Global climate change is increasingly being recognized as a threat 
that individuals and organizations can take action against. If you 
are among those taking action, reporting your projects may lead to 
recognition for you, motivation for others, and synergistic learning 
for the global community.

[FR Doc. 03-29983 Filed 12-4-03; 8:45 am]
BILLING CODE 6450-01-P