MRR Final Regulation Order

FINAL REGULATION ORDER Amend Division 3, Chapter 1, Subchapter 10, Article 2, Subarticle 1, sections 95101, 95102, 95103, 95104, 95105, 95111, 95112, 95113, 95114, 95115, 95117, 95118, 95119, 95121, 95122, 95129, 95130, 95131, 95132, 95133, 95150, 95153, 95156, 95157, Appendix A, and Appendix B, and proposed adoption of new sections 95160, 95161, 95162, 95163, title 17 California Code of Regulations. Note: The pre-existing regulation text is set forth below in normal type. The proposed amendments are shown in underline to indicate additions and strikeout to indicate deletions. The symbol “***” means that intervening text not amended is not shown. Subchapter 10. Climate Change AMENDMENTS TO THE REGULATION FOR THE MANDATORY REPORTING OF GREENHOUSE GAS EMISSIONS Article 2: Mandatory Greenhouse Gas Emissions Reporting Subarticle 1. General Requirements for Greenhouse Gas Reporting *** § 95101. Applicability. (a) General Applicability. (1) This article applies to the following entities: *** (D) Carbon dioxide suppliers as specified below in paragraph (c), including CO2 producers regardless of quantity produced, and CO2 importers and exporters when annual bulk imports or exports equal or exceed 10,000 metric tons for 2011 or a later calendar year; *** (2) Any reporting entity in one or more of the categories in subsection (a)(1) above must submit an annual emissions data report, except as provided in the cessation provisions of subsections (h) and (i) of this section. The emissions data report must cover all source categories and GHGs for which calculation methods are provided or referenced in this article, for the reporting entity. Except as otherwise specified in this article, the report must be compiled using the methods specified by source category in 40 CFR Part 98. 1 *** (b) Calculating Facility GHG Emissions Relative to Thresholds. For facilities for which an emissions-based applicability threshold is specified in section 95101(a)(1), the operator must calculate emissions for comparison to applicable thresholds as specified below: *** (2) For the purpose of computing emissions relative to the 10,000 metric ton CO2e threshold for reporting applicability specified in section 95101(a), operators must include emissions of CO2, CH4 and N2O from stationary combustion sources and process emissions, but may exclude any vented and fugitive emissions from the estimate. Petroleum and natural gas system facilities identified under section 95101(e) must include all flaring emissions in the 10,000 metric ton CO2e threshold determination. However, iIf all the CO2, CH4, and N2O emissions emittedcaptured within the reporting entity’s facility boundary, including vented and fugitive emissions, exceed the 25,000 metric ton CO2e threshold specified in sections 95103(a) and 95103(f), the reporting entity is not eligible for the abbreviated reporting option provided in section 95103(a) and must submit an emissions data report pursuant to the full requirements of this Article, including obtaining verification services pursuant to section 95103(f). (3) Facilities with only stationary combustion emissions are subject to reporting according to the requirements of 40 CFR §98.2(a)(3), except that the thresholds for reporting in California are 10,000 metric tons of CO2e and an aggregate maximum heat input capacity of 12 MMBtu/hr or greater.When determining applicability relative to the thresholds for emissions reporting in sections 95101(b)(1) and (2) above, facility operators must include any supplier emissions from source categories in sections 95101(c)(5), (7), (8) and (10). If the threshold for reporting is exceeded, the facility and supplier emissions must be reported. If emissions are reported under multiple ARB facility IDs, the operator must report the other ARB facility ID’s associated with the facility. (4) Notwithstanding 40 CFR §98.2(b)(2), oOperators of facilities and suppliers must include emissions of CO2 from the combustion of biomass and other biofuels when determining applicability relative to thresholds for emissions reporting and cessation of reporting. *** (c) Fuel and Carbon Dioxide Suppliers. The suppliers listed below, as defined in section 95102(a), are required to report under this article when they produce, import and/or deliver an annual quantity of fuel that, if completely combusted, oxidized, or used in other processes, would result in the release of greater than or equal to 10,000 metric tons of CO2e in California, unless otherwise specified in this article: *** 2 (5) California consignees of importedImporters of liquefied petroleum gas, compressed natural gas, or liquefied natural gas into California, as described in section 95122; *** (10) Operators of liquefied natural gas production fFacilities that makeproduce liquefied natural gas products or compressed natural gas products by liquefying or compressingfrom natural gas received from interstate pipelines, as described in section 95122; *** (e) Petroleum and Natural Gas Systems. The facility types listed below, as further specified in section 95150, are required to report under this article when their stationary combustion emissions (including flaring) and process emissions equal or exceed 10,000 metric tons of CO2e, or their stationary combustion, process, fugitive, and vented emissions equal or exceed 25,000 metric tons of CO2e. *** (h) Cessation of Reporting and Verification for Reduced Emissions. The requirements for facility operators, suppliers, and electric power entities whose emissions are reduced below applicable reporting and verification thresholds are as follows for ceasing reporting and verification. Cessation requirements for facility operators that permanently “shut down” are in section 95101(i). (1) Reporting Entities Subject to a Compliance Obligation. (A) Facility operators and suppliers. Facility operators and suppliers that are subject to a compliance obligation under the Cap-and-Trade Regulation must report and verify until covered emissions are less than 25,000 MTCO2e for an entire subsequent compliance period, or until the reporting entity is no longer a covered entity, except as specified in section 95101(h)(1)(A). If annual covered emissions for a facility operator or supplier exceed 25,000 MTCO2e in any year after cessation requirements have been met, the operator or supplier must resume verification as required under this article, and the operator or supplier would again have a compliance obligation under the Cap-and-Trade Regulation, and must meet all applicable requirements. 1. If a facility operator or supplier’s emissions drop below 25,000 MTCO2e, in meeting the requirements for cessation in section 95101(h)(1)(A), but a facility operator or supplier’s total reported emissions remain above 10,000 MTCO2e, the facility operator must continue to report under MRR until emissions drop below 10,000 MTCO2e for a consecutive three-year period and in this case the facility operator or supplier must meet the requirements in section 95101(h)(2) before exiting MRR. 2. Notwithstanding section 95101(h)(1)(A), facilities with source categories in section 95101(a)(1)(A) that are subject to a compliance 3 obligation under the Cap-and-Trade Regulation, are subject to reporting and verification regardless of emission level, and so must follow the cessation of reporting and verification provisions in section 95101(i). 3. Once an opt-in covered entity begins reporting, it must continue to report and verify for each data year in which it incurs a compliance obligation under the Cap-and-Trade Regulation. 4. Fuel suppliers that cease to supply fuel in California and whose emissions drop to zero during a Cap-and-Trade compliance period must continue to report and verify until emissions are zero for an entire subsequent compliance period as defined in the Cap-and- Trade Regulation. Pursuant to section 95103(n)(2)(D), entities that cease to have a compliance and/or reporting obligation as a fuel supplier due to a change in ownership or sale or relinquishment of an inventory position at a terminal must continue to report and verify emissions from the reportable fuel transactions that occurred prior to the change. (B) Electric power entities. Electric power entities that import electricity to California, and therefore are subject to a compliance obligation under the Cap-and-Trade Regulation, must report and verify until the entity has no reportable imported electricity to California, and until the entity is no longer subject to a compliance obligation under the Cap-and-Trade Regulation for an entire subsequent compliance period. (C) An entity that meets the cessation requirements pursuant to sections 95101(h)(1)(A) and (B) must notify the Executive Officer, in writing, that it is ceasing to report and verify pursuant to this article and provide the reason(s) for the reduction of emissions. The notification must be submitted no later than the applicable reporting deadline for the year following the last data year that the entity is required to submit an emissions data report. Entities must provide the cessation notification to the address indicated in section 95103(o) of this article. (D) Operators, suppliers, and electric power entities that are subject to a compliance obligation and fully exit reporting pursuant to section 95101(h)(1) must maintain the corresponding records required under section 95105 and retain such records for 10 years following the submission of the final emissions data report to ARB. (2) Reporting Entities Not Subject to a Compliance Obligation. (A) Facility operators and suppliers. Facility operators and suppliers whose total reported emissions are below 25,000 MTCO2e in each reporting year, or have total reported emissions but not covered emissions that exceed 25,000 MTCO2e a year, and therefore are not subject to a compliance obligation under the Cap-and-Trade Regulation, must report under this article until total reported emissions are less than 10,000 4 MTCO2e for a consecutive three-year period. If total reported emissions for a facility operator or supplier exceeds 10,000 MTCO2e in any year after cessation requirements have been met, the operator or supplier must resume reporting as required under this article.

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