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Large Buildings May Be Impacted by Greenhouse Gas Reporting Requirements

November 30, 2009

Commercial and institutional buildings - including hospitals, universities, and large office buildings - could be affected by new greenhouse gas reporting requirements recently announced by the U.S. EPA. The new regulations call for subject facilities to begin monitoring their GHG emissions on January 1, 2010, and file their first annual reports by March 31, 2011.

Among the various sources covered by the new regulations are commercial and institutional buildings with GHG emissions of 25,000 metric tons per year or more from "stationary fuel combustion sources" located at the subject "facility." The U.S. EPA has estimated that between 20 and 25 percent of commercial buildings will be required to report their emissions under the new rule, which will include some office buildings, hospitals, schools, universities or other large facilities. In many instances, these facilities will be subject to regulation under the Clean Air Act for the first time.

For the purposes of GHG reporting regulations, a "facility" is defined as the physical property, plant, building, structure sources, or stationary equipment located on one or more contiguous or adjacent properties in actual physical contact or solely separated by a public roadway or other public right-of-way and under common ownership or control, that emits any greenhouse gas. Therefore, businesses and institutions with contiguous or adjacent operations under common ownership or control (e.g., hospitals, universities, etc.) would be required to report their aggregate GHG emissions from all "stationary fuel combustion sources" within the subject "facility." Stationary fuel combustion sources can include, but are not necessarily limited to, boilers, combustion turbines, engines, incinerators, and process heaters.”

Any facility that has an aggregate maximum rated heat input capacity of the stationary fuel combustion units of less than 30 mmBtu/hr and no other emission sources within their boundary is not subject to the reporting requirements. Any facility with an aggregate maximum rated heat input capacity in excess of 30 mmBtu/hr for all of the stationary combustion units at the facility, will need to do further calculations to determine if it meets the threshold for reporting.

The new reporting regulations do not limit or otherwise restrict GHG emissions; however, it would appear that the reporting requirement is a precursor to future federal GHG limitations, either via a cap and trade system or a carbon tax. For more information regarding the U.S. EPA's new GHG reporting regulations, please contact Matt Eugster at 616/336-6821 or mbeugster@varnumlaw.com.

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