A cornerstone moment occurred in 2006 for California’s climate accountability history with the passage of the California Global Warming Solutions Act, also known as AB 32.
The state passed this law as part of its overarching goal to reduce greenhouse (GHG) emissions and reach a net-zero future. Home to the largest state economy in the U.S., it was crucial for California to continue the state’s thriving business in a sustainable manner. As the first bill of its kind within the state to address climate change, AB 32 requires the entire state of California to reduce its GHG emissions to the state’s 1990 emissions levels by 2020. This goal was achieved in 2016, four years early.
Mandatory Reporting of Greenhouse Gas Emissions (MRR)
Following the passage of AB 32, the creation of the Mandatory Reporting of Greenhouse Gas Emissions (MRR) serves as the state’s regulating disclosure program. The California Air Resources Board (CARB) operates as the MMR’s governing agency by which GHG data reports must be submitted by participating organizations. CARB also serves as the primary agent for reporting, verification, monitoring, and enforcement. Major GHG emitters, including fuel suppliers, industrial sources, and electricity importers that emit over 10,000 metric tons of C02e, are required to participate annually in MMR. Third-party verification is required by a CARB-accredited independent verifier.
The GHG Reporting Process
Your company’s emissions data must be reported through CARB’s electronic Greenhouse Gas Reporting Tool (Cal e-GGRT), an online reporting database. Several aspects of the reported data will be familiar if your facility is captured under other regulatory rules. The CARB reporting methodologies are in compliance with (and incorporate by reference) the U.S. EPA Part 98 GHG Regulations. For each general stationary fuel combustion unit, you need to calculate the annual GHG emissions in metric tons using any of the relevant calculation methodologies specified. It’s important to note that CO2 emissions from the combustion of biomass must be separated out and reported under a different subpart. However, your covered emissions will include the portion of those biofuel emissions associated with CH4 and N2O from biomass combustion.
Step 1: Data entry
The amount of fuel(s) combusted and resultant emissions will be entered into Cal e-GGRT along with basic facility details. The most common type of report for General Stationary Combustion serves as the foundation for all facility reporting requirements. Under the CARB rules, there are additional non-emissions data that may be required as well, such as purchased electricity, or net and gross power generation.
Beyond these base requirements, if your facility produces one of the products categorized here, the CARB GHG mandatory reporting program will require a detailed accounting of the type and amount of relevant materials and/or products generated during the calendar year.
Step 2: Review and analysis
Once you have compiled all the required data, a secondary review is critical to ensure that there are no errors, omissions, and/or misstatements. Catching any problems early can help prevent untimely delays during the verification audit process and may help you understand which aspects of your inventory have the greatest risk of error. Complicated data sources, or organizations with a data gathering and handling process that goes through multiple data owners, are the natural first data sets that require secondary review.
Anecdotally, the most common reporting errors are associated with human error. One misplaced digit during data entry can introduce an order of magnitude error that can complicate your entire reporting process. Similarly, inclusion or exclusion of mandatory non-emissions data or misinterpretation of regulatory guidance on calculation methodologies contained in California’s Mandatory GHG emissions reporting process should be reviewed prior to submitting your GHG emissions data.
Step 3: Submitting
Once you are ready to submit, CARB has provided this roadmap document for GHG data reports. After logging in from the Cal e-GGRT home page, you will select a facility or supplier for which to generate and submit your annual GHG report. Once you open the reporting facility, generate the report by clicking on the “Generate/Resubmit” button. Note that your report is not actually submitted via this step. Rather, this is your starting point for the initial submission, as well as any revisions that need to be made prior to or during verification. Follow the prompts provided to add relevant details as required by the Mandatory Reporting of Greenhouse Gas Emissions regulation and supporting guidance documents.
Step 4: Review
After all the GHG reporting steps have been completed within Cal e-GGRT, you will be prompted to preview your facility report. Do not skip this opportunity to double-check all submitted data against your internal tracking and reporting records. If your report preview is acceptable, click the “Submit/Certify” button, which will send you to the final account confirmation login and certification statement. Once submitted, your report will be locked for verification; if your Verification Body requests revisions, they will unlock the tool for your revisions. (Per CARB guidance, you should not affiliate with any Verifier until you’ve received notification of an approved Conflict of Interest assessment.)
Accurate tracking and analysis of emissions data is the key to your organization’s mandatory GHG reporting success. California is home to one of the most aggressive GHG reduction plans in the U.S. The decarbonization of the economy is a top priority for the U.S. and is reflected in recent rulings from the Security and Exchange Commission (SEC) as well as mandates from the federal government such as the Inflation Reduction Act.
With net zero operations quickly becoming a requirement for businesses rather than a luxury, organizations that set a strong foundation of data and reporting will set themselves up for business continuity and success. Getting a head start on emissions reporting will also communicate transparency and sustainability efforts to your stakeholders and consumers while setting a basis for easy reporting in the future.
Cameron-Cole is a CARB-accredited verification body with over 500 GHG verifications and more than 40 years of GHG verification experience. Contact us for more information on your reporting requirements.