DRAFT - DELIBERATIVE - DO NOT CITE Overview EPA's Inventory of U S Greenhouse Gas GHG Emissions and Sinks Inventory is the primary mechanism for demonstrating that the United States is a world leader in reducing greenhouse gas emissions while growing the economy EPA has been compiling the Inventory on behalf of the federal government and in cooperation with other federal agencies since 1993 The Inventory is widely used across the federal government industry state agencies and other organizations EPA spends approximately $1 5 million per year to publish the National and State Inventories as a transparent trusted sources of data If EPA were to discontinue publishing these Inventories other entities such as the Environmental Defense Fund the Rhodium Group or the World Resources Institute would likely publish alternative estimates that would not have the same level of transparency peer review stakeholder inclusion or documentation Further it is likely industry stakeholders such as API AGA the American Iron and Steel Association and the American Farm Bureau would raise concerns if EPA were to discontinue publication of the Inventory Industry views EPA's Inventory data as an unbiased source that demonstrates their emission reductions over time see Appendix B Furthermore since States rely on Inventory data to meet state-legislated greenhouse gas inventories e g Iowa Nevada it is likely that in the absence of a standardized national approach States would use inconsistent approaches to developing inventories see Appendix C leading to challenges for States in comparing data and understanding the impacts of policy and programmatic efforts Differences in methodological and accounting approaches by States inevitably lead to doublecounting and gaps in emissions estimation particularly with respect to mobile sources and fugitive methane emissions The draft 2025 Inventory shows that net total emissions have declined 20% over the last 20 years while the economy has grown 41 percent Over that same period U S energy-related emissions decreased 21% while energy production increased 53 percent The rigor and transparency of the Inventory has made it possible for the U S to pressure trade competitors such as China India and Brazil to disclose their emissions and ensure valid comparisons of performance across countries Without the U S example trade competitors would likely backslide on their obligations and international comparisons would have to rely on lower quality United Nations International Energy Agency data for carbon dioxide emissions and simplified global averages for non-CO2 emissions that do not reflect U S achievements in reducing emissions Uses of the Inventory • Statutory obligations o The Inventory satisfies the U S legal obligation for Parties to the UNFCCC Treaty ratified by the Senate in 1992 to submit and update national greenhouse gas inventories • Rulemakings Regulatory Analysis o The Inventory supports Clean Air Act rulemaking analyses by providing robust national level emissions data for contextualizing the size and impact of emissions from various economic sectors In the absence of the Inventory EPA would not have a reliable widely-accepted data source for characterizing economy-wide U S greenhouse gas emissions and sinks to determine whether emission sources meet significance thresholds e g for NSPS Page 1 of 8 ED_018922_00001520-00001 DRAFT - DELIBERATIVE - DO NOT CITE categories Stakeholders disagreeing with EPA GHG related rulemaking proposals would likely claim weaknesses in the GHG data foundation as part of their public comments o IRS's 45V 48E tax credit final rule 1 explicitly cites the use of the Inventory power sector data as the metric for triggering the eventual phase-out of tax credits when emissions from the power sector are equal to or less than 25 percent of 2022 levels • Economic modeling o Inventory data is used to calibrate a large number and variety of EPA and open-source economic models EPA examples include the Non-CO2 GHG Projections and Mitigation Cost Models and the Vintaging Model all of which are used to support the development of EPA technical reports and EPA rulemakings while the non-CO2 models provide important data sets used in many open-source economic models Open-source examples include energyeconomic models e g Pacific Northwest National Lab's Global Change Analysis Model GCAM and Purdue University's Global Trade Analysis Project GTAP and lifecycle models e g Argonne National Laboratory's Greenhouse gases Regulated Emissions and Energy use in Technologies GREET model which are used to support EPA rulemakings and IRS tax credits In the absence of Inventory data models would use a wide range of alternative sources some of which are proprietary and less reliable in terms of frequency of publication so also potentially dated or less transparent on how they are compiled The outcome would be a lack of comparability interpretability and confidence in results o OAQPS's emissions modeling platform 2022v1 Platform relies on Inventory livestock data and supports states in emissions modeling to conduct NAAQS SIP modeling i e ozone PM2 5 The modeling platform relies on this data from the Inventory because it is comprehensive and complete time series data Estimation of accurate emissions from livestock management requires detailed characterization of livestock population and is compiled regularly for the Inventory using USDA's annual statistics in combination with other process growth models • Trade and Exports o Inventory data often can be used to show that U S manufacturing 2 is more efficient than production in other countries Without the inventory data countries validating U S manufacturer claims on carbon intensities e g for carbon border adjustment mechanisms CBAM would likely rely on estimates such as those from the International Energy Agency IEA which could disadvantage U S industries o DOE has used the Inventory for verifying the emission intensity of LNG exports which may be used to help demonstrate the low methane emissions rates required by the EU Methane Regulations 3 Under these regulations if national-level UNFCCC inventory data are unavailable it may be more difficult to exempt U S companies from requirements to quantify supply chain emissions Additionally the lack of data may make U S LNG less Federal Register Volume 90 Issue 9 January 15 2025 https www govinfo gov content pkg FR-2025-0115 pdf 2025-00196 pdf 2 For example see the U S International Trade Commission emission intensities for steel and aluminum HYPERLIN K https www usitc gov publications 332 pub5584_0 pdf 3 • https eur-lex europa eu legalcontent E N TXT u ri OJ L_20240178 7 pk_ cam pa ign todays_OJ pk_source EU RLEX pk_mediu m X pk_keywor d energy_sector pk_content Regulation pk_cid EURLEX_todaysOJ 1 Page 2 of 8 ED_018922_00001520-00002 DRAFT - DELIBERATIVE - DO NOT CITE attractive in other import markets e g Japan where emissions intensity is an important attribute • Benchmarking o o DOE technology development programs focused on lowering production costs for American farmers use Inventory data as the only available source of comprehensive data to benchmark for current levels of carbon stored in soils for calibrating soil carbon sensors The U S Bureau of Economic Analysis BEA reports data under the OECD's System of Environmental-Economic Accounting SEEA based on the Inventory There are over 90 countries that report this data including most OECD countries Without the Inventory there would be no reliable way to produce the data for the U S This reporting demonstrates how the U S has outperformed OECD in terms of emissions reductions using internationally harmonized methodologies and definitions While this has no direct impact on private U S companies it does provide consistent and comparable data that could be used for issues such as risk management investment supply chain management and compliance with regulations • Other Reporting o EIA's Annual Energy Outlook incorporates Inventory data into emissions projections without EPA factors the emission projections would be less accurate o USDA uses the Inventory in several ways Without EPA inventory data it would be harder for farmers ranchers and landowners to demonstrate the environmental and economic benefits of their operations As a result it could result in lower market value for their products and land as well as limit their ability to participate in emerging environmental service markets • USDA uses Inventory data as a metric to track the adoption effects of Natural Resources Conservation Service NRCSP conservation programs authorized under the Farm Bill and consistent with the Food Conservation and Energy Act of 2008 directing USDA to measure environmental service benefits from conservation and land management activities that facilitate the participation of farmers ranchers and landowners in emerging environmental services markets • USDA uses Inventory data methods and models in the Entity-Scale Methods Report required under Section 2709 of the Food Conservation and Energy Act of 2008 This report serves as the basis for the NRCS COMET-Farm decisionsupport tool allowing farmers to identify inefficiencies in their farming practices such as overuse of fertilizers or energy and adopt more efficient management practices that can reduce costs improve soil health raise crop yields and increase drought resilience • USDA uses Inventory data methods and models in the analyses that facilitates participation of farmers in biofuel markets consistent with E O s 14154 and 14156 The Inventory provided the data necessary for USDA's January 2025 interim rule on Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks and for the USDA Feedstock Carbon Intensity Calculator which allows biofuel feedstock producers to determine their eligibility and receive additional market value for low-carbon biofuel feedstocks • Organizations that support states such as the Association of Air Pollution Control Agencies AAPCA use the Inventory to show progress in reducing emissions in their annual report Page 3 of 8 ED_018922_00001520-00003 DRAFT - DELIBERATIVE - DO NOT CITE GHGRP and the Inventory The Inventory provides an aggregate picture of GHG emissions from all sources and sinks for the entire country and makes it possible to understand how U S emissions from various sectors are changing over time The Inventory is also the only tool for making comparisons with other countries Some Inventory estimates are based on aggregate national statistics e g automobiles while other estimates draw from information reported by individual facilities e g municipal solid waste landfills The Greenhouse Gas Reporting Program GHGRP in contrast receives data from the approximately 8 000 largest emitting facilities in the country making up just over one-half of total national emissions GHGRP data are a key input to many estimates in the Inventory providing higher accuracy and detail needed to track GHG reductions taking place in numerous industry sectors Without GHGRP data we would not be able capture these improvements and would both overestimate emissions and understate reductions In this context for significant sources 4 using GHGRP data in the Inventory the range of uncertainty collectively decreased with use of GHGRP data relative to use of pre-GHGRP methods by 60% NEI and the Inventory The GHG Inventory GHGI and National Emissions Inventory NEI are two distinct air emissions inventories in terms of purpose and scope compiled by EPA's OAR The GHGI compiles economy-wide greenhouse gas emission and sink data every year updating time series data starting in 1990 comprehensively covering all GHGs i e CO2 CH4 N2O HFCs PFCs SF6 and NF3 The GHGI tracks total national emissions and national trends over time and supports statutory obligations as a Party to the UNFCCC The NEI is compiled on a 3-year development cycle for a single year The current NEI is for 2020 with the 2023 NEI currently in development The NEI compiles emissions of criteria air pollutants CO PM SOx NOx Pb etc the precursors of criteria air pollutants e g NH3 VOCs and hazardous air pollutants HAPs submitted by state local and tribal agencies SLT under the Air Emissions Reporting Requirements AERR HYPERLINK https www ecfr gov current title-40 chapter-l subchapter-C part51 subpart-A NEI consolidates data collected to support air quality modeling and assessment of statutory goals See Appendix A for more information Landfills MSW and industrial natural gas systems CH4 and CO2 petroleum systems CH4 and CO2 active coal mines CH4 cement ammonia production and petrochemical production CO2 4 Page 4 of 8 ED_018922_00001520-00004 DRAFT - DELIBERATIVE - DO NOT CITE Appendix A Differences between the GHG Inventory and National Emissions Inventory NEI The GHG Inventory and NEI are two distinct air emissions inventories in terms of purpose and scope compiled by EPA's OAR OAP and OAQPS do coordinate and collaborate on data where applicable Scope National Emissions Inventory NEI GHG Inventory GHGI The NEI is compiled on a 3-year development cycle for a single year The current NEI is for 2020 with the 2023 NEI currently in development The NEI compiles emissions of criteria air pollutants the precursors of criteria air pollutants and hazardous air pollutants submitted by state local and tribal agencies under the Air Emissions Reporting Requirements HYPERLINK https www ecfr gov current title40 chapter-l subchapter-C part51 subpart-A The GHGI compiles economy-wide greenhouse gas emission and sink data every year updating time series data starting in 1990 comprehensively covering all GHGs i e CO2 CH4 N2O HFCs PFCs SF6 and NF3 The GHGI tracks total emissions and national trends over time and supports statutory obligations as a Party to the UNFCCC NEI consolidates data collected to support air quality modeling and assessment of statutory goals Approach Consolidates data submitted from SLT air agencies from large point sources non-point sources and event sources consistent with AERR reporting thresholds by pollutant While consolidated source data from different SLT agencies may not be consistent or comparable across states for the current NEI or previous NEI year etc The NEI is also not recalculated with each subsequent NEI Website https www epa gov air-emissionsinventories national-emissionsinventory-nei Compiled using consistent methods and data for sources across the time series for complete coverage of sources in the U S incorporating higher resolution data into methods where available e g use of GHGRP data The GHG Inventory is also re-evaluated every year so that impacts of updates are recalculated for the entire time series not just the current year as applicable https www epa gov ghgemissions inventoryus-greenhouse-gas-emissions-and-sinks Page 5 of 8 ED_018922_00001520-00005 DRAFT - DELIBERATIVE - DO NOT CITE Appendix B Industry Uses of Inventory • American Petroleum Institute API comment on 2024 GHGI - API supports timely and accurate reporting and transparency by the oil and natural gas industry - and all other emitting sectors of GHG emissions - through EPA's GHG Inventory GHGI - The U S is leading the world on energy production and emissions reductions and thanks to industry action methane emissions have fallen by 37% between 2015 and 2022 HYPERLINK https www api org news-policy-and-issues news 2024 11 12 api-statement-on-finalmethane-fee-rule I text The%20U S %20is%20Ieading%20the 37%25%20between%202015%20and%202022 • American Gas Association AGA comment on 2023 GHGI - We are pleased to see the Draft Inventory shows methane emissions from natural gas local distribution systems across the country declined by 70 percent from 1990 to 2021 The data reflect the work AGA member gas utilities have been doing to modernize their systems and implement best practices • American Iron and Steel Institute - The American steel industry is the cleanest of the leading steel industries in the world Of the major steel-producing countries the U S has the lowest CO2 emissions per ton of steel produced HYPERLINK https www steel org wp-content uploads 2023 06 American-SteelCarbon-Advantage-_-Final-2023_updated-June-6-2023 pdf - JL c ' ' _' And EPA data indicates that the production of iron steel and metallurgical coke in the U S amounted to less than one percent of national CO2 emissions compared to the global scale of total CO2 emissions from steel -which is nearly seven percent HYPERLINK https www steel org wp-content uploads 2021 03 Sustainability-Key-Messages pdf • US Chamber of Commerce Latest EPA GHG Inventory Shows Continued Progress on Emissions Reductions in 2019 See HYPERLINK https gcc02 safelinks protection outlook com url https%3A%2F%2Fwww uschamber com%2Freg ulations%2Flatest-epa-ghg-inventory-shows-continued-progress-emissions-reductions2019 data 05%7C02%7CDesai Mausami%40epa gov%7C4960f060b8ea4145a27708dd57514bed%7 C88b378b367484867acf976aacbeca6a7%7C0%7C0%7C638762728851581374%7CUnknown%7CTWF pbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsllYiOilwljAuMDAwMClsllAiOiJXaW4zMilslkFOljoiTWFpbCls lldUljoyfQ%3D%3D%7C0%7C%7C%7C sdata QstVxrEA96QqjfjK%2FibWyl%2B5QE%2FRl2%2BG%2B yCPHxXPmmQ%3D reserved 0 h L Few if any countries around the world have been able to reduce emissions while growing their economy as effectively as the United States In fact between 2005 and 2019 net economy-wide GHG emissions have fallen by 855 MMT CO2e-an amount far greater than that of any other country ever Moreover these emissions reductions have occurred alongside a growing economy-a recent break from historical norms For decades U S GHG emissions tended to rise in concert with population and economic growth but in the mid- late-2000s the trends decoupled What has driven this decoupling In two words natural gas and the shale revolution • American Farm Bureau Federation AFBF - The latest numbers demonstrate farmers' and ranchers' commitment to growing the food and fiber America's families rely on while improving the land air and water a benefit to the farm and Page 6 of 8 ED_018922_00001520-00006 DRAFT - DELIBERATIVE - DO NOT CITE the climate said AFBF President Zippy Duvall The drop in agricultural emissions highlights the success and importance of voluntary and market-based programs that support farmer efforts in sustainable agriculture practices The latest numbers should also serve as inspiration to lawmakers who can build on this progress by passing a farm bill which not only provides a safety net for farmers but also helps them meet sustainability goals HYPERLINK https www fb org news-release agriculture-em issions-fal l-to-lowest-levels-in-10-years h Page 7 of 8 ED_018922_00001520-00007 DRAFT - DELIBERATIVE - DO NOT CITE Appendix C States with GHG requirements that rely on EPA's U S GHG Inventory • Colorado Bill 19-096 requires the air quality control commission in the department of public health and environment department to develop and publish a statewide GHG inventory at minimum every two years • Iowa Code 455B 104 requires the Department of Natural Resources to report annual to the governor and general assembly on state-wide greenhouse gas emissions and trends • Pennsylvania 2008 Act 70 requires Pennsylvania's Department of Environmental Protection to develop an annual state-wide GHG Inventory • Under Maryland's Md Environment Code Ann § 2-1203 Department of the Environment is required to publish a statewide GHG emissions inventory every three years beginning 2011 New Hampshire relies on and links to EPA GHG Inventory data for state-wide estimates • • New Jersey per EO #54 shall provide on an annual basis a state-wide GHG Inventory New York has a statutory requirement to publish an annual report on statewide greenhouse gas emissions pursuant to Section 75-0105 of the Environmental Conservation Law GHGRP data are used in developing and updating methodologies but also annual GHGRP data are used in the reports such as for aluminum ferroalloy iron and steel lead cement semiconductor and other industries • Nevada NRS 445 389 requires the Department of Conservation and Natural Resources to issue at least every 4 years a statewide GHG inventory • North Carolina uses regular statewide inventory to benchmark progress for Session Law SL 2021-165 House Bill 951 Energy Solutions for North Carolina • Vermont has a statutorily requirement to publish an annual GHG inventory until 2028 10 V S A § 582 Vermont's Department of Environmental Conservation uses GHGRP data for industrial sectors such as semiconductor manufacturing • Washington requires a biennial state-wide GHG inventory per RCW 70 235 020 2 Page 8 of 8 ED_018922_00001520-00008