[Federal Register Volume 70, Number 56 (Thursday, March 24, 2005)]
[Rules and Regulations]
[Pages 15164-15169]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5606]



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Part II





Department of Energy





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10 CFR Part 300



Voluntary Greenhouse Gas Reporting; Interim Final Rules

  Federal Register / Vol. 70, No. 56 / Thursday, March 24, 2005 / Rules 
and Regulations  

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DEPARTMENT OF ENERGY

10 CFR Part 300


Voluntary Greenhouse Gas Reporting

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

ACTION: Notice of availability and opportunity to comment.

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SUMMARY: The Department of Energy (DOE) today gives notice that draft 
Technical Guidelines for the revised Voluntary Reporting of Greenhouse 
Gases Program are available for review and comment. DOE will hold a 
public workshop to receive stakeholder views on the draft Technical 
Guidelines, as well as the interim final General Guidelines that DOE is 
publishing in the Rules and Regulations section of today's issue of the 
Federal Register. In addition, DOE and the United States Department of 
Agriculture will jointly hold a public workshop to receive stakeholder 
views on the draft Technical Guidelines for Agriculture and Forestry 
and related interim final General Guidelines.

DATES: Written comments must be received by May 23, 2005. The DOE 
public workshop will be held on April 26 from 8 a.m. to 5 p.m. and on 
April 27, from 8 a.m. to 12 noon. The public workshop on agricultural 
and forestry issues, jointly sponsored by DOE and the U.S. Department 
of Agriculture, will be held on May 5, 8 a.m. to 5 p.m.

ADDRESSES: Send e-mail comments to: 
[email protected]. Alternatively, written comments 
may be sent to: Mark Friedrichs, PI-40; Office of Policy and 
International Affairs; U.S. Department of Energy; 1000 Independence 
Ave., SW., Washington, DC 20585. The DOE public workshop will be held 
at the following location: Crystal City Marriott Hotel at Reagan 
National Airport, 1999 Jefferson Davis Highway, Arlington, Virginia 
22202.
    Persons interested in registering for, or in obtaining more 
information about, this workshop should visit the following Web site: 
http://www.pi.energy.gov/enhancingGHGregistry/workshops.
    The joint DOE/USDA workshop for Agriculture and Forestry will be 
held on May 5 at the following location: USDA-APHIS Conference Center, 
4700 River Road, Riverdale, MD.
    Persons interested in registering for this workshop or in obtaining 
more information about USDA's efforts to develop accounting rules and 
guidelines for forestry and agriculture should visit the following Web 
site: http://www.usda.gov/agency/oce/gcpo/greenhousegasreporting.htm.
    You may obtain electronic copies of this notice, the draft 
Technical Guidelines and other related documents, find additional 
information about the planned workshops, and review comments received 
by DOE and the workshop transcripts at the following Web site: http://www.pi.energy.gov/enhancingGHGregistry/. Those without internet access 
may access this information by visiting the DOE Freedom of Information 
Reading Room, Rm. 1E-190, 1000 Independence Avenue, SW., Washington, 
DC, 202-586-3142, between the hours of 9 a.m. and 4 p.m., Monday to 
Friday, except Federal holidays.

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 e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    Section 1605(b) of the Energy Policy Act of 1992 directed DOE, 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)). A specific purpose of the program is to enable the 
entities to report reductions of greenhouse gases. Section 1605(b) 
directs DOE to issue guidelines, after opportunity for public comment, 
that establish procedures for the voluntary reporting of specific 
greenhouse gas emissions information. In 1994, DOE issued General 
Guidelines and sector-specific guidelines, and EIA issued reporting 
forms, for the Voluntary Reporting of Greenhouse Gases Program.
    On February 14, 2002, the President, as part of a larger initiative 
to address the issue of global climate change, 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 Voluntary Reporting 
of Greenhouse Gases Program. These improvements are to enhance 
measurement accuracy, reliability, and verifiability, working with and 
taking into account emerging domestic and international approaches.
    On December 5, 2003, DOE proposed revised General Guidelines for 
the Voluntary Reporting of Greenhouse Gases Program and, 
simultaneously, announced that it intended to develop for public 
comment Technical Guidelines that would specify the methods and factors 
to be used in measuring and estimating greenhouse gas emissions, 
emission reductions, and carbon sequestration (68 FR 68204-05).
    DOE is today making draft Technical Guidelines available for review 
and public comment. The draft Technical Guidelines complement and are 
inter-related with the interim final revised General Guidelines that 
DOE is publishing in the Rules and Regulations section of today's issue 
of the Federal Register. When issued as final, the revised General 
Guidelines and the Technical Guidelines, together with new reporting 
forms being developed by EIA, will fully implement the revised 
Voluntary Reporting of Greenhouse Gases Program.
    The draft Technical Guidelines have three parts:
     Emissions Inventory Guidelines (Chapter 1), which includes 
detailed guidance on how to measure or estimate greenhouse gas 
emissions;
     Emission Reductions Guidelines (Chapter 2), which includes 
guidance on the selection and application of emission reduction 
calculation methods, including the establishment and modifications of 
base periods and base values; and
     Glossary, which defines terms used only in the Technical 
Guidelines and references the definitions in section 300.2 of the 
General Guidelines.
    Components of the guidelines relevant for agriculture and forestry 
reporting have been shared with a selected set of evaluators with 
experience in greenhouse gas mitigation technologies in agriculture and 
forestry. The evaluators' views on the technical components and 
operability of the draft Technical Guidelines as they relate to the 
agriculture and forestry sectors will be made available during the 
public review process.

II. Summary of Draft Technical Guidelines and Issues for Comment

    The following discussion summarizes the content of the draft 
Technical Guidelines and identifies key issues upon which DOE would 
like to focus public review and comment.

1. Emission Inventory Guidelines (Chapter 1)

    The Inventory Chapter identifies and rates methods for estimating 
emissions and sequestration from a wide range of sources. These 
guidelines build on (and reference) several publicly available 
documents related to the development

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of emissions inventories. The Inventory Chapter consists of nine 
sections covering the major sources of greenhouse gas emissions: 
Overview; Collecting Information; Stationary Combustion; 
Transportation; Industrial Processes; Indirect Emissions; Engineered 
Sequestration; Agricultural Emissions and Sequestration; Forestry 
Emissions and Sequestration. The Agriculture and Forestry sections 
include technical appendices that can be found at the following Web 
site: http://www.usda.gov/oce/gcpo/greenhousegasreporting.
    a. Emissions Rating System. As described in the preamble to the 
interim final General Guidelines (see section II. C. vi.), the 
emissions rating system ordinally rates estimation methods and is based 
on four criteria: Accuracy, reliability, verifiability and practical 
application. The best available method is rated ``A,'' and given a 
value of four points. The next best method is rated ``B'' and given a 
value of three points; the next best is rated ``C'' and given a value 
of two points; and the least accurate method is rated ``D'' and given a 
value of 1 point. If a reporter is seeking to register reductions, the 
weighted average rating for emissions for the years used to calculate 
such reductions must be 3.0 or greater. Comments are invited regarding 
the ordinal rating system in general (including comparisons with other 
systems, such as a cardinal rating system); the appropriateness of the 
estimation methods specifically identified and their assigned ratings; 
and other methods not covered in the draft Technical Guidelines.
    b. Alternative Inventory Methods. The revised General Guidelines 
require reporters to use methods described in the Draft Technical 
Guidelines, unless an alternative method has been specifically approved 
by the Department (see Sec.  300.6(c) of the revised General 
Guidelines). If a reporter wishes to propose the use of a method that 
is not described in the Draft Technical Guidelines, the reporter must 
submit to DOE a description of the method, an explanation of how the 
method is implemented (including information requirements), and 
empirical evidence of the method's validity and accuracy.
    c. Inventories of Indirect Energy. DOE believes that the indirect 
emissions reflected in entity inventories should reflect, where 
practicable, the average emissions rate of the power being purchased. 
Since the average emissions rates of electricity generation vary widely 
by region, Chapter 1 of the draft Technical Guidelines specifies that 
entities reporting inventories of indirect emissions associated with 
the purchase of electricity within the U.S. must use regional values 
specified by EIA that correspond to the average emission rates of power 
generated within each of the twelve North American Electricity Reliable 
Council regions. Comparable methods for determining the emission rates 
of non-U.S. power generation must be used to estimate the indirect 
emissions from non-U.S. operations. If the entity's purchase contract 
specifies that the electricity supplied is from particular power 
generation sources, then it may use an emission coefficient that 
corresponds to these specific sources. However, entities should note 
that the emission reduction guidelines contained in Chapter 2 specify 
the use of a single emission coefficient for purchased electricity, 
based on the national average emissions rate for the electric sector as 
a whole. DOE believes that the national average emissions rate is a 
better indicator of the emission reductions resulting from reduced 
demand for electricity than are the regional values used in the 
development of emission inventories. This means that the indirect 
emissions associated with purchased electricity will differ depending 
on whether they are part of the entity's emissions inventory or 
emission reduction assessment. DOE specifically solicits comments on 
the effects of specifying the use of different emission coefficients 
for emission inventories and emission reductions.
    One form of electricity demand, the losses associated with 
electricity transmission and distribution, is not explicitly addressed 
in the draft Technical Guidelines for emission inventories, although 
the emission reduction guidelines identify an action-specific method 
for calculating the emission reductions that result from reducing such 
losses. DOE solicits recommendations on appropriate methods for 
measuring or estimating such losses that would permit the associated 
emissions to be included in entity inventories.

2. Emission Reduction Guidelines (Chapter 2)

    This chapter of the draft Technical Guidelines provides detailed 
guidance on the calculation of emission reductions as described in 
section 300.8 of the revised General Guidelines.
    a. Choosing calculation methods and identifying subentities. The 
first step in the process of calculating emission reductions is the 
selection of the appropriate calculation method and the identification 
of the subentities, if necessary, depending on the number of 
calculation methods needed to capture the entity's total reductions. As 
entities change, it may be necessary to add or modify subentities. This 
part of the process is described in detail in section 2.2.3 of the 
Emission Reductions Guidelines.
    The guidance on the selection of appropriate emission reduction 
calculation methods makes clear that the five methods identified in the 
revised General Guidelines usually have specific applications and are 
not generally interchangeable. Any entity that is using more than one 
method of calculating emission reductions must identify a distinct 
subentity for each method used. As entities change, it may be necessary 
to add or modify subentities, so this section also provides guidance on 
this process.
    b. Base periods. The determination of emission reductions requires 
that current levels of emissions or some other measure be compared with 
a comparable measure for some previous year or time period of up to 
four years, referred to as the base period. Chapter 2 of the draft 
Technical Guidelines describes how to establish base periods and the 
circumstances under which they can be changed.
    DOE permits this flexibility in defining the base period so that 
reporters can select the time period that is most representative of the 
actual past operations of the entity or subentity for which reductions 
are being estimated. However, DOE does limit this flexibility by 
requiring the last year of the base period to be the year immediately 
preceding the first year of reported reductions. Once established, the 
base period should remain fixed unless changes in the entity or its 
output require a change to the base period. For entities that intend to 
register reductions, all initial base periods must end in the start 
year. This requirement will limit the ability of reporters to select a 
base period for which a particular subentity had the highest emissions 
or emissions intensity in order to maximize the amount of emission 
reductions.
    Reporters are permitted to change the base period used to calculate 
reductions for an entity or subentity in a subsequent reporting year 
only under limited circumstances where there has been a fundamental 
change in the activity or structure of the entity or subentity.
    Public comment is specifically solicited on the flexibility to set 
and modify base periods, as well as on limits to this flexibility, 
which are designed to reduce the likelihood that reporters will 
manipulate base periods in order to maximize emission reductions.

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    c. Base Values. A base value is the emissions level, emissions 
intensity or other value to which a comparable reporting year value is 
compared in order to calculate an emission reduction. A base value can 
be a historic emissions level, historic emissions intensity, carbon 
stock, benchmark emissions intensity or other quantity. The Emission 
Reduction Guidelines describe how to establish base values and the 
circumstances under which they can be changed.
    DOE believes that base values should be derived from or be directly 
correlated to historic data to ensure that registered reductions 
represent real reductions relative to past emissions or emissions 
intensity levels. In some cases, the draft Technical Guidelines specify 
the use of a benchmark provided by DOE or calculated by the reporting 
entity according the DOE's guidelines. DOE solicits comment on whether 
or not reporters should be given the flexibility to establish base 
values that are more stringent than (usually lower than) the base 
values derived from actual performance during the base period. While a 
more stringent base value would reduce the quantity of registered 
reductions for which an entity qualified, such flexibility would enable 
entities to use as the basis for calculating emission reductions an 
emissions intensity or technology threshold that might be more 
meaningful or relevant to their industry.
    If the base value is based on historic conditions, it represents 
the emissions or emissions intensity in the base period of the entity 
or subentity as it is configured in the reporting year. The base value 
must be adjusted to reflect the acquisition and divestiture of business 
units and the insourcing and outsourcing of emissions-producing 
activities that has occurred since the base period. Such adjustments to 
the base value are necessary to ensure that the comparison between base 
period and reporting year emissions or emissions intensity is valid and 
the difference in emission or emissions intensity are not due to 
changes in the boundary of the entity or subentity. Without such 
adjustments, a reporter would be able to achieve a nominal reduction in 
emissions intensity by outsourcing an activity and related emissions 
sources contributing to the output of the entity or subentity. 
Likewise, a reporter could be penalized for insourcing emissions-
producing activities that it previously purchased from outside sources.
    Public comment is solicited on the flexibility to set and modify 
base values, as well as on limits to this flexibility, which are 
designed to reduce the likelihood that reporters will manipulate base 
periods in order to maximize emission reductions.
    d. Method-specific guidance. The Emission Reduction Guidelines 
provide detailed guidance for each of the five calculation methods 
identified in section 300.8 of the revised General Guidelines.
    i. Emissions intensity. This section of the draft Technical 
Guidelines provides detailed guidance on the use of emission intensity 
methods to calculate emission reductions.
    Greenhouse gas intensity metrics, which measure improvements in 
emission intensity independent of economic growth or growth in 
production, use either a physical or an economic value for the 
denominator. The draft Technical Guidelines provide a list of criteria 
to assist reporters in selecting output metrics.
    A number of trade associations and manufacturers were interviewed 
to test their comfort with physical metrics, and any desire to use 
composites or indices. Based on their responses, and comments from 
stakeholders at workshops and in writing, DOE has decided to urge the 
use of physical metrics; however, in some cases the use of physical 
metrics becomes increasingly difficult and the use of economic metrics 
may be an appropriate alternative * * * Section 2.4.1.1 of the draft 
Technical Guidelines lists acceptable measures of physical output to 
assist potential reporters. Public comment is specifically solicited on 
this list and the need for additional efforts to standardize the 
definition and application of output metrics.
    ii. Absolute emissions. The change in absolute emissions method for 
calculating reductions compares an entity's current (reduction year) 
emissions with its emissions in the base period. However, when using 
this method, entities must demonstrate that any emission reductions 
have not been caused by reductions in the entity's output. This section 
of the draft Technical Guidelines provides further guidance on how to 
calculate emission reductions using this method.
    To demonstrate that its output has not declined, a reporting entity 
must identify a physical or economic measure of the entity's activity 
that can serve as a sufficiently credible proxy for output. The 
relationship between this activity measure and entity output needs to 
be sufficiently close to indicate the direction of the change in 
activity. The draft guidelines describe some of the acceptable activity 
measures that might be used for this purpose.
    Base period emissions used to calculate changes in absolute 
emissions must be adjusted to reflect boundary changes, including 
acquisition and divestiture of emission sources and outsourcing or 
insourcing of emissions-producing activities that existed during the 
base period. Base period emissions may include emissions from sources 
that are no longer emitting in the reduction year. However, no 
adjustment may be made to base period emissions resulting from the 
addition of new emissions sources unless the reporter can demonstrate 
that the addition of this source represents the insourcing or 
acquisition of an activity previously conducted by another entity, 
rather than the expansion of the existing activity of the entity (also 
referred to as organic growth).
    This approach to calculating emission reductions from changes in 
absolute emissions is similar to the approach specified in the 
Greenhouse Gas Protocol developed by WRI/WBCSD, with the proviso that 
this method cannot be used if the entity's output has declined during 
the reporting period.
    iii. Avoided emissions. Only entities or subentities that do not 
have emissions in their chosen base period may rely exclusively on the 
method specified in the Draft Technical Guidelines for calculating 
avoided emissions. Most entities that generate and export (sell) 
electricity, heat or hot/chilled water must use either changes in 
absolute emissions or a method that combines the consideration of 
changes in emissions intensity and changes in avoided emissions, which 
is described below and in section 2.4.6 of the draft Technical 
Guidelines.
    Avoided Emission Benchmarks and Indirect Emission Coefficients. The 
draft Technical Guidelines specify various benchmarks that must be used 
in the calculation of reductions associated with avoided emissions. For 
electricity, the draft Technical Guidelines explain that an avoided 
emissions benchmark will be specified by EIA based on the average 
emissions intensity of the U.S. electric sector. Comparable benchmarks 
must be used by entities when reporting emissions reductions generated 
outside the United States. During the development of the draft 
Technical Guidelines, a number of alternative methods for establishing 
such benchmarks were considered. In theory, such benchmarks should 
approximate the emissions being displaced by the incremental generation 
of power from low or no emitting sources. However, there is no accepted 
methodology for identifying such marginal emissions. Various possible 
methods were explored, but none yielded values that were considered 
more reliable or useful

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than the U.S. average emissions intensity value ultimately included in 
the draft Technical Guidelines. DOE specifically solicits comments on 
the selection of this benchmark value and the related benchmarks 
described in the draft Technical Guidelines.
    iv. Carbon storage. DOE received comments proposing up-front 
registration of forest carbon sequestration. Forestry projects 
generally have high up-front costs with carbon sequestration benefits 
that accumulate gradually over long time frames. High initial costs 
coupled with delayed benefits may discourage forestry projects as well 
as other similar long-term investments. Up-front registration may over-
or under-estimate actual sequestration over the lifetime of a project 
because it is based on estimated actions and timelines. DOE has decided 
not to adopt the proposed up-front registration of forest 
sequestration. DOE solicits additional comments on including provisions 
that would allow early recognition of long term carbon sequestration 
benefits.
    The draft Technical Guidelines describe the procedures that should 
be followed to calculate annual volumes of reductions associated with 
increases in carbon stocks.
    (1) Reductions from increases in terrestrial carbon stocks (forest, 
agriculture, rangelands). The terrestrial carbon pools described in the 
draft Technical Guidelines include forest trees, forest under-story, 
forest dead and downed wood (on-site), forest floor, forest soils, 
agricultural soils, range soils, and grazing land soils. Absolute 
increases in terrestrial carbon stocks can contribute to an entity's 
registered reductions. In addition, the draft Technical Guidelines 
specify how reductions associated with these pools should be treated 
when the reported lands are sold, purchased, converted to other uses, 
certified as sustainably managed, considered incidental lands, or 
affected by a natural disturbance.
    Carbon losses associated with natural disturbance are generally 
beyond the control of landowners. In the interest of not penalizing 
entities for such uncontrollable losses, DOE has included the following 
provision for accounting for natural disturbance in emission reductions 
calculations in the draft Technical Guidelines:

    Entities that experience natural disturbance such as wildfire, 
pests, or extreme weather, can choose to separately account for the 
carbon stock losses associated with these natural phenomena. In this 
case, entities will report the disturbance-associated carbon stock 
changes as a separate item in their terrestrial carbon stock 
inventory; however, they will not include the carbon stock changes 
in their calculation of reductions. Entities will continue to track 
carbon stocks on the identified land in their inventory. Until the 
carbon stocks return to pre-disturbance levels, carbon fluxes on 
lands that have undergone disturbances cannot be included in 
calculating reductions.

    (2) Reductions from increases in carbon stored in wood products. 
Significant quantities of carbon harvested from forest systems can be 
stored for long periods in the form of wood products or in materials 
deposited in landfills. Entities reporting changes in terrestrial 
carbon can include the expected storage of carbon in the wood products 
pool in their estimates of annual carbon stock changes. The draft 
Technical Guidelines describe two approaches for estimating the amount 
of carbon stored in the wood products pool. Entities may estimate the 
decay of materials stored in wood products over time and account for 
the carbon stock losses in the year in which they occur. Alternatively, 
entities may calculate the amount of carbon expected to remain in 
products and landfills after a 100-year period and include this amount 
in their terrestrial carbon stock inventory. The latter approach is 
intended to limit the complexity associated with tracking annual decay 
rates in the wood products pool. Recognizing that the simpler approach 
uses a 100-year time frame and does not reflect actual annual 
fluctuations in carbon storage, the method is included with the 
understanding that it cannot over-estimate carbon stored in wood 
products. Public comments on this option are specifically solicited.
    (3) Reductions from the preservation of existing carbon stocks. 
Actions to legally protect existing terrestrial carbon stocks can 
result in emissions of greenhouse gases being avoided. While it is 
difficult to know with certainty if or when carbon that is currently 
stored in terrestrial systems will be released in the future, it is 
probable that actions to ensure the protection of existing stocks will 
result in greenhouse gas benefits in the future. As a consequence, the 
1605(b) program would allow entities to register reductions associated 
with actions taken to protect existing terrestrial carbon stocks, 
equivalent to 1/100th of the start year carbon stocks in each reporting 
year. This provision requires an entity to document the action and 
follow the draft Technical Guidelines for estimating and reporting 
annual carbon stocks on legally protected lands.
    v. Action-specific. There are a number of circumstances under which 
reporters may undertake specific actions (often referred to as 
``projects'') that yield emission reductions that cannot be quantified 
using any of the other measurement or estimation methods provided for 
in the guidelines. In such cases, reporting entities would have to 
follow the guidance provided in section 2.4.5 of the draft Technical 
Guidelines.
    There are a number of action-specific reductions that do not allow 
reporters to develop an estimate of base-year emissions based on an 
extant technology or process and base-year activity levels. DOE has 
provided guidance in the draft Technical Guidelines for a limited 
positive list of such action-specific reductions (see section 2.4.5.6). 
This positive list of actions includes: coalmine degasification; 
landfill methane recovery; transmission and distribution improvements; 
and geologic sequestration.
    DOE solicits recommendations on other specific actions for which 
guidance should be provided.
    There are other actions that have been reported to the current 
Voluntary Reporting of Greenhouse Gas Program that will not be eligible 
for registration as action-specific reductions. In some cases they 
might be reported as ``offsets'' under the revised guidelines, if the 
reporting entity enters into an agreement with the entity directly 
responsible for the reductions. In circumstances where no such 
agreement is feasible, the reduction would not qualify for 
registration. These actions typically fall within one of three 
categories:

--They result in avoided emissions from activities other than energy 
supply (increased use of less emissions intensive materials in 
manufactured products);
--They result in reduced emissions from highly diffuse sources (public 
education related to energy conservation); or
--The location and ownership of resulting reductions is impossible to 
determine (retail sales of discounted compact fluorescent bulbs).

    Actions that often fall into these categories include: Utility-
sponsored DSM programs; manufacturer improvement in the energy 
efficiency of products; employee commuting reduction; coal ash reuse; 
halogenated substance substitution; and materials recycling/source 
reductions. DOE seeks comment on the practicality of reporting these 
actions directly or as offsets, and suggestions on estimation methods 
that would mitigate the constraints identified above and allow 
reductions from a broader range of such actions to

[[Page 15168]]

be reported. In particular, DOE is open to future consideration of 
practical methods, consistent with the structure and objectives of the 
revised guidelines, to enable manufacturers of more energy efficient 
products to register the emission reductions resulting from the use of 
these products. DOE recognizes that product manufacturers often play an 
important role in accelerating the introduction of new, more energy 
efficient technologies, and that the revised guidelines might be 
designed to enable such manufacturers to register such emission 
reductions under certain circumstances. In theory, such reductions 
might be reported as offsets, but this would require an agreement 
between the manufacturer and the end-user, and the reporting 
requirements contained in the revised guidelines would likely 
discourage such arrangements. Further, some of the improvements in 
product efficiency are mandated by Federal law.
    vi. Estimating Reductions Associated with Energy Exports. Entities 
that export (sell) electricity, steam or hot/chilled water and have 
emissions in their base period must calculate emission reductions using 
either changes in absolute emission reductions or a method that 
combines the consideration of changes in emissions intensity and 
avoided emissions. This combined method, described below and in section 
2.4.6 of the draft Technical Guidelines, takes into account the effects 
of a wide range of actions that generators can take to reduce the 
emissions intensity of the generating sector. These actions can be 
categorized into two main types: (1) Those that reduce the emissions 
intensity of a generator's own, existing capacity, and (2) those that 
decrease generation from other, high-emissions intensity generators. 
DOE assessed the following four options for estimating the emission 
reductions in this sector in order to compare their ability to 
recognize reductions from both types of actions, and their tendency to 
favor or disadvantage generators according to their historical 
emissions rate. The four options were:
    (1) Average Intensity: Reductions would be calculated from the 
change in entity-wide, average emissions intensity from the base period 
to the reporting year.
    (2) Plant-by-Plant: Reductions would be calculated separately for 
each plant, either from changes in the emissions intensity of existing 
plants from the base period to the reporting year or from the emissions 
intensity of new plants compared to the emission intensity of a 
``benchmark'' emissions intensity value.
    (3) Existing and New Plants: Reductions would be calculated from 
the change in the average emissions intensity of existing plants from 
the base period to the reporting year; new plants would qualify for 
reductions if their emissions intensity was below a ``benchmark'' 
value.
    (4) Base and Incremental Generation: Reductions would be calculated 
from entity-wide, average emissions intensity calculated in two parts. 
For quantities of power that are equal to or less than the quantity 
generated in the base period, the emissions intensity value would be 
entity's average for its base period. For quantities in excess of the 
base period generated, the average emissions intensity would be the 
``benchmark'' value.
    For all four methods, emissions reductions are calculated by 
multiplying the difference between the appropriate base period and 
reporting year generation intensity values (CO2/MWh) by the 
reporting year generation (MWh).
    Following analysis and review, DOE concluded that Method 4 best 
serves the purposes of the program. Method 1 allows high emitting 
entities to register reductions for actions that do not reduce the 
emissions intensity of the power sector on the whole, while making it 
very difficult for low emitting entities to register reductions, even 
if they were taking actions that did reduce the emissions intensity of 
the power sector as a whole. Method 2 would not capture reductions for 
certain actions that do lead to sector-wide reductions, including 
shifting load to lower-emitting generators. Method 4 is preferable to 
Method 3 in that it is able to recognize the benefits of a broader 
range of load shifting actions and tends to treat generators with 
substantially different characteristics more `equitably'; increased 
generation output, for instance, is compared to the benchmark value 
regardless of whether it is from new capacity or increased output from 
existing generation. DOE solicits public comment on its selection of 
Method 4, Base and Incremental Generation, as the preferred method.
    Combined Heat and Power (CHP), and Thermal Energy Generators. Some 
energy generators distribute heating and/or cooling to multiple end 
users, either exclusively or in addition to electric power.
    Reductions from CHP or district heating/cooling systems are to be 
calculated using the same basic method specified for electricity 
generators, although reductions associated with electricity generation 
and with thermal generation must be calculated separately. Appropriate 
thermal energy benchmarks are to be specified by EIA or calculated by 
reporters according to guidelines provided by DOE. This approach would 
enable CHP and thermal energy generators to obtain recognition for 
reductions that result from a broad range of different actions, 
including increased generation (since most CHP plants are more 
efficient than conventional power and heat generation), fuel 
substitution or improved system performance.

III. Public Workshop

    A public workshop will be held to receive comment on all elements 
of the draft Technical Guidelines, as well as interim final General 
Guidelines that DOE is publishing in the Rules and Regulations section 
of today's issue of the Federal Register. DOE invites any person who 
has an interest in the draft Technical Guidelines and revised General 
Guidelines to participate in this workshop. Because space is 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://www.pi.energy.gov/enhancingGHGregistry/draftTechnicalGuidelines.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://www.pi.energy.gov/enhancingGHGregistry/draftTechnicalGuidelines.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.

[[Page 15169]]

Joint DOE/USDA Workshop

    DOE and USDA invite persons interested in the draft Technical 
Guidelines for Agriculture and Forestry and related revised General 
Guidelines to participate in this workshop. The workshop will provide 
an overview of the draft technical guidelines for agriculture and 
forestry sources and sinks, opportunities to ask questions about the 
proposed methods, and opportunities to discuss specific issues. Persons 
interested in registering for the meetings or in obtaining more 
information about USDA's efforts to develop accounting rules and 
guidelines for forestry and agriculture should visit the following Web 
site: http://www.usda.gov/agency/oce/gcpo/greenhousegasreporting.htm.
    The Web site will also be used to make available draft and final 
meeting agendas, information on lodging, or other information made 
available before the meetings. Inquiries regarding the logistics for 
this meeting may be e-mailed to [email protected].

IV. Forms

    EIA, which is responsible for the operation of the 1605(b) program, 
is preparing a set of draft forms for reporting under the revised 
guidelines. Pursuant to the Paperwork Reduction Act of 1995, EIA plans 
to issue a Federal Register notice soliciting public comment on these 
draft forms as soon as practicable and to complete the comment review, 
and revisions resulting from that review, before the effective date of 
the guidelines.

    Issued in Washington, DC, on March 16, 2005.
Karen A. Harbert,
Assistant Secretary for Policy and International Affairs.
[FR Doc. 05-5606 Filed 3-23-05; 8:45 am]
BILLING CODE 6450-01-P