# June 5, 2002

# 

# Office of Policy and International Affairs

Office of Electricity and Natural Gas Analysis, PI-23

U.S. Department of Energy

Forrestal Building, Room 7H-034

1000 Independence Ave., SW

Washington, DC 20585

Attn: Voluntary Reporting Comments

Alcan applauds the Agency's effort to enhance the 1605(b) program and
appreciates this opportunity to provide comments. As background, Alcan
Aluminum Corporation is the U.S. subsidiary of Alcan, Inc. a
multinational leader in aluminum and specialty packaging with facilities
located in 38 countries. Alcan Aluminum Corporation is a manufacturer of
high quality aluminum products, with primary, fabricated and recycling
operations in the U.S. We welcome the opportunity to provide comments to
enhance the reporting requirements in an effort to establish integrity
for providing baseline protection and establishing the basis for
emissions trading. To this end, while there are numerous topics to
address as you develop the registry, key issues to include are:
determining reporting boundaries and verification of emissions data
including direct, indirect and other reductions; and ensuring a single
registry that will be recognized nationally and internationally.

As you may know, as part of the Voluntary Aluminum Industrial
Partnership with the EPA, we have gained a great deal of experience in
monitoring, reporting and mitigating greenhouse gas (GHG) emissions over
the last decade. Alcan has been reporting its PFC emission reductions in
the United States under 1605(b) since 1995. Further, Alcan has recently
announced its global greenhouse gas program with an initial reduction
commitment of an annual reduction of 500,000 tons by 2004. As part of
this effort we have conducted an extensive inventory of our direct and
indirect emissions and are currently developing protocols for verifying
our greenhouse gas emission reductions.

Based on our experience to date, the following are our initial
recommendations for improving the 1605(b) program.

First, we support the Aluminum Association's comments with regard to
providing a flexible framework protocol to be used by industries in
establishing GHG inventories and reporting. The industry is working on a
global level with the International Aluminum Institute's effort to
develop a global aluminum industry inventory and reporting protocol for
multiple GHG releases. Included in this protocol effort is the ongoing
review of the World Resources Institute "Greenhouse Gas Protocol" for
corporate accounting and reporting of multiple GHG release. With regard
to verification, we would note that all items reported should include
some type of credible verification or other guarantee sponsored by the
reporter. This verification could include the use of recognized experts,
confirmed application of recognized protocols, in-house financial or
environmental auditors, the provision of a contractual warrantee or
other contractual obligation ensuring quality of the process and the
resulting quantity reported. Un-validated inventory and reduction data
will be accepted into the registry; however, it would be classified as
such.

Further, we take this opportunity to emphasize that a market-oriented
registry should ensure legitimacy and fungibility of the tons it
accepts. In order to do so the registry must establish standard
measurements and estimation requirements recognized nationally and
internationally and ensure accountability for all tons recorded and
transacted. To best promote fungibility in the marketplace and provide
customers with confidence in the value of their transactions, a
consistent application of a standard set of measurement and estimation
requirements is essential. One key component of consistency is
delineation of direct, indirect and emissions reductions where the
ownership of the reduction has been legally established. To prevent
double-counting it is essential for a registry to keep these different
types of emissions clearly separated. We emphasize the potential of
"other emissions reductions" because of the importance of aluminum
recycling and product application to the overall net reduction of GHG
emissions. For example, through recycling aluminum, energy use and GHG
emissions are reduced by 95%. Also, for each ton of aluminum that
displaces the use of steel in a mid-size sedan, over the life cycle of
that automobile there is a net reduction of 20 tons of GHG emissions.
These reductions need to be recognized.

Finally, as a way to ensure comprehensive reporting and transparency and
guard against leakage, registrants need to be accepted on an U.S.-wide
basis. As well, to minimize reporting requirements, the registry needs
to serve all U.S. domestic, state and local level needs -- providing a
"one-window" point of contact for reporting entities. The registry also
must have the flexibility to accept and recognize international
emissions inventory and reduction data from entities, to support
international trading activities. Although entity-level reporting may be
required to support global market registry requirements, it may be
appropriate to register independent projects in sectors which would not
be expected to have sector-wide objectives. In such a case, an
independent baseline must be established and verified. This might
include credit generation for avoided emissions such as incremental
recycling or reduced emissions from consumer products.

We know there are numerous topics to address as you develop a registry
that will establish baseline protection and a basis for emissions
trading. We thank you for this opportunity to submit preliminary
comments. We welcome the opportunity for further discussion.

> Sincerely,
>
> Brenda Pulley
>
> Vice President
>
> Corporate and Government Affairs