![](media/image1.png){width="1.0465277777777777in"
height="0.4263888888888889in"} *Safety, Health & Environment Excellence
Center*

*1007 Market Street, DuPont 6082*

*Wilmington, DE 19898*

*302-773-0910 (Office) -- 302-774-3140 (Fax)*

February 17, 2004

Mark Friedrichs, PI-40

Office of Policy and International Affairs

U.S. Department of Energy

Room 1190

1000 Independence Ave., SW

Washington, DC 20585

10CFR PART 300, GENERAL GUIDELINES FOR VOLUNTARY GREENHOUSE GAS
REPORTING; PROPOSED RULE

### 

### DuPont Company Comments

Reference: 68 Federal Register, No.68, 68203-68231, December 5, 2003

Dear Sir:

DuPont is pleased to submit the following comments on the subject
proposed rule. DuPont is an owner and operator of production facilities
and fuel combustion sources that emit greenhouse gases. DuPont
participated in formulation of the original 1605(b) reporting protocol,
and was the first industrial company to report greenhouse gas emissions
under the 1605(b) program. DuPont has continued to report annually under
that program.

DuPont has made significant reductions in greenhouse gas emissions over
the past several years, and has already exceeded its internal goal of a
65% reduction in total net equivalent CO2 emissions by 2010 versus the
1990 baseline. We have participated as members of the Business
Environment Leadership Council of the Pew Center on Global Climate
Change, and as a charter member of the Environmental Defense Partnership
for Climate Action and the World Resources Institute (WRI) Green Power
Market Development Group. DuPont has been a key contributor to the World
Resources Institute's Greenhouse Gas Protocol and has participated in
pioneering efforts to establish trading mechanisms for greenhouse gas
emissions reduction credits.

We continue to support the development of responsible public policy and
market-based trading systems to encourage the reduction in greenhouse
gas emissions. In the U.S., we donated 44,000 metric tonnes of
reductions from one of our U.S.-based manufacturing sites to the
Leonardo Academy\'s Cleaner and Greener^TM^ program to be permanently
retired to help offset emissions associated with several conferences and
meetings. We also became a charter member of the Chicago Climate
Exchange (CCX) and participated in its first auction. DuPont endorses
the comments being provided by CCX, in particular the comments on the
baseline period and credits for early action.

Since DuPont has been addressing the issue of greenhouse gas emissions
for some time, we are pleased to see steps by the administration to
reduce GHG intensity. A robust and flexible registry is an important
element of making progress in reductions and recognizing individual
actions. We believe recognition of the voluntary efforts of entities
that took early action in the \'90\'s through 2002 will be a key
incentive to entities who are contemplating future voluntary actions to
meet the President\'s target. If properly crafted, 1605(b) reporting can
serve as a powerful incentive for GHG emitters to make voluntary
reductions. It is difficult to make detailed comments on the overall
1605(b) revisions until the Technical Guidelines are issued.

A key concern is that the guidelines provide that companies may not
"register" reductions achieved prior to 2002, the baseline year for the
President's program to reduce economy-wide GHG intensity by 18%. DuPont
understands the logic of tracking emission reductions from 2002 forward
so that government and business can reliably measure whether declines in
GHG intensity over the subsequent ten years meet or exceed the
President\'s goal. At the same time, DuPont and many other companies
undertook substantial GHG reduction projects before 2002 in a good faith
effort to respond to governmental or public concerns about global
climate change. DOE should take special pains to avoid devaluing
pre-2002 reductions in the marketplace or depriving them of legal
protection under future GHG control schemes.

DuPont offers the following comments on the proposed modifications to
the 1605(b) reporting General Guidelines. These comments address
specific issues of particular importance to DuPont as a reporting
company, as well as on the integrity of the submitted data.

1.  First, DOE should provide explicit assurance that projects
    previously reported to the §1605(b) registry will have the same
    standing and recognition as projects conducted and reported
    after 2002. Second, DOE should expressly state that 2002 is a
    baseline year only for registering entity-wide reductions under
    §1605(b) and not for any other purpose. Thus, DOE would clarify that
    the 2002 baseline was selected solely as a convenient accounting
    tool for the President\'s intensity reduction program and does not
    reflect a judgment that pre-2002 reductions are illegitimate or less
    deserving of protection in a future GHG control regime. Finally, DOE
    should establish a procedure by which companies can register
    entity-wide reductions achieved between 1991 and 2002 provided the
    company meets the inventory and reporting requirements established
    by DOE for post-2002 reductions. Under this procedure, 1991-2002
    entity-wide reductions would be tracked and registered separately by
    DOE so they are not counted toward post-2002 reductions in GHG
    emissions intensity. Thus, in order to qualify for registration of
    pre-2002 reductions, companies would need to establish a separate
    baseline year for 1991-2002 reporting and demonstrate a net emission
    reduction in some later year (2002 or before) when compared to that
    baseline.

2.  The base period should be no later than the CCX base period that
    includes the four years ending in 2001 (1998-2001). In the preamble
    (68 Fed.Reg. 68210), it is stated that entities would be permitted
    to register only those emission reductions calculated using a base
    year no earlier than 2002 (or base period of up to four sequential
    years ending no earlier than 2002). There are established protocols
    already in place that allow an earlier base period. Several
    companies are already reporting and registering their emissions
    through the CCX using the 1998-2001 base period. Enabling entities
    to report emissions to a 1605(b) base period similar to the CCX base
    period would increase the probability that entities will also report
    through the 1605(b) system. If the flexibility in selecting a base
    year does not enable companies to choose a year or years to coincide
    with the CCX, many reporting entities will either not report through
    1605(b), or expend additional non-productive time and effort to
    develop alternative base period emissions, and going forward
    spending continual effort to keep two databases and performance
    trends accurate. It would be unfortunate to not recognize the
    efforts of those companies who have already stepped up with
    aggressive voluntary actions.

3.  The 1605(b) reporting scheme is designed to provide flexibility for
    entities to report on either an absolute basis or an emissions
    intensity basis and we support that. However, it is essential that
    the reporting framework capture sufficient information to normalize
    reductions to a \"common currency\" that will permit meaningful
    entity-to-entity comparisons and enable tracking of progress on a
    national basis opposite the president\'s goal. Emissions intensity
    reports must be ultimately translatable to pounds or tons of CO2
    equivalent emissions to enable this national roll-up. The complexity
    of intensity-based reduction reporting also makes it important that
    the reporting protocol provide for adequate data quality and allow
    reasonable comparability between various reported reductions while
    retaining flexibility. It is assumed that the Technical Guidelines
    will provide detailed methodologies.

4.  In §300.6(a), it is stated that entity-wide reports are a
    prerequisite for the registration of emission reductions by entities
    with average annual emissions of more than 10,000 tons of CO2
    equivalent. There should be no entity-wide reporting prerequisite
    for registration of project emission reductions where those projects
    are focused discrete actions and emissions can be accurately
    quantified for that project. For example, process emission
    reductions wherein an emissions control system is installed provides
    a discrete emissions reduction quantity while that control system is
    in operation. Emissions from that source are dependent on the
    production unit and the emissions control system being in operation,
    and total entity-wide emissions of all six greenhouse gases have no
    relevance to that project's emissions reductions.

5.  In §300.6(e), it is stated that a reporting entity may exclude
    particular sources of emissions or sequestration if the total
    quantities excluded represent less than 3 percent of the total
    annual CO2 equivalent emissions of the entity or less than 10,000
    metric tons of CO2 equivalent, whichever is less. The deminimis
    definition in §300.2 also refers to this level. In the case of many
    companies, the 10,000 metric ton limit would apply, so that there
    could be a tremendous effort to quantify many small and diverse
    emissions sources that are truly deminimis relative to the entity's
    total emissions. We recommend that the threshold deminimis levels be
    revised to be 3% per individual gas or 5% for the entity wide
    emissions of all gases. This will provide an adequate level of
    accuracy. The 10,000 metric ton threshold should not apply in those
    cases.

6.  In addition to revising the percent deminimis thresholds, there
    should be default exemptions for certain inherently small direct
    sources of emissions, such as fugitive emissions, trace combustion
    emissions such as N2O, portable welding machines and air
    compressors. Since emission sources such as these are likely
    deminimis for all reporting entities, significant reporting efforts
    could be reduced by granting a blanket exemption for such emissions.
    In addition, vehicles that are part of a company's fleet should not
    need to be included in the emissions reporting since those can
    easily be included with overall transportation sector emissions.
    However, if an entity desires to include those emissions in its
    report, that should be accommodated.

7.  §300.6(c) covers indirect emissions. It is totally appropriate for a
    purchaser of electricity, steam, hot or chilled water, and other
    energy or utility streams to be able to include those associated
    emissions is its report. Since those are indirect (emitted by
    another entity to satisfy the needs of the purchaser), they should
    be listed separately so that double counting can be avoided. The
    definition of avoided emissions in §300.2 is confusing. If direct
    and indirect emissions resulting from purchased electricity, steam,
    and other energy streams are included in the entity's report, then
    avoided emissions would just be the difference when a change is made
    from self-generated energy streams to purchased energy streams.
    Further clarification of the definition of avoided emissions may
    help unfamiliar users of 1605(b).

8.  DOE suggests in the preamble (68 Fed.Reg.68212) that they are
    considering applying an electricity generation CO2 emission factor
    based on the marginal supply energy source. This is inappropriate
    since if all consumers reported through 1605(b), resulting emissions
    would be in error vs actual generation of electricity. It is much
    more appropriate to continue using the past 1605(b) state emission
    factors. That not only provides a realistic average value for a
    particular site, but is consistent with past 1605(b) reporting. In
    the case where a purchaser is receiving power from a single
    generating facility by contract, it should be acceptable for that
    purchaser to use the actual associated CO2 emission rate for that
    generating facility.

9.  Where cogeneration facilities (CHP) are used to provide steam or
    electricity to a purchaser, DOE should refer to the protocols
    developed by WRI relative to different approaches for emissions
    allocation. As a general practice, the efficiency method of
    allocation provides a reasonable approach to allocation of energy
    and CO2 emissions, but flexibility should be allowed for election of
    other more appropriate methods for specific cases.

10. DOE questions whether trade associations should be required to
    submit some or all of the entity-specific data that might be
    required by the revised Guidelines. We believe that reporting
    through trade associations should be optional. There are some cases
    where individual companies desire to report independently through
    1605(b) so that their performance as a company is documented. Having
    a relevant trade association also report that same data in aggregate
    form would result in double counting. It would take considerable
    effort to prevent or correct for double counting. However, in those
    cases where all trade association members desire to report in
    aggregate through the trade association, the 1605(b) program should
    enable that to occur in as easy a manner as possible.

11. §300.5(c)(1)(iii) requires documentation of the transfer of economic
    activity to or from specific operations outside the U.S. This
    requirement could result in extensive and unnecessary reporting of
    activity for a global company. If needed at all, this should be
    limited to only changes that result in a significant impact on net
    GHG emissions relative to the entity's total emissions.

12. We strongly support the concept that manufacturers of products used
    in other sectors can report associated emissions reductions or
    avoided emissions through use of those products. Since many products
    are used in the buildings sector and those entities will likely not
    report under 1605(b), the manufacturers of energy saving or other
    products should be allowed to include those emissions
    reductions/avoided emissions in their report. Those quantities
    should be reported separately so that double counting can be
    avoided. Emission rates could be based on standardized conversions
    or assumptions provided by DOE. Since this can be a complicated
    approach due to the diverse nature of products, it is recommended
    that DOE hold a workshop with interested parties to discuss
    different approaches for this allowance.

Thank you for the opportunity to comment on these Guidelines. Please
contact me with any questions or if you need additional information.

Yours truly,

Edwin L. Mongan III

Director, Energy and Environment

DuPont Company

1007 Market Street D 6082

Wilmington, DE 19898

e-mail: <Edwin.L.Mongan-1@usa.dupont.com>

Electronic Copy to: 1605bgeneralguidelines.comments@hq.doe.gov