February 17, 2003 FE 6295

Electronic submission to ghgregistry.comments \@hq.doe.gov

Re: Comments stemming from the Department of Energy 1605(b) Workshops on
Voluntary Reporting of Greenhouse Gas Emissions, Reductions, and Carbon
Sequestration.

GM is pleased to offer the following comments regarding modifications to
the guidelines governing voluntary reporting of greenhouse gases (GHG)
under the Energy Policy Act of 1992.

GM endorses the existing Department of Energy 1605(b) Voluntary
Greenhouse Gas Registry and has been reporting under the voluntary
1605(b) guidelines since its inception in 1995. However, since 1995, GM
has learned through active participation in voluntary GHG reporting that
specific updates to the 1605(b) guidelines would be prudent (refer to
specific position statements in Section 3). GM also believes that, in
light of recent proliferation of proposed state and federal GHG
reporting initiatives, the Department of Energy should take the lead in
advancing their single, coordinated, national, voluntary reporting
system.

The following pages attempt to convey a set of strategic approaches for
the DOE to consider, followed by the tactics that will enable the
strategic approaches, and conclude with GM's position on specific GHG
reporting issues.

GM welcomes a dialogue with the DOE on all issues raised within the
following pages.

![](media/image1.png)Respectfully Submitted,

Kristin B. Zimmerman, Ph.D.

General Motors Public Policy Center

Manager- Energy & Global Climate Issues

313-665-9164

[kristin.b.zimmerman@gm.com](../kristin.b.zimmerman@gm.com)

cc: [Margot.Anderson@hq.doe.gov](../Margot.Anderson@hq.doe.gov)
[larisa.dobriansky@hq.doe.gov](mailto:Lerisa.dobrianski@hq.doe.gov)

<Arthur.Rypinski@hq.doe.gov> [Al.cobb@hq.doe.gov](../Al.cobb@hq.doe.gov)

Greenhouse Gas Reporting Under the Department of Energy 1605(b)

[Section 1: Strategy]{.underline}

GM believes that GHG reporting is an energy issue first that should be
tracked by the Department of Energy (DOE) via the voluntarily mechanism
called the 1605(b). Annual totals reported within the 1605(b) will
provide measurable progress toward the Administrations 18% intensity
goal. Secondly, the Securities and Exchange Commission (SEC) and/or the
Department of Commerce could play a complementary role in the Registry.
Their potential role is described in the following paragraphs.

The flexibility of the existing 1605(b) has allowed for the reporting of
verifiable data. Some would suggest that the flexibility does not result
in 'real' reductions and or 'accurate' representation of a reporting
company's ghg footprint. GM believes that the data it has submitted
since the inception of the 1605(b) in 1995 documents [real]{.underline}
reductions with [a strong emphasis on accuracy.]{.underline}

GM suggests that if the 1605(b) is to evolve into a registry that
enables the granting of transferable credits, then the DOE should create
a multi-tiered 1605(b) registry such as that described in Figure 1. The
potential authority to work together with the SEC and/or the Department
of Commerce should also be considered.

Note:

-   The 1605(b) is not the national inventory, but it is the national
    registry and is authorized to hold public aggregated (intensity
    preferred, i.e. CO2 per unit output, etc.) company-level GHG
    reporting data (emissions and reductions). What the reporting
    company chooses to do with their reported 1605(b) data, in terms of
    trading, should be left to the reporting company to decide. If the
    reporting company chooses to trade FROM the 1605(b) registry, then
    issues concerning data confidentiality, verification, and tracking
    should be applied according to the multi-tiered framework suggested
    in Figure 1.

-   GM supports credit for early action and submits that if a company
    was proactive in reporting to the 1605(b) before the base-year of
    2000 (cited as the base-year to measure the Administration's 18%
    reduction against), then they should not be penalized by having
    their reported and verifiable CO2 reductions ineligible for trading
    in a future emissions trading scheme. The companies that have
    reported, as a charter member of the 1605(b) should be allowed to
    submit all data in their 1605(b) filings to a 3^rd^ party for
    verification.

> *Base year indicates the year a company chooses as their starting
> point to measure all ghg reduction progress against. Baselines
> represent the reporting company's ghg footprint per the base year and
> it adjusts according to a company's acquisitions (including building a
> new facility) and/or divestitures, but does not adjust due to organic
> (i.e. shifts in annual production) growth.*

GM believes that the DOE should promote 100% company level participation
in reporting to the 1605(b). The DOE could promote reporting to the
1605(b) by supporting the following:

\- leverage existing trade organizations that promote reporting to the
1605(b) to

mentor all of their members that are not currently reporting (i.e. US
Climate

Partnerships Association), and

> \- assign a DOE 1605(b) technical consultant to all companies who are
> not currently
>
> reporting to help them get started.

[Section 2: Tactics]{.underline}

GM believes that the DOE's role in the updated 1605(b) Registry system
could be the following:

Continue to:

-   Establish guidelines for voluntary GHG reporting that enable the
    reporting of verifiable data (reporting of both national and
    international operations data should be allowed)

-   Allow for self certification of reported GHG emissions and
    reductions

-   Make public the aggregated CO2 intensity data within the registry
    (same as today)

-   Funnel the 1605(b) progress (The National Registry) into the
    National Inventory (same as today)

Begin:

-   Working closely with the State Department as global ghg reporting
    guidelines become utilized under the proposed Kyoto mechanisms; to
    promote 1605(b) guidelines as the common approach

-   Conveying a certificate to the reporting company upon completion and
    review of the annual filing (same as today but the certificate would
    now mean that the CO2 tons reported are certified and can therefore
    be passed onto a verifier)

-   Documenting the base-year 2000 GHG intensity footprint for the US
    and measure the delta (change) over time to 2012.

Allow for a Provision to:

-   Provide certification standards to certify the verifiers (State
    Energy Offices may be able to convey the local certification
    standards i.e. California Climate Action Registry) -- See Figure 2:
    Potential Verification Process

-   Provide a tagging or tracking mechanism to track the categories
    (ENTITY: direct, indirect, PROJECT: direct, indirect) of emissions
    and reductions submitted by the reporting company. The tags will be
    able to track whether or not a ton moved out of Tier 1 of the
    registry into Tiers 2 or 3...hence, whether the tons were 3^rd^
    party verified for potential trading.

-   Provide authorization for FOIA Protection

Hand-off to the SEC and/or Commerce:

-   The SEC or Commerce could control the tracking of actual trades from
    Tiers 2 and/or 3 of the Registry. Commerce (i.e. the census data)
    provides a mechanism to maintain confidentiality; the SEC (company
    financial filings) provides a framework to report financial data.

-   The actual tracking of cost per trade should be held confidentially
    between the buyer and the seller and their third parties. This will
    avoid FOIA reach through.

FIGURE 1: GM supports a Multi- Tiered DOE 1605(b)/SEC-Commerce Registry
under

> the following definition:

*One National-Level Registry to Track GHG Emissions & Reductions. All
GHG Reporting enters the Registry through Tier 1 using the 1605b
Guidelines for Reporting GHG Emissions, Offsets and Avoidances.*

[TIER 1: PUBLIC INFORMATION HELD BY THE DOE]{.underline}

*No intention to transfer credits*

-   Support Administration's GHG reduction target

    -   public recognition for voluntary reporting

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    -   self-certification allowed

    -   3^rd^ party certification/verification not required. Reporting
        company has the option of retaining a 3^rd^ party
        certifier/verifier at their own cost.

    -   reporting company is required to submit CO2 intensity (absolute
        tonnage is also allowed)

TIER 2: [CONFIDENTIAL INFORMATION HELD BY THE REPORTING
COMPANY]{.underline}

*Intent to Transfer Credits - The Silver Standard*

-   refer to Data Confidentiality section for details

-   3^rd^ party certification/verification required in order to move
    tonnage totals from Tier 1 to Tier 2.

-   Should comprehend a [national level standard]{.underline} for
    certification of certifiers

-   reporting company will acquire a 3^rd^ party to verify their CO2
    tonnage from TIER 1. The 3^rd^ party will rate the 'Quality' of the
    Tonnage (i.e. Silver, Gold Standard) for transfer into a
    '[national]{.underline}' emissions trading scheme.

Issues to Resolve: (Issues of Authority)

-   Should DOE, SEC or Commerce be given [authority]{.underline} to hold
    or bank the trade of the CO2 credits in TIERS 2 and 3 after they
    have been certified/verified by the 3^rd^ party or should only TIER
    1 information be allowed in the 1605(b) database?

-   Should the Registry track credit transfers...transfers from Tier 1
    to Tiers 2-3, between Tiers 2-3 or transfers from Tiers 2-3 to the
    open market? If so, how can the reporting company prevent FOIA reach
    through?

TIER 3: [CONFIDENTIAL INFORMATION HELD BY REPORTING COMPANY]{.underline}

*The Intent to Transfer-The Gold Standard*

-   Intent to transfer credits at the maximum level of 'transferability'

-   3^rd^ party certification/verification required. Must comprehend an
    [international-level standard]{.underline}. Ensure that a U.S. ton
    can be traded at the same value as a EU ton, UK ton, etc.

Issue to Resolve: (Issues of Authority)

-   Should the DOE, SEC or Commerce be given authority to audit and/or
    track the trades?

[GM Comments Regarding Data Confidentiality:]{.underline}

-   The 1605(b) Registry is a voluntary program that should not require
    facility level or source level data in order to evaluate progress in
    the reduction of GHG emissions.

-   The 1605(b) Registry should protect the confidentiality/trade secret
    concerns of the reporting company by only requiring the reporting of
    corporate-level (or aggregated) GHG intensity (i.e. CO2 per unit of
    output).

-   If possible, the DOE should obtain appropriate confidentiality
    protection from FOIA...then Tier I of the registry will read easily
    into Tier II.

-   Data confidentiality should be preserved between the reporting
    company and the voluntary government program. A 3^rd^ party
    certification/verification should not be required at the point of
    reporting GHG emissions. A 3^rd^ party certifier/verifier should be
    required at the point when the reporting company requests
    certification and verification of their absolute facility-level GHG
    emissions for purposes of emissions trading.

![](media/image2.wmf){width="5.522916666666666in"
height="2.813888888888889in"}Example: The Illustration shown below
indicates a few of the existing voluntary government programs (clear
boxes) capable of reporting up to the proposed DOE/SEC-Commerce 1605(b)
Registry. The blue box (bottom right) indicates those areas under
development within the 1605(b) GHG reporting guidelines and registry.
The green box (bottom middle) illustrates an example of a trade
organization taking action to support the Administration's GHG reduction
target for 2012.

\* Data Accessibility Flow: Top to Bottom of Illustration

-   Voluntary Programs (EPA, DOE -- At either the state or federal
    levels)

    -   (Clear Boxes) Aggregated Data: Corporate Level

        -   accessible to the PUBLIC (i.e. Climate Leaders, 1605(b))

    -   (Blue Box) Facility Level Data

        -   accessible to 3^rd^ party verifiers/certifiers only via
            legal instruments (i.e. confidentiality agreements) (See
            Verification Process)

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```
-   prevents FOIA reach through by regulators, NGOs, etc

-   offers companies an option to establish a verified
    baseline...insurance against a potential mandatory future

\*\* USCPA: U.S. Climate Partnership Association

*"Taking Action NOW by Recruiting Companies to Reduce GHG Emissions &
Report to the 1605(b)"*

FIGURE 2: A Modified Version of the World Economic Forum Draft

> Verification Process

![](media/image3.wmf){width="6.583333333333333in"
height="4.916666666666667in"}

[Section 3: Position Statements]{.underline}

GM's Position and Comments on Specific Issues

[National vs. State Level Reporting:]{.underline}

-   GM supports voluntary reporting of greenhouse gas emissions (GHGs)
    according to the DOE 1605(b) GHG Reporting Guidelines and Registry
    as a single coordinated National Reporting System rather than
    individual state reporting guidelines and registry systems to avoid
    the following:

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-   Multiple state-level reports

-   Potential proliferation of non-uniform reporting approaches

-   Revealing competitive information, especially in those states where
    the reporting company has only one facility (see Data
    Confidentiality Section)

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```
-   GM opposes mandatory reporting as being unnecessarily burdensome at
    the

> State or Federal level. (GM would be [required]{.underline} to
> annually submit [30]{.underline} state-level
>
> reports.)

-   GM believes that [States]{.underline} should encourage industry to
    participate in voluntary programs sponsored by the DOE, EPA and
    others, which share \'best practices\' that translate into energy
    and CO2 reductions backed by a strong business case. States should
    also support joint research programs between industry and the
    federal government on technologies to reduce ghg emissions.

-   GM has proven, by example, that the voluntary reporting mechanism
    provided under the [Federa]{.underline}l DOE 1605b enables the
    monitoring and reporting of 'real' reductions over time.

**[Project Level vs. Entity Reporting:]{.underline}**

-   GM supports the reporting of projects (both inside and outside of
    organizational and geographic boundaries) as a valuable category to
    represent action taken by industry to manage GHG reductions.

-   GM supports GHG reporting of projects alone, projects plus entity,
    or entity alone. However, companies that project report without
    entity reporting are unable to develop a 'baseline.'

-   GM supports the reporting of all greenhouse gases including CFC's.

-   GM supports reporting of emission reductions and carbon
    sequestration from projects and suggests that the guidelines
    comprehend all national and international projects achieving
    emission reductions and carbon sequestration. This will allow
    flexibility in emissions trading for both national and
    multi-national corporations.

[Operational Boundaries vs. Organizational Boundaries:]{.underline}

-   GM believes that 100% of GHG Emissions should be reported for those
    facilities under management control rather than reporting a portion
    of emissions based on equity share. *Management Control means at
    least a 50% equity position, at least 50% Representation on the
    Board and/or management of the operation:*

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-   Full Ownership Implies Management Control: Report all Emissions

-   Joint Ownership: Report if under Management Control. Partners should
    determine, up-front, who will be reporting to avoid double counting.

-   Leased Facility: Report if greater than 0.1% of annual facility
    total CO2 emissions (or more than 30,000 metric tons CO~2~ per year)

[Direct vs Indirect and "Other" Emissions:]{.underline}

GM supports reporting Direct and Indirect Emissions from facility
operations in the following categories:

-   Direct Fuels: coal, coke, natural gas, purchased steam, LPG,
    distillate oil, solid waste, liquid waste

-   Indirect Electricity: Purchased Electricity

-   Renewable Energy Sources: including landfill gas (use an emissions
    factor of zero to reflect the [effect of offsetting emissions from
    conventional energy sources)]{.underline}

-   

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-   GM suggests that indirect emissions should be explicitly defined as
    "emissions from purchased electricity." The term "Other" emissions
    should be used for those emissions other than Direct Fuels and
    Indirect Electricity.

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```
-   GM supports the reporting of aggregate Indirect Emissions from
    facilities in multiple states and suggests the following: Develop a
    base year weighted emissions factor based on a weighted average of
    state electricity usage and state electricity emissions factors for
    a designated base year. The base year weighted average emissions
    factor for electricity can be held constant in all of the reporting
    years to eliminate a year-to-year variable outside of the control of
    the reporting entity unless a 'recordable' shift in electricity mix
    has occurred by the reporting entity.

-   GM does not support the reporting of the following "Other"
    emissions (1) Employee Business Travel, (2) Transportation of
    Materials, Products, and Employees, (3) Employee Commuting, due to
    the fact that the identification and calculation of GHG emissions in
    these categories can be "highly inaccurate." Reporting of categories
    1-3 could proliferate systematic inaccuracies in determining a CO2e
    total per each respective category. GM does not support the use of
    "inaccurate" or misleading data in establishing its baseline or in
    its annual reporting.

*Example:* Employee Commute or Employee Business Travel.

GM does not support the use of Vehicle Miles Traveled (VMT) as an
accurate and/or representative emissions indicator for travel purposes
due to the following:

> VMT misrepresents the calculation of total GHG emissions: For
> Example...
>
> A duty cycle of 10 miles may take 10 minutes on an expressway going 65
> mph without traffic. It may also take 1 hour to travel 10 miles. The
> GHG emissions from each of the two scenarios are completely different.

Rather than using VMT, GM believes a more accurate calculation would be
based on the total gallons of fuel consumed over a period of time
(annually). The federal government tracks annual fuel usage per type of
fuel.

[Closed-Loop Waste Management (i.e. Avoidances):]{.underline}

GM believes that the avoidance contributions from the recycling and/or
reuse of materials in manufacturing processes should be comprehended in
the guidelines for GHG reporting. For example, a company's direct
emissions from the use of fuels (coal, natural gas, etc) can be offset
by the use of a closed loop materials recycling program (direct
avoidance) within the company's operational and organizational
boundaries. Therefore, the reporting company should be allowed to report
their direct avoidances as projects in order to represent the reporting
company's 'GHG Footprint'.

[GHG Footprint Scorecard:]{.underline}

A possible approach to tabulating a reporting company's GHG Footprint,
which comprehends indirect and direct emissions and avoidances, has been
prepared by Roy Salomon of Booz/Allen/Hamilton and is shown below. The
format may be helpful to use as a spreadsheet within the updated 1605(b)
guidelines.

GHG FOOTPRINT SCORECARD

![](media/image4.wmf){width="5.748611111111111in" height="4.025in"}

Additional categories referenced in GM's filing with the DOE Notice of
Inquiry [requesting updates to 1605(b): June 5, 2002.]{.underline}

1.  GM comments regarding verification and certification:

-   Internal verification and certification of data reported by a
    registered Professional Engineer (P.E.), a Ph.D. Engineer, or an
    officer of the company [should continue to be
    permitted]{.underline}.

-   3^rd^ party certification/verification should not be required at the
    time of reporting.

-   GHG reporting under the existing DOE 1605(b) Protocol should
    [remain]{.underline} 'verifiable.' (Verifiable means that each
    company is responsible for maintaining all underlying documentation
    to support their CO2 reductions)

2.  GM comments regarding fungible credits/emissions trading:

-   3^rd^ party certification/verification should occur [at the
    time]{.underline} when the reporting company wants the credits to
    become fungible.

-   Baseline protection for credits achieved by early action should be
    ensured

-   Seller liability for any credit traded should be ensured

3.  GM supports the use of EIA emissions factors for all fuels used in
    the U.S. except landfill gas and renewable electricity.

-   Use an emissions factor of zero for landfill gas and other renewable
    energy sources to reflect the [effect of offsetting emissions from
    conventional energy sources]{.underline}

4.  GM supports the reporting of refrigerant usage in its operations and
    reports all annual purchases of refrigerants for facility and
    factory fill applications (i.e. CFC's, HFC's, HCFC's)

5\. GM suggests that Global Warming Potential (GWP) factors be included
in the

EIA 1605(b) guidelines (IPCC data are appropriate.) Reporting companies
can update

GWP to current values. However, the reporting company should keep GWP
constant

across the reporting years to eliminate a year-to-year variable outside
of the control of the

reporting entity.

6.  GM believes that the registry system must be flexible to allow a
    reporting company

to submit either absolute or normalized data.