NATIONAL LIME ASSOCIATION

200 NORTH GLEBE ROAD

ARLINGTON, VA 22203

# June 22, 2005 

Mr. Mark Friedrichs, PI-40

Office of Policy and International Affairs

U.S. Department of Energy

Room 1E190

1000 Independence Avenue, S.W.

Washington, DC 20585

Submitted electronically to
[mailto:1605bgeneralGuidelines.comments@hq.doe.gov](mailto:1605bgeneralguidelines.comments@hq.doe.gov).

**RE: Revised General Guidelines & Draft Technical Guidelines for**

> **Voluntary Greenhouse Gas Reporting, 70 Fed. Reg. 15,169 (Mar. 24,
> 2005)**

Dear Mr. Friedrichs:

The National Lime Association (NLA) is pleased to present its comments
on the interim final General Guidelines and draft Technical Guidelines
for Section 1605(b) reporting. NLA is the trade association for
manufacturers of calcium oxide and calcium hydroxide, collectively
referred to as "lime."

The lime industry, through its trade association, the National Lime
Association, is a participant in the Department of Energy's
ClimateVISION program. In June of 2003, the lime industry committed to
reducing greenhouse gas emissions from fuel combustion per ton of
product by 8% between 2002 and 2012, on an aggregate basis. Since then,
NLA has developed a protocol for quantifying greenhouse gas emissions
and emission reductions from lime manufacturing plants, and submitted
its first biennial report to DOE on aggregate industry trends in
greenhouse gas intensity.

NLA strongly supports the concept of voluntary reporting of greenhouse
gas emissions.

It is important to consider the purpose of the voluntary reporting
system---to encourage voluntary actions that reduce emissions or
emissions intensity. Procedural requirements that would discourage
reporting---and thus discourage voluntary actions---should be avoided.

In several respects, NLA believes, the General and Technical Guidelines
unnecessarily prejudge what Congress may decide to do when and if it
creates a system of tradable greenhouse gas emissions credits. Following
a brief summary of the Guidelines, we address this concern and offer the
following other suggestions to improve them:

1.  ClimateVISION should remain separate from the 1605(b) program

2.  DOE's Guidelines for estimating CO~2~ emissions from lime production
    should be revised to enhance accuracy

3.  The 1605(b) program should allow registration of reductions of both
    direct and indirect emissions, including use of landfill gas
    generated off-site

4.  The Guidelines should account for absorption of CO~2~ in industrial
    processes, such as the manufacture of precipitated calcium carbonate

5.  DOE should allow recalculation of the "Base Value" to reflect
    changes in activities that result in increases in emissions or
    emissions intensity beyond the control of the reporter

6.  DOE should use consistent emissions factors for purchased
    electricity

7.  The ratings system should not be used to limit the registration of
    emissions reductions

8.  Entities should be permitted to register reductions resulting from
    declines in production

9.  DOE should allow reporting in English units

10. DOE should reopen the comment period on the Guidelines when the
    forms for reporting and registering emission reductions are
    released.

**Summary of DOE Section 1605(b) Guidelines**

Under the revised General Guidelines and draft Technical Guidelines,
entities can voluntarily report greenhouse gas emissions and reductions.
The intent of the Guidelines is to allow entities to "register"
emissions reductions, with the idea that eventually these reductions
will be recognized in an emissions trading or other regulatory scheme.
Entities can also "report" emissions reductions if they choose not to
use all the procedures required to "register" them.

**"Registering" Emissions Reductions**

The Guidelines create a set of requirements that entities must meet if
they wish to "register" emissions reductions. Among these are a
requirement to perform a baseline emissions inventory, and to submit
detailed information about facilities and emission sources. Emissions
and reductions must be reported on an "entity-wide" basis in order to
register reductions.

In addition, in order to register reductions, the emissions and
reductions must be calculated according to methods receiving specified
quality ratings established by DOE. Thus (for example), for emissions
from lime production, DOE has given the highest rating to a mass balance
method using measured lime purity, and a lower rating if default factors
are used. Reductions can only be registered if they receive, on average,
a "B" quality rating for their calculation methods.

DOE expresses a preference for calculating emissions reductions based on
emissions intensity (emissions per unit of output), but reductions based
on absolute emissions may also be registered. However, reductions in
absolute emissions cannot be registered if they result solely from a
decrease in production (e.g., plant closure).

**Role of Trade Associations and Effect on ClimateVISION**

In the preamble to the revised 1605(b) Guidelines, DOE indicates that it
plans to use the 1605(b) reporting scheme for reports under the
ClimateVISION program. The Guidelines provide for "aggregators" that can
report reductions for a number of companies, but in general the concept
is that these aggregators will only aggregate the *reports*, and not the
data itself. It appears that each company (or "entity") whose report is
being "aggregated" must submit its own emission inventory and other
entity-specific information. The Guidelines do not take into account the
kind of sector-wide reporting being done under ClimateVISION.

**NLA Comments on Section 1605(b) Guidelines**

1.  **ClimateVISION should remain separate from the 1605(b) program**

NLA believes that the 1605(b) and ClimateVISION programs have very
different purposes, and that the two programs should not be combined.
However, we support the use of the same quantification protocols under
the two programs.

1605(b) is designed primarily to allow entities to report and register
emissions reductions, both to encourage such actions, and to quantify
those reductions in anticipation of future trading of emissions credits,
or other programs in which past reductions may be recognized.
ClimateVISION, on the other hand, is designed to encourage industrial
sectors to make collective commitments to reduce greenhouse gas
intensity, and to work with DOE to monitor progress toward achievement
of those commitments.

Detailed entity-specific data are not needed to achieve the goals of
ClimateVISION. Accordingly, NLA believes that the trade associations
representing industrial sectors under ClimateVISION should not be
obliged to meet the detailed data requirements of 10 CFR Section 300.5
in order to report progress toward ClimateVISION commitments.

Like other sectors, NLA's commitment under the ClimateVISION program
provides for submittal to DOE of industry-wide emissions and reduction
information to reflect the industry's progress in meeting its
sector-level commitment. These reports do not include any
entity-specific information. NLA believes that if it were required to
submit entity-specific information under ClimateVISION, many of NLA's
members would decline to participate. It was the opportunity for
sector-wide reporting, submitted through the trade association, which
created a willingness on the part of lime companies to participate.

NLA urges DOE to maintain ClimateVISION as a program independent from
1605(b). The reporting requirements under ClimateVISION should be
determined by agreed commitments and work plans, not by the 1605(b)
Guidelines.

2.  **DOE's Guidelines for estimating CO~2~ emissions from lime
    production should be revised to enhance accuracy**

DOE's lime industry estimation methods in the Technical Guidelines (pp.
96-97) reflect a general understanding of the production of CO~2~ from
lime manufacturing. However, in several respects, the Guidelines
oversimplify key features of the lime manufacturing process or the
product itself, with the end result that the derived CO~2~ estimates
will be inaccurate. By contrast, NLA has developed a protocol that
incorporates a more refined approach to estimating CO~2~ emissions from
lime plants. (This protocol has been provided to DOE and can be
referenced at
<http://www.energetics.com/climatevision/sectors/lime/protocols.html>.)

Set forth below are illustrative features of DOE's Guidelines that give
rise to substantial inaccuracy, as compared to NLA's protocol:

-   [Omission of CO~2~ from Lime Byproducts.]{.underline} DOE's
    Guidelines do not account for CO~2~ generated from the production of
    calcined byproducts/wastes (such as lime kiln dust). Byproduct
    generation quantities are typically 15% of quicklime (CaO)
    production, with the oxide content of byproducts being about half
    that of quicklime. Omission of these byproducts/wastes from the
    Guidelines therefore underestimates by 8%, on average, the total
    amount of CO~2~ emissions reported. By contrast, NLA's protocol
    includes CO~2~ generated from the production of byproducts.

-   [Default vs. Measured Value for Oxide Content]{.underline}. NLA's
    protocol uses a more precise calculation of calcination emissions
    than that contained in DOE's Guidelines because it requires
    calculations based on the actual amounts of CaO and MgO in a
    company's lime products. NLA's approach generates an emission factor
    (factor multiplied by tons of lime product to generate tons of CO~2~
    emissions) that is based on measured values.

> DOE's Guidelines, on the other hand, allow the use of standard
> emission factors which can vary significantly from factors based on
> measured values. For example, while the Guidelines provide an emission
> factor for high calcium lime of 0.75, NLA has determined that the
> emission factor for this product can vary between 0.73 and 0.78.
>
> In addition, DOE's Guidelines provide default stoichiometric weight
> ratios of CO~2~ to CaO or CaO\*MgO in different types of lime.
> However, these weight ratios assume there is no MgO in high calcium
> lime, and that dolomitic lime contains equal amounts of CaO and MgO.
> In reality, lime products contain varying ratios of these components.
> Only measured values allow the correct stoichiometric weight ratios to
> be applied.
>
> DOE's default emission factors appear to be based on assumed levels of
> "Lime Purity" (although these are not stated). The percentages of CaO
> and MgO can vary significantly from product to product, often based on
> the characteristics of the limestone used as the raw material for lime
> manufacture. NLA's protocol uses measured values for these
> percentages.
>
> This inaccuracy can be further compounded when two inaccurate defaults
> are multiplied together (as can be the case for a default
> stoichiometric ratio and a default "lime purity" figure).

-   [Total vs Available Oxide Content]{.underline}. NLA's protocol
    includes detailed instructions on how to calculate CaO content in
    lime using measured % total CaO, or by using measured % available
    CaO with a correction factor. DOE's Guidelines are silent on this
    issue.

NLA believes DOE should revise the Lime Production portion of the
Technical Guidelines to be consistent with NLA's Protocol. We would be
happy to work with DOE to accomplish this goal.

3.  **The 1605(b) program should allow registration of reductions of
    both direct and indirect emissions, including use of landfill gas
    generated off-site**

Allowing facilities to register both direct and indirect emissions
reductions will encourage energy efficiency and co-generation. The
current proposal allows registering indirect reductions related only to
electrical power. NLA recommends that registration be permitted for any
indirect emissions reductions that can be adequately quantified and
attributed to the reporter's activities.

One important example of such indirect emissions reductions is the use
of landfill gas as a replacement fuel. The Guidelines currently would
allow a [landfill]{.underline} to register capture and reuse of landfill
gas as an emissions reduction, but would not allow an [offsite
user]{.underline} of the gas to include the indirect emissions reduction
as part of its own registered reductions. It appears that the user of
the fuel could be able to register the offsite reduction as a
third-party reduction, with the agreement of the landfill, but this
reduction would have to be evaluated separately, and would have to be
netted against emissions from the landfill. This level of
complexity---and the need to essentially bring the landfill into the
reporting system---will reduce the incentive for facilities to use
offsite landfill gas to replace virgin fossil fuels.

4.  **The Guidelines should account for absorption of CO~2~ in
    industrial processes, such as the manufacture of precipitated
    calcium carbonate**

CO~2~ is generated when limestone (calcium carbonate) is heated to
generate quicklime (calcium oxide). At some commercial lime plants,
calcium oxide is used to manufacture precipitated calcium carbonate
(PCC) in a process that absorbs CO~2~. PCC is a product that has many
uses, including manufacturing of high-grade paper products. NLA believes
that the absorption of CO~2~ in the manufacture of PCC is a form of
sequestration that should be netted against the emissions of CO~2~ at
the lime plant. However, the Guidelines do not clearly provide for such
netting, since they seem to include only geological and biological
sequestration.

CO~2~ used to produce PCC is not emitted to the atmosphere from a lime
plant, and thus should not be included in the emissions inventory of the
plant. CO~2~ may or may not be emitted at some later date, depending on
the use of the PCC, but that potential emission should not be chargeable
to the lime plant. Accordingly, the Guidelines should make it clear that
CO~2~ absorbed in an onsite industrial process, such as PCC manufacture,
should not be included in the plant's emissions inventory.

5.  **DOE should allow recalculation of the "Base Value" to reflect
    changes in activities that result in increases in emissions or
    emissions intensity beyond the control of the reporter**

The General and Technical Guidelines provide for recalculation of the
Base Value to reflect certain events, such as acquisitions and
divestitures, or outsourcing/insourcing of elements of the production
process. However, there are other events that could result in absolute
emissions or emissions intensity increases that should also not be
chargeable to the reporter.

For example, some lime plants are using landfill gas as a replacement
fuel. This gas produces low CO~2~ emissions when compared to other
economically viable fossil fuels. However, the supply of this gas from
any particular landfill will be diminished or exhausted over time. When
that occurs, the lime plant will be obliged to purchase other fossil
fuels that will generate more CO~2~ emissions per unit of output than
did the landfill gas.

If the landfill gas is being used when the Base Value is calculated, its
later exhaustion and replacement with virgin fossil fuels could make it
impossible for the plant to achieve any registerable emissions
reductions. This is an undesirable result, because it penalizes a
beneficial activity---the use of landfill gas reduces indirect emissions
of methane at the landfill, and replaces other non-renewable fossil
fuels.

Other events that could justify such a recalculation of Base Value may
include:

-   Switching to a fossil fuel when a biomass fuel (e.g., wood chips)
    becomes unavailable or uneconomical;

-   Public taking of land used for sequestration; or

-   Government regulations restricting use of a particular fuel, or
    limiting the beneficial reuse of a byproduct or waste material.

Such events---outside the control of the reporter---should not prevent
the reporter from registering emissions reductions. The Guidelines
should provide an opportunity for a reporter to recalculate the Base
Value if such an event occurs, either by requesting DOE to approve the
recalculation, or simply by documenting the rationale for the
recalculation in annual reports.

6.  **DOE should use consistent emissions factors for purchased
    electricity**

The Guidelines call for reporters to use different emissions factors for
purchased electricity when calculating emissions
[inventories]{.underline} and when calculating emissions
[reductions]{.underline}. This approach is unnecessary, and the same
emissions factor should be used in both circumstances.

The Guidelines call for [regional]{.underline} factors to be used in
calculating emissions inventories, and [nationwide]{.underline} factors
to be used when calculating emissions reductions. Under this approach,
the figure used for emissions from purchased electricity in the
inventory is not actually used for anything other than the creation of a
meaningless, if not misleading, total emissions inventory figure. This
is misleading because this figure is never compared with later emissions
amounts when calculating reductions. (Only the amount of electricity
used in the base period is used, not the base emissions amount.) Because
of the limited number of reporters, initial inventory numbers are not
really useful as sources of general information, but should only be
collected if they will be useful in calculating or verifying later
reductions numbers. Accordingly, DOE should use the same number for
calculation of emissions from purchased electricity for inventory and
reductions purposes.

NLA recognizes that using national emission factors for calculating
reductions makes the calculations simpler, and also reflects the degree
to which electricity has become a commodity. However, this approach
fails to take into account actions that result in important reductions
in greenhouse gas intensity. For example, this approach would not
recognize a decision by a company to begin buying "greener" electricity
that resulted in fewer emissions. The 1605(b) program should encourage
such decisions.

NLA believes that a better approach would be to use actual emissions
factors for the purchased electricity, to be provided by the electricity
source. NLA has found that most, if not all, electricity producers are
able to generate an emissions factor that takes into account the mix of
emissions represented by the electricity they sell.[^1] In some cases it
might be necessary to use a default value, such as a regional emissions
factor, but in most cases more accurate values are readily available.
Using these figures would allow reporting and registering of actual
reductions related to use of purchased electricity, and would encourage
energy users to move to "greener" sources of energy.

7.  **The ratings system should not be used to limit the registration of
    emissions reductions**

NLA does not object to the introduction of a ratings system to quantify
the quality of data used to report and register emissions reductions.
Clearly, some forms of data are more reliable than others. However, NLA
disagrees with the provisions that preclude the registration of
emissions reductions unless a specified average rating level is
achieved.

First, this approach prejudges what Congress may decide to do in a
future program that creates credits or otherwise recognizes registered
emissions reductions. Congress may choose a different rating system, or
no rating system at all. In such a case, DOE's rating system would have
precluded the registration of reductions that would have been recognized
under a future statutory program. This limitation is unnecessary. If DOE
allows any reductions to be registered, as long as the data quality
ratings are calculated and reported, it can be left to future decisions
by Congress, and to a potential market for credits, to determine what
value to assign to the reductions. Entities with access to
higher-quality data will still have a strong incentive to use it,
because of the uncertainty of the future value of lesser-quality data.
But entities that do not have access to higher-quality data would still
be encouraged to seek and to register reductions.

Second, there are inconsistencies in the rating system that makes it
unfair to exclude registration of some reductions. The ratings do not
have the same meaning across industrial sectors. Thus, for example,
entities in one industry could be able to register reductions using a
mass balance approach, while entities in another industry could be
precluded from doing so because of a lower rating for mass balance data.
Again, these distinctions are unnecessary as long as the ratings are
calculated and reported. Congress---and the market---can determine how
ultimately to evaluate registered reductions in the various sectors. It
is premature for DOE to do so.

NLA also agrees with other commenters that the rating system places
undue emphasis on the direct measurement of greenhouse gas emissions,
especially in industries in which direct measurement is uncommon. The
1605(b) program should allow for the reporting of voluntary actions, but
it should not be a technology-forcing program. It should encourage
emissions reduction by making registration as simple as possible, not by
imposing new measurement techniques not required under any other laws.

8.  **Entities should be permitted to register reductions resulting from
    declines in production**

The General and Technical Guidelines continue to exclude from
registration absolute emissions reductions resulting from declines in
production. NLA strongly opposes this approach, and believes that any
reductions occurring after the base year should be eligible for
registration. The approach taken in the Guidelines prejudges the
direction Congress might take in creating a tradable emissions credit
program (or any other program in which registered reductions are
recognized). As NLA explained in its previous comments, there are a
number of reasons Congress could choose to recognize reductions
resulting from declines in production.

First, excluding these reductions adds an unnecessary level of
complexity into the reporting process, in which entities with declines
in production will be required to allocate emissions reductions between
production declines and other actions. Second, reduction in production
of certain products, or switching to other products, may be part of an
effective emissions reduction program, and should not be penalized.
Indeed, if an effective market in tradable reduction credits eventually
develops, for some companies it may make sound economic sense to close a
marginal operation in order to obtain valuable emissions reduction
credits---and such decisions should be encouraged. Finally, this
approach is contrary to the international approach to greenhouse gas
emissions trading, in which nations with economic declines expect to be
able to trade emissions reduction credits.

DOE could require reporters to indicate what portion of emissions
reductions were attributable to declines in production, while still
allowing the reductions to be registered. It could also require
reporters to provide additional information (such as whether the
reduction results from moving operations to another country) that could
affect later decisions by Congress on whether to provide credit for the
reductions.

**9**. **DOE should allow reporting in English units**

The General Guidelines provide for the reporting of emissions and
emission reductions in metric units. Much of American industry,
including the lime industry, measures fuels, products, and air emissions
in English units. Existing regulatory requirements under the Clean Air
Act and other statutes are generally stated in English units, as well.
To most of the American public, the term "ton" means a short ton of 2000
pounds, not a metric ton. Accordingly, NLA believes that reporting under
the 1605(b) program should be in English units rather than metric units,
or, at least, that reporters be permitted to choose which system to use.

> **10. DOE should reopen the comment period on the Guidelines when the
> forms for reporting and registering emission reductions are released**

When the General Guidelines were proposed for comment in 2003,
commenters (including NLA) stated that it was difficult to comment
effectively because the accompanying Technical Guidelines had not been
proposed. While NLA appreciates that both the General and Technical
Guidelines are now available for comment, now the forms that will be
used for reporting and registering have not been released, even in draft
form. Once again, this makes comprehensive comments difficult. When the
forms are made available for comment, NLA urges DOE to reopen the docket
for comments on the Guidelines as well, because issues that first appear
in connection with the forms may affect the Guidelines.

NLA appreciates the opportunity to comment on these important issues.

Very truly yours,

/s/

Hunter L. Prillaman

Director, Government Affairs

National Lime Association

200 N. Glebe Road

Arlington, VA 22203

703-908-0748

hprillaman@lime.org

[^1]: The current Guidelines allow such specific emission factors to be
    used only if a contract exists to provide energy from a specific
    source. However, NLA believes that in most cases specific emission
    factors are available from energy suppliers for the energy supplied
    in the previous year, even without such a contractual relationship.