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August 25, 2005

Mr. Stephen E. Calopedis

U. S. Department of Energy

Energy Information Administration, EI-81

1000 Independence Avenue, S. W.

Washington, D. C. 20585

Submitted by email to: [stephen.calopedis@eia.doe.gov]{.underline}

**Comments on Revised Form EIA-1605 and Instructions for "Voluntary
Reporting of Greenhouse Gases"**

The American Forest & Paper Association (AF&PA) appreciates the
opportunity to submit comments on the Energy Information Administration'
(EIA's) revised forms and instructions for the 1605(b) voluntary
greenhouse gas registry.[^1] AF&PA, the trade association and leading
voice for the forest products industry, represents over 200 companies
and related associations. AF&PA members produce over 80 percent of the
wood, paper, and other forest products manufactured in the United
States; our members include both industrial and non-industrial private
land owners, large multi-product producers, and family-owned facilities.

We hope our recommendations are helpful as EIA evaluates responses to
its proposal. AF&PA has considerable interest in greenhouse gas related
issues. We participate in the Administration's Climate VISION program.
We have submitted comments at every opportunity on proposed changes to
the voluntary registry, met with the Administration's representatives on
1605(b) issues, and participated in several Department of Energy (DOE)
and Department of Agriculture (USDA) workshops related to 1605(b). The
1605(b) reporting program is important to AF&PA and its members, and
changes to the voluntary registry are necessary to provide a clear and
concise tool for greenhouse gas registration and accounting.

We recognize that the EIA forms and instructions were proposed before
DOE and USDA had an opportunity to incorporate changes from the last
round of comments submitted June 22, 2005, and we assume that changes
will be made to both the General and Technical guidelines. Because
comments have not been resolved, all of the comments AF&PA submitted on
DOE's proposed revisions to the program[^2] apply to the EIA forms. A
copy of AF&PA's previous comments (filed June 22, 2005) is attached.

Additionally, some concerns we raised in our June comments have been
heightened by review of the forms. In other instances, reviewing the
forms and relating them to the guidelines have revealed new issues of
concern. Thus, we feel compelled to call certain policy issues to the
attention of participating Agencies.

**Land Use Concerns**

AF&PA members are extremely concerned with the request for land-use
information as part of the effort to track carbon flux. It is
inappropriate for DOE to require participants to report on land-use
change as a part of a voluntary greenhouse gas reporting program.
Land-use decisions are based on business needs that are unrelated to
greenhouse gas emissions, and by requesting such data, the government
appears to be taking steps that would limit the future use of private
property. We believe that such an intrusion into the land-use decisions
of private land owners is contrary to land use practice in the US.

Moreover, the request for land use information appears to single out the
forest products industry by requesting information on changes in forest
land use, specifying that changes in land use must be reported when land
is used for the "production of goods and services," and requesting
information on any changes in sustainably managed forest acreage.

We find this perplexing and wonder why one class of landowners should be
asked to carry an additional reporting burden, and potentially a
property right restriction, not imposed on other landowners? If the
information being requested is *not* to be used to place future land use
restrictions on these owners, then why collect it in the first place? If
the information *is* to be used to place restrictions on one class of
landowners, then how can that be fair?

Our concern -- as raised by the EIA forms and instructions - is
explained in detail below.

> **Forest Land Use Change**
>
> Schedule III, Table D.1 requests information on changes in carbon
> stocks from changes in ***forest land*** use. Specifically, the
> instructions define land-use change as "a change in land
> classification between forest land and these categories: cropland,
> grassland, and developed land (including urban land)."
>
> The instructions single out changes in forest land use, and the broad
> nature of the instructions would appear to indicate that forest land
> owners are responsible for tracking and reporting on land use change
> -- even when that land is sold.
>
> We were told in a meeting with USDA and DOE that the intent of the
> program -- as laid out in the Technical Guidelines -- is to collect
> data only on land that is under an entity's control.[^3] However the
> Technical and General Guidelines are in conflict on how land use
> change should be reported.

-   [Technical and General Guideline Land-Use
    Inconsistencies]{.underline}

> The Technical Guidelines \[Section 4.2.2.1.1 page 260\] indicate that
> when land is sold an entity should "reduce its carbon stock estimates
> for the reporting year and the base period to reflect that the land is
> no longer under the entity's control."
>
> Conversely, the General Guidelines 300.6(a) state that an emissions
> and sequestration inventory is ***not*** subsequently adjusted to
> reflect future acquisitions and divestitures. By not removing divested
> land from the baseline, the General Guidelines imply that entities are
> responsible for land that is no longer under their control. This
> inconsistency needs to be resolved.
>
> **Incidental Lands -- Definition Based on Land Use**
>
> The program's effort to define land use is further confused in the
> instructions for determining whether or not land is classified as
> "incidental" and thereby exempt from estimating carbon flux. The EIA
> instructions specify that if land is used for "production of goods and
> services, the nature of the land-use change must be reported in the
> next inventory." Again, we think any requirement to report on land use
> change is inappropriate and outside the scope of a voluntary
> greenhouse gas registry.
>
> Further, the fact that the use of land for "production of goods and
> services" triggers a reporting requirement appears directed at forest
> product, agricultural, and other entities whose livelihood is directly
> tied to use of the land. We believe this requirement unfairly targets
> and burdens these industries and would apparently exempt land-owning
> entities such as utilities, insurers, investors, and colleges whose
> lands would be deemed "incidental."
>
> **Sustainably Managed Forestry Acreage**
>
> As specified in section 300.6 of the General Guidelines, the proposed
> EIA forms would require annual reporting of changes in carbon stocks
> from forestry activities. Forest owners using sustainable forest
> management are given the option of reporting no carbon flux on their
> land; however, Table A. 5 in Schedule III asks for the ***acres*** of
> land under the sustainable management program.
>
> If an entity is specifying that land is sustainably managed and
> reporting no net carbon flux, the number of acres involved is
> irrelevant. Again, this appears to be an inappropriate request for
> land use information.
>
> The information requested in Table A.5 in Schedule III may be
> *interesting* to know, but it is not *necessary* to know. Imposing the
> cost and burden of reporting information solely for the purpose of
> satisfying such curiosity will reduce the number of companies electing
> to participate in this voluntary program. If, on the other hand, DOE
> and USDA believe that this information is necessary, then this belies
> the government's stated policy position that sustainably managed land
> is carbon neutral over the long term and therefore requires no
> additional accounting.

**[AF&PA Land Use Recommendation]{.underline}**

All requests for information on land use change should be deleted. Such
information has no bearing on an entity's greenhouse gas emissions or
reductions.

-   Specifically, the provisions in the General Guidelines \[section
    300.5(h)(iv)\] -- which call for reporting on significant changes in
    landholdings -- should be deleted, and corresponding requests for
    such information should be deleted from the EIA forms.

-   The request for the number of acres included in a sustainable
    forestry management program should be deleted from the EIA forms.

**Annual Entity-Wide Reporting of Emissions and Sequestration**

As noted in our previous comments, AF&PA members are extremely concerned
about requirements for annual reporting of sequestration and the burden
it places on our industry. If a property owner is not claiming a
sequestration reduction, it makes no sense for the government to require
a participating entity to track sequestration and report on acreage. By
doing so, the government is establishing complex and costly burdens for
land owners and discouraging participation in the program.

**[AF&PA Sequestration Reporting Recommendation]{.underline}**

Forest products industry participation could be encouraged by making
sequestration reporting more flexible. The requirements of sections
300.6(a) and 300.6(f) -- which require reporting on annual changes in
sequestration or managed carbon stocks -- should be deleted.

**Projects -- or Action Specific Methods -- to Increase Sequestration**

The annual reporting of emissions and sequestration should be decoupled,
and any increases in sequestration should be reported as optional
offsets to emissions.

**[AF&PA Sequestration Project Recommendation]{.underline}**

AF&PA strongly recommends that the General and Technical Guidelines and
EIA forms be modified as follows to allow the use of projects -- or
action specific methods -- to increase sequestration:

-   Landowners using sustainable forest management (SFM) practices --
    and thus operating carbon neutral forests on a long term basis --
    should be provided the option of undertaking and being recognized
    for projects (or action specific methods) that increase forest
    carbon over and above what sustainable management provides.

-   Landowners undertaking such projects also should be provided the
    option of registering their project (or action specific) reductions
    in the 1605(b) registry and continuing to report on these projects
    over time.

**Emissions and Sequestration Inventory Issues** \[Schedule III\]

**Biomass Combustion** \[Schedule III, Table A.1\]

The instructions appropriately note that "CO~2~ emissions from biogenic
fuels (e.g. bagasse, wood, wood waste, and ethanol) do not count as
anthropogenic emissions according to the Framework Convention on Climate
Changes (FCCC) guidelines."

AF&PA has two critical observations regarding implementation of this
provision:

-   [Reporting on Biomass Emissions]{.underline} -- Contrary to the EIA
    instructions, the biomass CO~2~ emissions are *incorrectly* added to
    the subtotal of direct emissions from stationary combustion in
    Schedule III, Table A.1. This is in conflict with the policy stated
    in the General and Technical Guidelines. While we have been given
    verbal assurance that inclusion of the biomass emissions with direct
    emissions is an error, we want to clearly note that biomass emission
    of CO~2~ should be reported separately from direct emissions and not
    added into the total of other direct emissions.

> If biomass emissions are appropriately identified as not contributing
> to net atmospheric concentrations of carbon, there is no value in
> requiring the reporting of this information as a direct emission.
> Further, it is intellectually inconsistent to hold the position that
> biomass is carbon neutral and to then request the reporting of such
> emissions as part of an entity's direct greenhouse gas emissions.

-   [Examples of Biomass Fuels]{.underline} -- The list of examples of
    biomass fuels should be expanded to include spent pulping liquor and
    other biomass-based materials. We recommend that the list of
    examples read, "bagasse, ethanol, biomass-based materials including
    wood, wood waste, spent pulping liquors, and coproducts from
    conversion." Additionally, the instructions should specify how to
    report on biodiesel and other fuels containing ethanol made from
    biomass.

**Biomass and Lime Production** \[Schedule III, Table A.3 -- Sector
Specific Process Emissions\]

The instructions should clearly state that CO~2~ emissions resulting
from the pulp and paper industry's conversion of calcium carbonate into
lime as part of the Kraft pulping and recovery process are not reported
as lime emissions. As recognized in various conversations with EPA,
these emissions are biogenic emissions; thus, they should be reported as
biomass CO~2~ emissions. It is our understanding that the next version
of the US national greenhouse gas inventory will treat them as such.[^4]

**Wood Products** \[Schedule III, Table D.2\]

Reporters are provided with two options for reporting on the carbon
stored in wood products. The first method determines the carbon flux on
a yearly basis; the second method estimates the carbon remaining after
100 years. Only the second method is valid from an industrial
perspective, as it is simple, easy to use, and avoids complicated
start-up effects. To simplify the process and avoid serious
miscalculations in the early years, AF&PA members strongly recommend
that only the 100-year method be used.

Forest products companies from around the world have endorsed the
100-year method for products in-use, and working through the
International Council of Forests and Paper Associations, they have
developed an easy to use calculation tool. The method is documented in
the paper entitled "The 100-year method for forecasting carbon
sequestration in forest products in use," in the GP GHG Protocol, and in
ISO14047/TR.[^5]^,^[^6]^,^[^7]

**Forest Preservation** \[Schedule III, Table D.4\]

The forms request data on conservation of existing terrestrial carbon
stocks through permanent easements and deed restrictions. Entities can
register 1/100^th^ of the baseline carbon stocks plus any incremental
increase over the base period in preserved forests.

As stated in our June 22, 2005 comments, AF&PA recommends that
registration of carbon in preserved forests and managed forests be
treated identically. The proposed 100-year formula for registering
existing carbon stocks in preserved forests should be eliminated and
only increases (or decreases) in existing carbon stocks should be
eligible for registration, or alternatively, the same treatment and
opportunity for registering existing carbon stocks should be given to
managed forest stands.

**Emissions Reduction Issues** \[Schedule V\]

**Avoided Emissions**

The forms collect data solely on avoided emissions associated with the
sale of energy products. However, the underlying definition of avoided
emissions in the General Guidelines is too narrow; thus the EIA forms
fail to collect data on valuable sources of avoided emissions. As noted
in our June 22, 2005 comments, the definition should be expanded to
include other activities such as those associated with recovery of paper
for recycling. We also think the program should recognize the efficiency
benefits of on-site use of electricity from combined heat and power
(CHP) systems. The advantages of each areas are explained below.

-   [Recovery of Paper for Recycling]{.underline} -- AF&PA members'
    Climate VISION commitment is based in part on recovery of paper
    which avoids methane emissions at landfills. In fact, to help meet
    our Climate VISION commitment, AF&PA announced a new paper recovery
    goal of 55 percent of all paper consumed in the United States
    by 2012. AF&PA expects that achieving the recovery rate of 55
    percent will lead to corresponding reductions in greenhouse gas
    emissions at landfills. Entities operating recycling facilities are
    able to accurately measure the volume of paper recovered for
    recycling and quantify the avoided greenhouse gas emissions; thus,
    AF&PA recommends that the forms and instructions be modified to
    accommodate data on avoided emissions from recycling.

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-   [Combined Heat and Power]{.underline} -- DOE says explicitly in the
    Technical Guidelines that the benefit of meeting energy demands with
    a CHP generator is "that the fuel use efficiency of most CHP systems
    is greater than what would be achieved by meeting electrical and
    thermal demands by separate processes." (1.F.3.4 - pg. 152). Given
    this recognition that CHP systems have greater fuel-use efficiency,
    it follows that they also reduce greenhouse gas emissions. AF&PA
    urges EIA and DOE to also recognize the "avoided" emissions from
    electricity generated by all such CHP systems and used to meet
    on-site energy needs. Avoided emissions should be recognized even in
    cases where power purchases and indirect emissions are unchanged
    from the base year, as the amount of purchased electricity would
    have been much greater without the use of CHP.

> One of the greatest opportunities to reduce CO~2~ emissions is through
> the use of CHP systems, but appropriate incentives must be in place to
> encourage investment in new CHP systems. The 1605(b) forms recognize
> the additional fuel and CO~2~ emissions from CHP-generation of
> electricity, but fail to recognize the offsetting reduction in CO~2~
> emissions associated with reduced electricity purchases. We estimate
> this reduction to be on the order of 30 percent or more.
>
> CHP plants likely will use more fossil fuel to produce electricity,
> but that fuel usage is offset by a reduction in purchased electricity.
> It is inappropriate to **only** reward exported energy because the CHP
> plant might only generate enough electricity to offset purchases from
> the grid. Under the 1605(b) methodology, a company using a CHP system
> would only see the increased CO~2~ emissions associated with the fuel
> needed to run the CHP plant and would not gain any benefit from the
> reduction in CO~2~ emissions associated with the displacement of
> purchased power from a utility or the power grid. Certainly, this will
> discourage CHP technology as a tool for CO~2~ reduction.

**Other Reporting Form Issues**

**Emissions from Combined Heat and Power**

When allocating emissions between steam and electricity from CHP
systems, the forest products industry's comments clearly indicate why
the 1605(b) program should use the widely accepted "efficiency method,"
a method supported under such well-accepted programs as the WRI/WBCSD
GHG Protocol and EPA's Climate Leaders program. This method allocates
the benefits of CHP more fairly than the approach currently proposed for
1605(b). The instructions, furthermore, raise several issues that would
affect the forest products industry's ability to report on CHP:

> **Thermal Benchmarks**

-   AF&PA recommends that DOE establish default thermal benchmarks (Form
    pg. 40) based on regional data or specific regional utility data.
    Data from regional utilities can provide a better estimate of the
    thermal benchmark for purposes of partitioning thermal and electric
    allocations and calculating avoided emissions.

> **Energy Export Concerns**

-   In the instructions beginning, "This method should be used by
    entities that had no emissions associated with exported energy in
    their Base Period (page 39, second paragraph)," it is unclear why
    this method is inappropriate for entities that have some emissions
    associated with exported energy in their base period, but where
    emissions are lower than the intensity benchmark, when those
    entities increase exports.  For example, increasing exports of low
    emission energy should be good whether or not the entity was
    exporting zero-emission or low-emission energy in the base period or
    not.

-   The section classifying what type of energy a facility exports
    (Instructions, pg. 40, Par. 1 and 2; form pg. 25.) is confusing as
    some forest products entities export power from renewable sources,
    yet are cogeneration facilities.  It would be clearer if all exports
    from non-utility entities were in one place.  In the forest products
    industry, exported electricity can come from biomass or fossil fuel,
    cogeneration or CHP, some non-cogeneration \[qualifying facilities
    are not all 100% cogeneration\] and small hydro.  Splitting this
    generation up is quite arbitrary.  A non-utility form should apply
    to all exported forms of electricity.

> **Penalization of Heat Production from CHP Systems**

-   This section is troublesome (Instructions, Page 56, second
    paragraph, last sentence refers to Section 2.4.6.3 of the Technical
    Guidelines for allocating emissions from CHP plants) because the
    allocation method recommended therein artificially penalizes heat
    production from CHP systems.  Comments were previously provided on
    this section of the Technical Guidelines and likewise, comments
    provided on Section 2.4.6.3 of the Technical Guidelines apply to
    this section of the instructions as well.

> **Erroneous Instructions**

-   An error was made (Instructions, Page 39, second paragraph) by
    referring the user to Part F.1 of the Schedule V forms to report
    reductions from energy exports, and referring the user to Part F.2
    of the Schedule V forms to report emissions from energy exports from
    CHP systems.  However, Parts F.1 and F.2 of the Schedule V forms
    pertains to geological sequestration of carbon, not energy exports.
    The instructions should refer to Part J of Schedule V forms, not
    Part F.

-   Another error was made, (Instructions, Page 54, second paragraph,
    last sentence) referring the user to Part F.2 of the Schedule V
    forms for entities exporting energy from CHP systems.  The
    instructions should refer to Part J of Schedule V forms, not Part F.

**Confidentiality**

There are several confidentiality issues present in the 1605(b) forms:

> **Confidentiality Letter**

-   While a request for confidentiality of the entire report may be made
    by checking a box \[Instructions, pg. 1., form, pg. 5, #13\] AF&PA
    strongly encourages DOE to stress the importance of submitting a
    letter about specific confidentiality issues.

-   DOE should clarify that a letter must be submitted with a report, in
    order to assure that reasons for confidentiality are taken into
    account (Instructions, pg. 11, #13; form, pg. 5, #13). 

-   It is imperative for DOE to acknowledge receipt of all
    confidentiality letters (Instructions, pg 8.).

> **Confidentiality within the Government**

-   DOE should make it apparent that the supplier of information will be
    notified if their confidential information is transferred to another
    part of the government (Instructions, pg. 8, #2). 

> **Freedom of Information Act**

-   DOE should notify reporters of any FOIA requests, regarding their
    confidential information.  (Instructions, pg.8, #4). Notification
    should be timely so reporters will have an opportunity to respond.

**Simplifying the Process and Forms**

We urge EIA and all agencies involved in the development of the registry
to make the request for information as straight forward and simple as
possible. If the process and corresponding forms are too complicated,
companies will not use the registry. From the perspective of our
industry, requirements to report on land use change are intrusive and a
definite disincentive to reporting.

The Agencies need to take the time to insure that the General and
Technical Guidelines and EIA forms and instructions are consistent. For
example, we have noted the need to consistently recognize the carbon
neutrality of biomass emissions.

Finally, we urge EIA, DOE, and USDA to carefully consider the need for
all requested information and to take the time needed to develop an
easy-to-use and simple process. There is little value in rushing to
complete the registry if the result is so complicated that companies are
dissuaded from using it.

Again, we appreciate the opportunity to submit comments on the EIA forms
and related policy issues. If you have any questions about the comments,
please contact Dee Gavora at 202-463-2709.

cc: Mark Friedrichs, DOE

Bill Hohenstein, USDA

Brian Hannegan, CEQ

[^1]: 70 Fed. Reg. 37798 (June 30, 2005)

[^2]: 70 Fed. Reg. 15169 (March 24, 2005)

[^3]: Meeting with Bill Hohenstein of USDA's Global Program Office and
    Mark Friedrichs of DOE's Office of Policy and International Affairs
    on August 4, 2005.

[^4]: For more information on these types of emissions see: "Methods for
    Estimating Greenhouse Gas Emissions from Lime Kilns at Kraft Pulp
    Mills, R. Miner and B. Upton, [Energy]{.underline}, 2002, pages 729
    -- 738.

[^5]: Miner, R., Accepted for publication, "The 100-year method for
    forecasting carbon sequestration in forest products in use,"
    [Mitigation and Adaptation Strategies for Global
    Change]{.underline}, Springer Science+Business Media B.V.

[^6]: GP GHG Protocol, Edition 2004,
    [www.gp.com/enviro/strategy/protocol.pdf]{.underline} , Appendix 1

[^7]: S.F Galeano, International Organization for Standardization, ISO
    14047/TR, Example 3, Geneva, 2003