§ 300.6 Emissions inventories. ( a ) *General.* The objective of an emission inventory is to provide a full accounting of an entity's emissions for a particular year, including direct emissions of the first six categories of gases listed in the definition of “greenhouse gases” in § 300.2, indirect emissions specified in paragraph (e) of this section, and all sequestration or other changes in carbon stocks. An emission inventory must be prepared in accordance with Chapter 1 of the Technical Guidelines (incorporated by reference, see § 300.13). An inventory does not include avoided emissions or any offset reductions, and is not subsequently adjusted to reflect future acquisitions, divestitures or other changes to the reporting entity (although a reporting entity often makes these types of adjustments when calculating emission reductions under the guidelines). Entity-wide inventories are a prerequisite for the registration of emission reductions by entities with average annual emissions of more than 10,000 metric tons of CO2 equivalent. Entities that have average annual emissions of less than or equal to 10,000 metric tons of CO2 equivalent are eligible to register emission reductions associated with specific activities without also reporting an inventory of the total emissions, but such entities should inventory and report the emissions associated with the specific activity(ies) they do cover in their reports.
( b ) *Quality requirements for emission inventories.* The Technical Guidelines (incorporated by reference, see § 300.13) usually identify more than one acceptable method of measuring or estimating greenhouse gas emissions. Each acceptable method is rated A, B, C or D, with A methods usually corresponding to the highest quality method available and D methods representing the lowest quality method that may be used. Each letter is assigned a numerical rating reflecting its relative quality, 4 for A methods, 3 for B methods, 2 for C methods and 1 for D methods. Entities that intend to register emission reductions must use emission inventory methods that result in a quantity-weighted average quality rating of at least 3.0. ( 1 ) Entities may at any time choose to modify the measurement or estimation methods that they use for their current or future year emission inventories. Such modifications would enable entities to gradually improve the quality of the ratings over time, but prior year inventories may be modified only to correct significant errors.
( 2 ) Entities that have had their emission quantities and the quantity-weighted quality rating of their emissions inventory independently verified may report their emissions and average quality ratings by greenhouse gas, indirect emissions and sequestration, rather than by source or sink category.
( 3 ) Entities that certify that they have used only A or B methods, may forego indicating in their reports the quality ratings of the methods used and may forego calculating the quantity-weighted average quality of their emission inventories.
( c ) *Using estimation methods not included in the Technical Guidelines.* An entity may obtain DOE approval for the use of an estimation method not included in the Technical Guidelines (incorporated by reference, see § 300.13) if the method covers sources not described in the Technical Guidelines, or if the method provides more accurate results for the entity's specific circumstances than the methods described in the Technical Guidelines. If an entity wishes to propose the use of a method that is not described in the Technical Guidelines, the entity must provide a written description of the method, an explanation of how the method is implemented (including data requirements), empirical evidence of the method's validity and accuracy, and a suggested rating for the method to DOE's Office of Policy and International Affairs (with a copy to EIA). DOE reserves the right to deny the request, or to assign its own rating to the method. By submitting this information, the entity grants permission to DOE to incorporate the method in a future revision of the Technical Guidelines.
( d ) *Direct emissions inventories.* Direct greenhouse gas emissions that must be reported are the emissions resulting from stationary or mobile sources within the organizational boundaries of an entity, including but not limited to emissions resulting from combustion of fossil fuels, process emissions, and fugitive emissions. Process emissions (*e.g.*, PFC emissions from aluminum production) must be reported along with fugitive emissions (*e.g.*, leakage of greenhouse gases from equipment).
( e ) *Inventories of indirect emissions associated with purchased energy.* ( 1 ) To provide a clear incentive for the users of electricity and other forms of purchased energy to reduce demand, an entity must include the indirect emissions from the consumption of purchased electricity, steam, and hot or chilled water in the entity's inventory as indirect emissions. To avoid double counting among entities, the entity must report all indirect emissions separately from its direct emissions. Entities should use the methods for quantifying indirect emissions specified in the Technical Guidelines (incorporated by reference, see § 300.13).
( 2 ) Entities may choose to report other forms of indirect emissions, such as emissions associated with employee commuting, materials consumed or products produced, although such other indirect emissions may not be included in the entity's emission inventory and may not be the basis for registered emission reductions. All such reports of other forms of indirect emissions must be distinct from reports of indirect emissions associated with purchased energy and must be based on emission measurement or estimation methods identified in the Technical Guidelines (incorporated by reference, see § 300.13) or approved by DOE.
( f ) *Entity-level inventories of changes in terrestrial carbon stocks.* Annual changes in managed terrestrial carbon stocks should be comprehensively assessed and reported across the entity, and the net emissions resulting from such changes included in the entity's emissions inventory. Entities should use the methods for estimating changes in managed terrestrial carbon stocks specified in the Technical Guidelines (incorporated by reference, see § 300.13).
( g ) *Treatment of de minimis emissions and sequestration.* ( 1 ) Although the goal of the entity-wide reporting requirement is to provide an accurate and comprehensive estimate of total emissions, there may be small emissions from certain sources that are unduly costly or otherwise difficult to measure or reliably estimate annually. An entity may exclude particular sources of emissions or sequestration if the total quantities excluded represent less than or equal to 3 percent of the total annual CO2 equivalent emissions of the entity. The entity must identify the types of emissions excluded and provide an estimate of the annual quantity of such emissions using methods specified in the Technical Guidelines (incorporated by reference, see § 300.13) or by using the Simplified Emissions Inventory Tool (SEIT). The results of this estimate of the entity's total excluded annual emissions must be reported to DOE together with the entity's initial entity statement.
( 2 ) After starting to report, each reporting entity that excludes from its annual reports any *de minimis* emissions must re-estimate the quantity of excluded emissions after any significant increase in such emissions, or every five years, whichever occurs sooner.
( h ) *Separate reporting of domestic and international emissions.* Non-U.S. emissions included in an entity's emission inventory must be separately reported and clearly distinguished from emissions originating in the U.S. Entities must identify any country-specific factors used in the preparation of such reports.
( i ) *Covered gases.* Entity-wide emissions inventories must include the emissions of the first six categories of named gases listed in the definition of “greenhouse gases” in § 300.2. Entities may report chlorofluorocarbons and other greenhouse gases with quantifiable climate forcing effects as long as DOE has established a method for doing so, but such gases must be reported separately and emission reductions, if any, associated with such other gases are not eligible for registration.
( j ) *Units for reporting.* Emissions and sequestration should be reported in terms of the mass (not volume) of each gas, using metric units (*e.g.*, metric tons of methane). Entity-wide and subentity summations of emissions and reductions from multiple sources must be converted into CO2 equivalent units using the global warming potentials for each gas in the International Panel on Climate Change's Third Assessment (or most recent) Report, as specified in the Technical Guidelines (incorporated by reference, see § 300.13). Entities should specify the units used (*e.g.*, kilograms, or metric tons). Entities may need to use the standard conversion factors specified in the Technical Guidelines to convert existing data into the common units required in the entity-level report. Emissions from the consumption of purchased electricity must be calculated by region (from the list provided by DOE in the Technical Guidelines) or country, if outside the United States. Consumption of purchased steam or chilled/hot water must be reported according to the type of system and fuel used to generate it (from the list provided by DOE in the Technical Guidelines). Entities must convert purchased energy to CO2 equivalents using the conversion factors in the Technical Guidelines. Entities should also provide the physical quantities of each type of purchased energy covered by their reports.