The Business Implication of Emissions Reporting (PRTR)

Are you required to comply with a variety of pollutant or greenhouse gas emission reporting programs around the world?  In an effort to comply with a variety of pollutant or greenhouse gas emission reporting programs, do you find that your company is analysing a large amount of pollutant emission data?  As a result of pollutant or greenhouse gas emission reporting, have you been subject to an additional tax or experienced problems obtaining permits? Are you concerned about how the emissions information you report might be used as emissions trading schemes expand?

Two Enhesa webinars in November 2009 presented information about the costs and complexities of complying with pollutant and greenhouse gas reporting laws and regulations around the world.  Numerous countries including the United States, European Union and Member States, Japan, Brazil and Australia have adopted pollutant emission and greenhouse gas reporting programs.  Other countries, such as Chile, are in the process of adopting reporting programs.  Typically, under an emissions reporting program, a facility or corporation is required to report to a government agency any pollutant emitted into the air, land and water and transfers of substances for disposal or recycling.  The government agency may then make the emission information available to the public.

What facilities are covered?

The number of facilities required to report varies from country to country.  Figure 1 shows that the European Union Pollutant Release and Transfer Register (European PRTR) covers the most facilities.  Notably, the number of facilities required to report doubled with the implementation of the European PRTR.  Under the earlier program, the European Pollutant Emission Register, only 12,000 facilities were required to report.

What substances are reportable?

The number of substances covered varies from country to country.  Figure 2 shows the number of reportable substances under different reporting schemes – ranging from 650 under the United States’ Toxic Release Inventory Program to 91 under the European Union PRTR.  While the variation between the numbers of reportable substances is partially the result of different methods of classifying substances, there are instances when a pollutant emission reporting program excludes a substance from being reported.  For example, a facility is not required to report emissions of Vanadium under the European PRTR, but a facility located in the United States, Canada, Norway and one European Union Member State, Spain, would be required to report emissions of the this substance.

Multinational companies must meet different requirements in each country

As a result of the adoption of pollutant and greenhouse gas reporting programs around the world, multinational corporations face a number of challenges to effectively comply with these emission reporting programs.  In response to an Enhesa Survey, EHS professionals identified the challenges of effectively complying with pollutant emission reporting programs. These challenges include analysing different reporting requirements for pollutant emission reporting programs; compiling, analysing and submitting a large amount of pollutant emission data; and keeping abreast of regulatory developments around the world.  For example, the emissions threshold, which determines whether a facility is required to report pollutant emissions, differs from country to country.  Under the United States’ Toxic Release Inventory, the emissions threshold is determined by the volume of substances handled by a facility.  Under the European PRTR, the emissions threshold is determined by the volume of substance that is emitted to air, water or land.  Due to these differences, corporations must separately analyse different requirements in each country to determine if similar facilities located in different countries are required to report pollutant emissions.

Over the years emissions have become an important issue at corporate level.  Almost 70 per cent of the companies surveyed compile facility emission data at corporate level.  Compiling consistent data at corporate level is easier said than done.  Due to different measurement units, thresholds and measurement methods, one runs the risk of comparing apples to oranges.  Figure 3 illustrates that almost 60 per cent of the companies who compile emission data at corporate level usually or always standardize the thresholds and measurement methods.  Fourteen per cent of the companies surveyed never standardize or calibrate.

Reporting your greenhouse gas emissions can have significant business impacts

For a multinational corporation, the cost of compliance not only involves potential penalties for non-compliance, but also potential impacts such as carbon taxes, damage to reputation and more stringent review of permits  A number of countries, including France, Sweden as well as the Canadian Province of British Columbia and a United States municipality, Boulder, Colorado, have enacted carbon taxes.  Additionally, a number of countries have adopted or are in the process of implementing cap and trade programs for greenhouse gas emissions.  Since 2005, facilities that meet the emissions thresholds in the European Union and Member States have been required to participate in the European Greenhouse Gas Emission Trading System.  The American Clean Energy and Security Act of 2009, which would establish a cap-and-trade program, passed the United States House of Representatives on 26 June 2009.  The business implications of emissions reporting tend to have a poor visibility at corporate level, because only 24 per cent of EHS professionals track taxes and charges resulting from emission reporting.  Figure 4 illustrates that 55 per cent of EHS managers participating in the survey corporate level do not track emission taxes or charges at all.

Emissions data can impact your company’s reputation

Providing pollutant and greenhouse gas emission information publically can impact the reputation or public perception of a company, which can affect company revenue and, in some instances, the ability of a facility to operate.  Emissions reporting can also have a serious impact on the company’s ability to obtain a permit.  Thirteen per cent of EHS managers surveyed acknowledged problems obtaining permits as a result of reporting pollutant emissions.

A key purpose of most emission reporting schemes is to name and shame polluters.   Figure 5 illustrates that 20 per cent of the EHS managers surveyed have had their facility identified as the largest polluter in their region, water basin or industry.  Although it is well known that being the first to tell the bad news provides the best options to limit the damage, only 27 per cent of those surveyed systematically asses how their facilities appear in public registers.

Despite some of the weaknesses identified, most companies do have a corporate EHS program to leverage the benefits of the multinational corporation by identifying best practices and techniques to reduce emissions, and to focus attention and resources to reduce emissions as appropriate.  More than 60 per cent of those surveyed have a program in place to reduce emissions to avoid a vulnerable position including production process optimization, capital investment and end-of-pipe abatement.

From the research conducted by Enhesa it appears that corporate environmental managers can assess the maturity of their corporate program in terms of managing emissions reporting on a number of critical elements:

  1. Identify the countries where you operate that have mandatory, expanding or pending emission reporting programs.
  2. Determine whether your facilities are caught up by it and how, or how far below the reporting thresholds they are.
  3. Identify the emission information each facility is required to report, and put in place a system to comprehensively measure, compile, analyse and submit emission information at facility and corporate level.
  4. Track the financial repercussions of emissions reporting (taxes, charges, etc) at facility and corporate level.
  5. Determine how the facilities appear in the register compared to the local pollution problems as well as compared to others from the industry sector (who is the biggest polluter?).
  6. Consider how the company is communicating on its emissions reports to protect its corporate reputation and its right to operate (permit)

For a copy of the presentation and access to the webinar recording please contact us at webinars@enhesa.com.

–          Jonathan Nwagbaraocha
Enhesa EHS Consultant


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