Sustainability: Regulations

Preparing For A Carbon Cap-And-Trade Marketplace


For example, landfills are a natural source of methane, which a manufacturing facility can burn without fossil-based carbon emissions and possibly at a discount to the cost that would be paid through a traditional natural gas supplier. So if there is a landfill within a mile or two of a facility, there is a natural renewable energy source that could be utilized to help lower emissions and mitigate cap-and-trade costs.

Another option is to review whether or not a facility has a digestible waste or feedstock that can be converted into a renewable energy source. If a plant has its own wastewater treatment facility onsite, it likely has its own source of methane through anaerobic digestion. Another option (depending on the type of food processing plant) is to evaluate any feedstock waste it may produce and whether that waste can be converted into renewable energy.

Additionally, food processors can work with contractors to evaluate whether or not the facility has good wind power or solar power potential. In this case, state and federal incentives may be available to assist the plant install wind or solar generating devices to help power the plant and reduce emissions.

AM I SUBJECT TO THE NEW EPA REPORTING REQUIREMENTS?

Carbon dioxide equivalent emissions will have to be reported to the EPA beginning in 2010 for a broad swath of industrial, institutional and utility energy users (or distributors).

The EPA’s objective is to gain a clear understanding of all carbon emissions in the U.S. by source and entity. Industrial customers using more than 460,000 MMBtu per year of fossil energy (which amounts to 25,000 tons of carbon) will be required to report. In order to avoid double counting, utilities that are required to report also will net out large industrial users who report separately.

In addition, there are a number of industrial categories, including food processing, that are required to report. While 2010 seems far off, it is not too early to start planning how to collect and report the necessary information. In the current rules drafted by the EPA, there are specific protocols that food processors will have to follow, which can be reviewed on the EPA Web site published in the Friday, April 10, Federal Register (page 16,609, part 98 titled, “Mandatory Greenhouse Gas Reporting”).

WHAT CAN I DO TODAY?

Below are recommendations that can make the transition to a carbon-constrained marketplace easier:

1. Determine if your business is subject to reporting under the EPA’s GHG reporting rules;

2. Determine if your business is likely to be subject to cap-and-trade directly;

3. Assess the availability of information within your company required to comply with the reporting rules and/or cap-and-trade system;

4. Assess the potential operational impact of carbon pricing ranging from $12.50-$40.00 per ton;

5. Begin developing an inventory of potential energy conservation/renewable energy projects that could be implemented;

6. Consider preparing a company-wide Carbon Compliance Strategic Plan that would assess risks, identify opportunities and establish action items.

It is important to re-emphasize that the EPA reporting rules are likely to be in effect for 2010, which means there are action items that food processors need to implement before the end of 2009. These action items include the recalibration of plants’ energy meters and the creation of an ongoing daily monitoring plan that accurately captures the information necessary to report to the EPA.

As businesses prepare to move into a more aggressive carbon compliance and reporting marketplace, it is in food processors’ best interest to find ways to be in compliance with the new changes at the lowest possible costs in order to remain competitive.

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