The Climate Registry: The Registry & The Protocol August 2008 Judy Collora, PE Senior Consultant

Outline  The Climate Registry (TCR) Overview  Greenhouse Gas Basics  TCR Protocol  Example Calculation

The Climate Registry – Process  Registry  Houses emissions, transactions  Protocol  Guidance on how to perform inventory  3 rd party Verification  Publish (public data)

The Climate Registry – Background (1)  Created in 2007  Purpose  Establish and endorse voluntary entity-wide GHG registry that collects data consistently across jurisdictions  Encourage entities to join  Incorporate quantification methodologies into future mandatory programs  Current membership covers 80% of populations in the US and Canada (includes most of southeast)

The Climate Registry – Background (2)

The Climate Registry - Tools  General Reporting Protocol V1.1 released May 2008  Developed through a public stakeholder process  Drawn from existing protocols  Developing industry-specific reporting protocols  Power  Oil & Gas  Municipal  General Verification Protocol V1.0 released May 2008  Required to verify emissions  Should be separate from company performing the inventory (conflict of interest)  Climate Registry Information System (CRIS) launched in July 2008  On-line GHG calculation, reporting, and verification tool  Will have ability to calculate emissions in CO2e and aggregate emissions data by facility, state, county and entity  Public access to The Climate Registry’s verified emission reports

Common Terms (1)  TCR: The Climate Registry  GHG: Greenhouse Gas  GWP: Global Warming Potential  CO2e: CO2 equivalents  Direct Emissions: Company’s stationary and mobile sources  Indirect Emissions: Imported steam and power  Other Indirect Emissions: 3 rd party /tolling sources

Common Terms (2)  Operational/Financial Control Approach  Equity Share Approach  IPCC: Intergovernmental Panel on Climate Change  WBCSD: World Business Council for Sustainable Development  WRI: World Resources Institute

Overview of Scope and Type of GHGs Source: WRI/WBCSD GHG Protocol Corporate Accounting and Reporting Standard (Revised Edition), Chapter 4.

Sources of Greenhouse Gases

Comparison of Global Warming Potentials from IPCC’s Second and Third Assessment Reports Source: California Climate Action Registry General Reporting Protocol, April 2008

Calculating CO 2 e  CO 2 e is carbon dioxide equivalent  CO 2 e reflects the global warming potential (GWP) of each greenhouse gas relative to carbon dioxide, which has a GWP of 1 Emission rate = 400 tpy CH 4 CH 4 GWP = tpy CH 4 x 21=8,400 tpy CO 2 e

Control vs. Equity Approach  Control = you make the EHS decisions  Equity = you have a financial stake only  Example for company with financial interest (equity), but no control: Operations =8,400 tpy CO 2 e No management control = 0 tpy CO 2 e 10% equity share = 840 tpy CO 2 e

TCR Protocol – Where to Find It

TCR Protocol – What it Covers  Geographic Scope  Must report emissions sources in all of Canada, Mexico, and United States  Must indicate if any facility is located on lands designated to Tribal Nations (Registry members)  Can report worldwide emissions  Organizational Scope  Operational Control Approach  Equity Approach  Can report either or both  Special Considerations for Lease Treatment (Capital vs. Operational leases)  Emissions Scope  Must report Direct (Scope 1) and Indirect (Scope 2)  All 6 GHGs  Stationary and Mobile sources (combustion, process, and fugitives)  Imported Steam, Heat, and Power  Can report Other Indirect (Scope 3) – e.g., captive tolling, employee commuting

TCR Protocol – Option for First 2 Years  Scope is reduced  Transitional report  CO 2 emissions only  Stationary combustion  All operations in at least one state  Typically based on operational control approach  Must be Verified by 3rd party

TCR Protocol – Other Items  Base Year Designation  First year of full reporting (not transitional years)  Update if emission changes exceed 5% of base year emissions  No adjustments for acquisition (or insourcing) or divestments (or outsourcing) that were not in the base year  De minimis Emissions  5% of total emissions (Scope 1 and 2)  All emission sources accounted for in base year report cannot be deemed de minimis in future years (even if emissions drop below 5%) – ensures comparability to base year  Efficiency Metrics – optional (e.g., tonnes CO2e per widget produced)  Verification  Required annually by third-party  Five-year verification cycle  Reporting Timeline  Emissions submitted by June 30 and verified by December 15

Locating Emission Factors  IPCC Guidelines for national inventory calculations and emission factors  Database on Greenhouse Gas Emission Factors (EFDB)  Contains IPCC default emission factors  Search by source/sink categories, fuel type, and emission gases  Other sector/general protocols (California Climate Action Registry)  EPA’s Air Pollutant Emission Factors, AP-42

Example: Direct Emissions from Stationary Combustion  Step 1: Identify all types of fuels combusted  Step 2: Determine annual consumption of each fuel  Step 3: Select appropriate emission factor for each fuel  Step 4: Calculate each fuel’s CO 2 emissions  Step 5: Calculate each fuel’s CH 4 and N 2 O emissions  Step 6: Convert CH 4 and N 2 O to CO 2 e and sum all GHG emissions Note: assumes operational control, i.e., 100% of CO2e emissions

Example – Acme Widget Co. Stationary Combustion Sources  Step 1: Identify fuel – natural gas  Step 2: Annual fuel consumption  Step 3: Select appropriate emission factors (Table 12.1 of TCR Protocol)  CO 2 = kg/MMBtu  CH 4 = kg/MMBtu  N 2 O = kg/MMBtu

Example – Acme Widget Co. Stationary Combustion Sources  Step 4: Calculate CO 2 emissions  Step 5: Calculate CH 4 and N 2 O emissions

Example – Acme Widget Co. Stationary Combustion Sources  Step 6: Convert to CO 2 e and sum all GHG emissions

Conclusions  If you’re not developing a climate change strategy that includes a GHG emission inventory, consider acting now to ready yourself for future mandatory requirements.  Leave yourself time to correct inconsistencies or recordkeeping issues (data gaps) before mandatory requirements are knocking at your door  Consider basing your emission inventory after TCR’s protocol – likely future transition will be more seamless and you will be better prepared.  Over the long term, GHG emissions are a business asset. Therefore, accurate carbon quantification and well- conceived carbon strategy are a must.

Questions?