The integrity, reliability, and continued operation of the U.S. Environmental Protection Agency’s (EPA) Greenhouse Gas Reporting Program (GHGRP) are essential for ensuring accurate emissions data, corporate risk management, and successful deployment of federal tax incentives for key energy technologies. EPA’s proposed rule “Reconsidering the Greenhouse Gas Reporting Program” (RIN 2060-AW76) would remove all but one source category from the program and would suspend reporting under the remaining category until 2034.
Reducing regulatory burdens and administrative costs should always be a priority, but the abrupt and near-complete repeal of the GHGRP would have significant negative impacts on the competitiveness of several U.S. economic sectors, including AI, oil and gas, and industrial manufacturing.
We do not discount the fact that the GHGRP can create regulatory and financial burdens for commodity and energy producers. However, in the aggregate, the GHGRP data infrastructure and EPA’s centralized repository are invaluable to American companies because of the increasing pivot towards greenhouse gas–based trade instruments in Europe and elsewhere. What’s more, entire tax credit regimes that are critical to American competitiveness in emerging technology sectors depend on the program’s administration. There’s a middle ground that requires neither business as usual nor a complete destruction of the program and its attendant benefits: a voluntary, opt-in approach to emissions reporting that maintains the trusted, consolidated platform for information. This solution would benefit those who wish to opt in without burdening those who choose not to.
Executive Summary
A complete repeal of the GHGRP and subsequent proliferation of private, state, and international regulations would lead to
1. A blunting of the United States’ competitive edge in artificial intelligence and data-center development
2. The loss of key data for efficient oil and gas production and the loss of industry’s access to global markets
3. Bureaucratic chaos for emerging energy technologies that use federal funding
4. Increased cost in exchange for lower-quality reporting for companies, including increased regulatory burdens imposed by states
Allowing companies to continue to comply with the GHGRP in some capacity would mitigate these damages and enable the continued growth of domestic energy and technology sectors.
History of the GHGRP
The GHGRP did not start as a mandate for climate regulations. Rather, it was designed under a Republican administration as a core program for information collection and transparency.
Legislative Mandate and Inception
The GHGRP was signed into law in 2007 under President George W. Bush as a voluntary program and enacted in the 2008 Appropriations Consolidation Act. The law directed EPA to establish a program for the reporting of greenhouse gas (GHG) emissions above certain thresholds across sectors of the U.S. economy. The EPA finalized the rule in 2009, and data collection began in 2010.
- Program Scope: The program requires large GHG emission sources, fuel and industrial gas suppliers, and injection sites to report their annual emissions. It currently covers approximately 85–90 percent of total U.S. GHG emissions from over 8,000 unique sources. It requires emissions reporting from direct emissions sources that exceed 25,000 metric tons CO2e per year. Some sources, including those involved in aluminum, cement, and ammonia production; electricity generation; and landfills, are required to report emissions regardless of the volume of emissions.
- Legal Authority: As directed by Congress, in its initial rulemaking, EPA cited multiple sections of the Clean Air Act (Sections 114, 208, 821) as the legal basis for implementing the program compulsorily.
How the GHGRP Creates Value for Business
For companies with emitting facilities or covered operations in the United States, the GHGRP provides a centralized, standardized, government-backed, and cost-effective mechanism for emissions accounting, which is increasingly critical for internal management and external credibility. Over the past decade, EPA has developed rigorous technical methodologies for calculating GHG emissions from over two dozen source categories, providing a comprehensive and internally consistent accounting framework.
Verifiable Government Data and Cost-Effectiveness
The GHGRP’s utility stems from its status as a single, unified federal standard for emissions monitoring, reporting, and verification (MRV).
- Trade Policy and Oil and Gas Export Advantages: U.S. oil and gas producers are differentiating their products. The GHGRP provides publicly accessible, government-verified facility-level data, which can demonstrate the superiority of American energy and commodity exports without forcing businesses to develop and adopt new voluntary standards that lack the support of the U.S. government.
- Advantage in AI and Data-Center Development: As the AI race ramps up, the United States has established a strong lead by making use of its robust infrastructure, policy, and resource advantages. However, as new interconnection and generation costs increase emissions and (in some cases) electricity rates, large-scale data-center development has increasingly yielded local resistance. The GHGRP provides hyperscalers a turnkey reporting framework to address transparency concerns.
- Low Cost of Compliance: Compliance with the GHGRP, while requiring initial investment, is generally of relatively low cost to reporting entities compared to the burden and expense of independent third-party verification, which would otherwise be required to meet investor or regulatory demands. By providing an inherently government-verified and quality-assured dataset, the GHGRP eliminates the need for redundant, costly audits across various voluntary frameworks, thus streamlining corporate reporting and reducing administrative overhead. There is evidence and concern in the semiconductor industry that the full repeal of the GHGRP would result in the proliferation of regulations as states replace the GHGRP with their own reporting systems, which may or may not be cohesive and transferable from state to state.
- Internal Emissions Management: The detailed methodologies mandated by the GHGRP help businesses track and compare emissions year over year, identify energy inefficiencies, minimize waste, and find opportunities to save money through operational improvements.
- Alignment with Other Key Federal Programs: Facilities reporting under the GHGRP may also be subject to reporting under other administrative programs such as tax credits or Underground Injection Control programs. The GHGRP is intentionally designed to be coordinated with and conducive to the needs of these programs to avoid duplicative efforts and reduce administrative burdens.
Key Sectoral Importance
Oil and Gas Sector
The oil and gas sector is a primary focus of the GHGRP, mainly through Subpart RR, VV, and W (Geologic Sequestration, Enhanced Oil Recovery, Petroleum and Natural Gas Systems) emissions.
- Differentiated Oil and Gas Exports: The oil and gas industry is the largest industrial source of methane emissions. While the rule acknowledges that Subpart W reporting will be reinitiated in 2034 (except for the distribution segment), the GHGRP provides immense value for the oil and gas sector today beyond the future implementation of the Waste Emissions Charge. GHGRP data is vital for
- Investment and Markets: The GHGRP identifies lower-emissions-intensity oil and gas products so their producers can access premium international markets that increasingly require verifiable low-carbon sourcing. The GHGRP’s granular data allows companies to benchmark their performance and demonstrate superiority over competing exporters. Without the GHGRP, American oil and gas producers will not have a rigorous and consistent benchmark against which to demonstrate their competitive advantage. Leading liquified natural gas (LNG) markets such as Japan and the European Union are implementing policies to regulate the carbon intensity of imported LNG.
- Cost Savings and Increased Capacity: When they know where methane leaks are occurring, companies are better able to mitigate those leaks and ensure that methane reaches its end use in power or commodities. This increases the production and efficiency of American natural gas.
Artificial Intelligence Sector
The AI sector and its rapidly expanding need for data centers are increasingly relevant to the GHGRP.
- Energy and Emissions Footprint: The vast computational resources required for training and running AI models demand massive amounts of electricity, leading to large GHG emissions from their captive power generation. Policymakers and corporate leaders mutually benefit from understanding the emissions impact of these facilities, especially as a tool to identify regions with low-carbon power, which private industry is now demanding.
- GHGRP Link: Large data centers (with colocated power) and related manufacturing facilities often exceed the reporting threshold of 25,000 tCO2e under GHGRP, especially for their combustion sources (Subpart C) and industrial gas usage.
- Public Acceptance: As AI’s energy demand comes under scrutiny, GHGRP data provides a credible, government-verified emissions disclosure mechanism that helps the sector manage its public perception and meet growing stakeholder pressure for sustainable operations. The GHGRP gives data-center developers, users, and power suppliers quality-assured assessments of a given operation’s full emissions impact on a power system.
The Role of the GHGRP for Emerging Technologies and Federal Investment
The GHGRP is indispensable for the operation and integrity of two major federal incentives for emerging energy technologies: Section 45Q and Section 45V tax credits. A full repeal would force the IRS to revoke and update current verification and compliance guidance for crucial innovation tax credits included in the One Big Beautiful Bill Act. This would strain internal resources at the IRS and delay or prevent private capital from being deployed.
Section 45Q: Carbon Capture, Utilization, and Sequestration
The 45Q tax credit, which provides a credit per ton of securely stored or utilized carbon, depends on the GHGRP for its MRV requirements.
- Projects claiming the credit for permanent geologic storage (e.g., Class VI wells) or enhanced oil recovery (e.g., Class II wells) must adhere to GHGRP Subpart RR or VV, respectively. Subparts RR and VV mandate a detailed, EPA-approved plan for monitoring and reporting.
- The amount eligible for the 45Q credit is quantified and publicly reported through the GHGRP. This linkage ensures that the IRS has a validated, standardized, and transparent mechanism to verify the performance-based nature of the credit before taxpayer money is claimed, thereby safeguarding against fraud.
Section 45V: Clean Hydrogen Production
The 45V tax credit, providing up to $3 per kilogram of hydrogen based on its lifecycle emissions, also relies on GHGRP’s foundational data.
- Lifecycle Emissions Analysis: While 45V uses the Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model for calculating lifecycle emissions intensity, the input data for the emissions associated with hydrogen production (e.g., from natural gas reformers using carbon capture or from manufacturing inputs) often draws from the verifiable facility-level data collected by the GHGRP (e.g., Subparts C and W data).
- Blue Hydrogen Projects: For blue hydrogen projects (produced from natural gas), the required capture and secure storage must be reported under the same GHGRP Subpart RR standards that govern the 45Q credit, making GHGRP compliance a prerequisite for maximizing the 45V credit value.
Conclusion
The GHGRP is a crucial piece of economic infrastructure. It provides the verifiable data that underpins corporate accountability and is the cost-effective, standardized mechanism required to validate multi-billion-dollar investments in the U.S. energy economy through the 45Q and 45V tax credits. Weakening the program would undermine the integrity of these incentives and diminish U.S. competitiveness in the global energy technology landscape.
EPA should reconsider its proposed rule dismantling the GHGRP and instead pursue a voluntary, opt-in approach to the program.
