Balancing Confidentiality and Transparent Reporting of Greenhouse Gas Emissions

The U.S. Environmental Protection Agency’s (EPA) mandatory greenhouse gas (GHG) reporting program requires more than 10,000 facilities to file annual reports, each containing over 1,500 data elements.  In December, 2010, EPA deferred the reporting deadline for certain elements of information used to calculate GHG emissions from March 31, 2011, until March 31, 2014.

Although some reporting will begin this March, EPA made its decision to defer the reporting of other information, such as data on inputs to emissions equations, after industry and the Federal Trade Commission (FTC) expressed concern EPA’s initial decision to publish these data would risk exposing confidential business information.  According to the FTC, exposing business secrets could facilitate anti-competitive behavior and lead to increased consumer prices.

On January 19, 2011, EPA extended its comment period to March 7, 2011, to consider these concerns.

The European Union has also been trying to balance confidentiality concerns in its GHG reporting rules.  At least initially, the EU’s Emissions Trading System (EU ETS) has generally prioritized transparency, as emissions reports available on European companies may contain business secrets.

A January, 2003, directive of the European Parliament and Council provides the public with a right to access emissions reports from Member States, even if those reports contain confidential business information. Ludwig Krämer, the then-head of EU Environmental Governance, has quipped that if a producer wants “to keep the composition of his emissions confidential, then he should capture them within his installation and prevent them from going public.”

More recent EU Commission Guidelines, however, allow businesses to request protection against release of commercially sensitive information in ETS emission reports. This may reflect a changing approach within branches of the EU legislature.

Soon, EPA is likely to face its own decision about how to balance between the transparency exemplified in the EU approach and the concerns about confidentiality expressed by the FTC in its comments.