FAQs

Offsets

• What is an emission offset?
  

An emission offset is an emission reduction achieved by an entity other than the reporting entity. Only the entity claiming the offset can report the reduction. These reductions must appear as separate and distinct components of an entity's report, not integrated into the reporting entity's emissions or net emission reductions. Please note that an entity must have an agreement with the other entity that permits the reporting of the offsets.

Instructions for Form EIA-1605, pp. 7

• What is an aggregator?
  

An aggregator is an entity, such as a trade association, that submits a report on behalf of multiple non-reporting entities, as if they had themselves reported. They must follow applicable procedures for reporting offset reductions, including obtaining a written agreement with each non-reporter. (See "What are the requirements for reporting and offset?" below.)

General Guidelines, §300.2

• What are the requirements for reporting an offset?

To report an offset, a reporting entity or aggregator must:

• Have an existing agreement with the other entity that specifies the quantity of the emission reductions (or increases) achieved;
• If reporting offsets for a non-reporter, include in its report all information for the offset provider, including an entity statement, an emissions inventory (when required) and an assesment of emission reductions that would be required if the offset provider were directly reporting to EIA. (The net emission reductions (or increases) of each offset provider will be evaluated separately by EIA to determine whether they are eligible for registration in accordance with the guidelines of this part.)
• If intending to register the reductions reported as offsets, an aggregator must fulfill all necessary requirements, as follows:

• If the aggregator is a large emitter, it must meet all of the requirements applicable to large emitters, including an entity statement, an emissions inventory, and an entity-wide assesment of emission reductions.
• If the aggregator is a small emitter, it may report only the activities, emissions and emission reductions of the offset provider and are not necessarily required to report on any of its own activities or emission reductions. Such small emitters would have to submit an entity-statement and an estimate of their total emissions indicating that they qualify as a small emitter.

 

• If reporting offsets that have been distributed by another 1605(b) reporter, the entity receiving the offsets should report the net emission reductions distributed to them by the other entity. Entities distributing offset reductions must identify the quantity of any net emission reductions distributed and the name of the receiving entity.

• What does it mean to distribute an offset?

Entities may also participatein the distribution of offsets between 1605(b) reporters. To distribute offsets to another reporter, entities must report the name of the other reporter, entities must report the name of the other entity and must identify the quantity of net reductions that another entity will report as an offset reduction. The entity distributing the offsets would report this information in Part C or D of their respective reduction Addenda (B1-B16)

The receiving entity of distributed offset reductions would report these offsets on Schedule I, Section 3 of their emissions report. The receiving entity does not need to attach an emissions report (as they would for non-reporters) for the other reporting entity.

• If I have purchased Renewable Energy Credits (RECs) or am involved in another green-power purchasing contract, can I report the reductions associated with these contracts to the 1605(b) Program?

RECs or green-power purchasing contracts may be reported to the 1605(b) Program for the purposes of recording emission reductions, but they may be reported only if they meet certain requirements, outlined below. There are three possible scenarios in which they may be reported for emission reductions:

• Indirect Emission Reductions via Plant-specific Contracts: If the RECs purchaser has direct, plant-specific contract with a green power producer, the RECs purchaser may be able to show reductions in indirect emissions relative to its Base Period. Detailed, plant-specific information would need to be provided in Form EIA-1605 for these sources.
• Emission Offsets: Entities may report green-power purchases as emission reductions under the offset provisions of the General Guidelines. Under this scenario, the purchaser of RECs could report reductions to the Program under one of the following two cases:

• If the generator is a 1605(b) reporter, the RECs purchaser would obtain the reductions through a distribution recorded in the generator's 1605(b) report (in Part C or either Addendum B4 or B5). If an intermediary (a green-power "broker") arranged the power sales, the generator would have to obtain information in its report to EIA.
• If the generator is not a 1605(b) reporter, the RECs purchaser could report the reductions as offsets. The RECs purchaser would have to include in its 1605(b) report detailed information (at a minimum, Schedule I, Schedule III, and Addendum B4 or B5) for each generator from which power is purchased.

• Boundaries of the entity: In certain cases, a reporter may be able to define its entity in such a way that it encompasses the generation plant or plants that are the source of the RECs. They would have to meet the provisions in § 300.4(a)(3) of the General Guidelines; in other words, they would need to establish theat they have long-term control over the source and that the owner of the source has agreed to the reporting of these emissions/reductions. Since there are no emissions to speak of from a wind facility or other zero-emitting source, long-term control over emissions is not an issue. Having an agreement with the generator to report reductions may be sufficient to establish "long-term control" and fulfill the regquirements of these provisions. The reporter would then be able to report the reductions or distribute the reductions to another 1605(b) reporter.

Technical Guidelines, Section 1.F.2.2