Understanding the Value of the Greenhouse Gas Reporting Program, and the Impacts of EPA’s Proposal to Roll Back the GHGRP
The Environmental Protection Agency’s (EPA) recently proposed rollback of the Greenhouse Gas Reporting Program (GHGRP) would remove most source categories and suspend obligations for subpart W until reporting year 2034. This would have vast impacts not only on the ability to track and report emissions to verify compliance with the Clean Air Act, but also on industry’s ability to access energy tax credits, compete in global markets, and comply with states’ reporting requirements.
Overview of EPA’s Greenhouse Gas Reporting Program
EPA’s GHGRP, established in 2009 in response to congressional mandate,1 requires approximately 8,000 facilities across 47 source categories to report their greenhouse gas (GHG) emissions annually to fulfill the need for providing public and private decisionmakers with transparent, accurate, and comprehensive GHG emissions data. For over fifteen years, data collected through the GHGRP has been used by EPA, policymakers, industry, and the public to guide national and state policy and regulation, inform investment decisions, and drive innovation that cleans our air.
On September 12, 2025, EPA proposed to permanently remove GHGRP reporting requirements for 46 of the 47 source categories, permanently remove the natural gas distribution segment of the petroleum and natural gas source category (subpart W), and suspend reporting of the remaining nine subpart W segments until reporting year 2034. EPA’s proposal would have myriad consequences for the general public, investors and companies that rely on 45Q and 45V tax credits, U.S. access to global markets, and state governments that rely on GHGRP data.
I. Tax credits: 45Q, 45V
Industry relies on the GHGRP to claim the 45Q tax credit for carbon capture projects
Today, there are more than 270 publicly announced carbon capture projects across the United States, representing a total of $77.5 billion in capital investment.2 These projects rely on the ability to claim the 45Q tax credit, which in-turn relies on EPA’s GHGRP.
Specifically, IRS regulations rely on EPA’s GHGRP for the monitoring, reporting, and verification (“MRV”) needed to quantify the volume of captured CO2 and to substantiate credit claims. The GHGRP provides the backbone for this MRV across sectors like refining, chemicals, power, and cement.
Carbon management has benefited from bipartisan support since the introduction of the section 45Q tax credit during the Bush administration in 2008. Eroding trust in MRV for carbon dioxide threatens to end the solid basis of support in Congress and creates a deeply uncertain investment environment.
Without subparts PP, RR, and VV, carbon capture and storage (CCS) projects cannot claim 45Q and will not proceed.
- Subpart RR provides the basis for reporting validated emissions reductions from carbon capture; facilities must develop EPA-approved Monitoring, Reporting, and Verification plans with specified methodologies for calculating the annual mass of CO2 received, injected, produced, and ultimately sequestered using mass balance approaches. Geologic storage projects cannot proceed without subpart RR.
- Subpart PP provides critical information about carbon flows in the economy and is used to validate downstream amounts. It also serves as the basis for certain measurement protocols within subpart RR.
- Subpart VV provides the reporting mechanism for storing carbon in conjunction with enhanced oil recovery (EOR) that developers must use if they utilize International Standards Organization (ISO) standard CSA/ANSI ISO 27916:19, instead of subpart RR, to provide a validated basis for volumes managed and stored. EOR projects cannot proceed without subpart VV, in the absence of subpart RR.
Repealing or replacing these long-standing, widely used reporting mechanisms would cause unnecessary disruption, delay investment, and work against 45Q’s purpose to safely deploy CCS.
Update: On December 19, 2025, the Treasury Department (“Treasury”) and the Internal Revenue Service (“IRS”) released Notice 2026-1 in light of EPA’s proposed GHGRP rollback. The notice provides guidance and a safe harbor for determining the section 45Q tax credit eligibility and credit amount for carbon dioxide capture and geological storage that occurred during calendar year 2025.
The release of the safe harbor will support taxpayers by allowing them to claim the 45Q tax credit for 2025 despite EPA’s proposed rollback. Although this represents a step forward for taxpayers who claim the credit, it does not address the longer-term uncertainty for the industry driven by the rollback, which would upset an effective and longstanding program without an adequate replacement in place. Substantively, there is also uncertainty as to whether the qualified independent engineer or geologist certification contemplated by the safe harbor will provide an equivalent, consistent minimum baseline level of assurance as the GHGRP currently does.
The notice also indicates that Treasury intends to issue forthcoming revisions to existing 45Q regulations. As they must: section 45Q requires Treasury to ensure adequate security of storage through regulations developed in consultation with EPA, the Department of Energy, and the Department of Interior. Such acknowledgement is better than nothing, but the industry must wait for an unknown time period for Treasury to do that consultation and issue these regulations, which may or may not impose additional administrative burdens relative to the firmly-established GHGRP methodology.
EPA’s proposal hinders carbon-based hydrogen projects and 45V tax credit implementation
Rolling back the GHGRP has implications for carbon-based hydrogen projects and 45V tax credit implementation. Specifically, the proposed GHGRP repeal would reduce the reliability of measurements of the upstream methane leak rate, which is an input into 45VH2-GREET (the tool used to measure lifecycle GHG emissions for claiming the 45V tax credit). The proposed delay of subpart W until reporting year 2034 would reduce the ability of taxpayers to receive compensation for better performance (i.e. lower-emissions hydrogen production), open a new source of legal risk, and render some projects uneconomical.
Subpart W consists of emission sources in ten segments of the petroleum and natural gas industry, including on and offshore petroleum and natural gas production, onshore natural gas processing, onshore natural gas transmission compression, onshore petroleum and natural gas gathering and boosting, onshore natural gas transmission pipelines, underground natural gas storage, liquefied natural gas (LNG) storage, LNG import and export equipment, and natural gas distribution. Owners or operators of these facilities that emit 25,000 metric tons or more of GHGs per year report GHG data to EPA.
Treasury’s evolving approach to upstream methane under 45V
Treasury and IRS incorporated GHGRP’s subpart W regulation into the preamble of the final 45V regulations to help calculate the upstream methane leak rate after 2026; prior to that date, GREET would use the national average (0.9%).3 The delay was necessary because revised reporting rules for GHGRP subpart W data were scheduled to be fully effective in 2026.4 DOE would have used the updated data within GREET to allow differentiated methane emissions rate reporting that more accurately captured the individualized performance of credit claimants, awarding for performance.
In May 2025, Treasury pursued a different course of action from the one it articulated in January 2025. Instead of waiting until 2026, GREET was prematurely updated to allow foreground data to be used to determine the upstream methane leak rate. This was before the 2026 subpart W GHGRP data update that the January 2025 guidance deemed necessary. The approach pursued in May 2025 allows credit claimants the option5 to use either foreground (user-input) or background (unchangeable, set at the 0.9% national average) data.
The proposed delay of the GHGRP subpart W creates three related problems for taxpayers seeking to claim credits under 45V.
- First, the proposed delay reduces the ability of taxpayers to provide differentiated methane emissions rates, as that data will not be available. Taxpayers will instead have to rely on the national average of 0.9% to claim the credit—which is both an underestimate of the actual average emissions and undifferentiated, thus misstating air pollution, over-rewarding high-emitters, and under-rewarding more efficient operations.
- Second, and relatedly, the proposed repeal creates a new source of potential legal risk if a taxpayer wants credit for being a high performer. The January 2025 guidance provided two methodologies for taxpayers to calculate their upstream methane emissions: a national average or data collected from GHGRP subpart W (starting in 2026). In the absence of subpart W, taxpayers with lower leak rates than the national average are left without an approved option for bespoke methane reporting under the January 2025 Treasury guidance. They could pursue private verification of their data, but that may expose them to legal risk.
- Finally, carbon-based H2 projects that were choosing between 45V and 45Q may be in more economic jeopardy than before. If a project were on the fence between the two credits, developers and/or investors were likely assessing which credit provided more economic value. Data from GHGRP subpart W would have allowed some taxpayers to legitimately reach a higher tier of 45V, tipping the scales towards 45V over 45Q. If that option is unavailable because of the subpart W delay, projects might be more inclined to revert to 45Q. However, 45Q is not claimable without the GHGRP, so these projects may no longer be viable.
II. Access to global markets
Rolling back the GHGRP would put US companies at a disadvantage when competing in rapidly evolving global markets where robust, credible GHG accounting is critical for many exporting sectors, like the oil and gas, biofuels, and industrial manufacturing industries. For example, emerging global regulatory frameworks like the EU Carbon Border Adjustment Mechanism (CBAM) require verified emissions data, and GHGRP is a universally recognized framework. To access these markets, U.S. industries need a manageable reporting framework that the GHGRP provides.
In the proposal, EPA cites targeted information collection requests and state data as alternatives to the GHGRP, but these options do not provide the same level of detail or consistency as GHGRP data. Without the GHGRP, billions in private investment and hundreds of projects would face severe risk, greater litigation exposure, and prolonged uncertainty that would stall low-carbon exports, including those reliant on CO2 capture and storage deployment.
III. State reporting requirements
GHGRP code sections are widely referenced throughout state greenhouse gas reporting rules, including appendices describing various acceptable measurement technologies and test methods. At least ten states—California, Colorado, Hawaii, Maine, Maryland, Massachusetts, New Mexico, New York, Oregon, and Washington—have embedded the federal GHGRP into their own legal frameworks. Repealing Part 98 would destabilize the regulatory foundation these state emission reporting systems rely upon and deprive these states and localities of the most consistent and authoritative source of facility-level emissions data available.
For example, Colorado is statutorily required to use GHGRP data to inform statewide emissions inventories and use state reporting requirements to supplement any “gaps” in federal data. The loss of GHGRP will require the state to increase reporting requirements to backfill lost information. Colorado also uses GHGRP-determined thresholds and test methods to define which facilities may be subject to certain state regulations. Stripping away these coordinating and standardizing federal provisions requires states to expend significant resources creating a patchwork substitute system to evaluate their own emissions goals. The proliferation of state requirements to fill in gaps left by GHGRP will dramatically complicate compliance and reporting requirements for entities with emitting facilities in multiple jurisdictions.
Conclusion
EPA’s proposed rollback of the GHGRP would have impacts on emissions reporting and beyond. The rule, if finalized as-is, would threaten billions in private investment, hinder access to tax credits, disadvantage U.S. companies competing in global markets, and destabilize state regulatory frameworks. Robust, transparent, and standardized GHG emissions accounting is integral for implementing bipartisan carbon management and industrial innovation policy. Without it, investors and developers will face regulatory uncertainty that stall projects and risk billions in investment. Maintaining the GHGRP is essential for protecting public health and the environment and for economic development. For more details, see the coalition comments we submitted to EPA here.
1 Consolidated Appropriations Act, 2008, Public Law 110-161, 121 Stat 1844, 2128 (2008).
3 Note this national “average” is not a true representation and, in CATF’s analysis, undercounts upstream methane emissions.
4 Jan 2025 final guidance (preamble)
5 The option to use either bespoke data or the national average can lead to cherry-picking of data, which would exacerbate the over-rewarding of under-performers. See Joint CATF-EDF principles on methane reporting for 45V for more detail.
