Overview
The Colorado Air Quality Control Commission adopted the Greenhouse Gas Emissions and Energy Management for Manufacturers in Colorado (GEMM 1) rule on October 22, 2021. The rule became effective starting December 15, 2021, what is now Regulation 27, Part C. This rule will help Colorado achieve economy-wide goals to:
- Reduce 2025 greenhouse gas emissions by at least 26% compared to Colorado's total 2005 greenhouse gas emissions.
- Reduce 2030 greenhouse gas emissions by at least 50% compared to Colorado's total 2005 greenhouse gas emissions.
- Reduce 2050 greenhouse emissions by 100% compared to Colorado's total 2005 greenhouse gas emissions.
The GEMM 1 rule applies to energy-intensive, trade-exposed industrial facilities that produce 25,000 tons or more of greenhouse gases annually. The GEMM 1 rule requires facilities to:
- Demonstrate they are using Greenhouse Gas Best Available Emissions Control Technologies and Energy Best Management Practices through an audit process.
- Achieve an additional 5% reduction in their greenhouse gas emissions.
Requirements for covered facilities
The GEMM 1 rule requires facilities to conduct an energy and greenhouse gas emissions audit that will assess ways to reduce greenhouse gas emissions and save energy. The Air Pollution Control Division must approve plans for the audit, including who will do the audit and what it will cover.
GEMM 1 facilities were required to submit a Greenhouse Gas Best Available Emissions Control Technology and Energy Best Management Practices Audit Plan by December 31, 2022 to the division for review. Each plan was developed by a third-party auditor who met division guidance for auditor selection. Audits must be done by a professional who does not work at the facility.
The audit plans must describe:
- The greenhouse gas emitting equipment is to be audited.
- The audit team members.
Audits are required to:
- Use the federal Interagency Working Group’s “social cost” of greenhouse gases available at the time of the audit to consider economic impacts.
- The social cost of greenhouse gases is an estimate, in dollars, of the economic impacts that come from releasing one ton of greenhouse gases in a given year.
- Include ways for facilities to reduce air pollution in nearby communities.
- Cover which control measures are possible, how much they will cost, and what the energy, environmental, and economic impacts would be.
Following the 2022 audits, the facilities submitted an audit report to the division for review. The division reviewed the plans and issued determinations in 2023. These determinations indicate each source's compliance status. The commission approved those determinations in summer 2023.
Reducing Greenhouse Gas Emissions
- Based on the GEMM 1 rule, if a facility’s audit were to show it was not using the best controls to save energy and reduce greenhouse gas emissions, the facility must:
- Reduce the same amount of emissions that those best controls would achieve, and reduce an additional 5% in total greenhouse gas emissions.
- If the audit showed a facility was already using the best controls, the facility is still required to reduce greenhouse gas emissions by an additional 5%.
- The division provided each facility with a greenhouse gas emissions limit. The facility must stay below that limit each year through one or more of the following actions:
- Reducing greenhouse gas emissions directly at the facility.
- Installing an onsite renewable energy project that reduces the greenhouse gas emissions from the facility’s energy use.
- Providing proof of greenhouse gas credits awarded by the division.
Facilities must send a compliance action plan to the division within 120 days of the commission’s approval, stating:
- The timeline and actions that will be used to meet the annual emissions limit.
- How the facility will improve air quality for nearby communities, as recommended in the audit.
- Starting in 2025, each facility must show the division how it will meet the 5% reduction requirement for that year.
Protecting local communities
The GEMM 1 rule prioritizes control measures that will reduce other air pollution — beyond greenhouse gases — and improve air quality in communities near the covered facilities. If a facility’s audit includes control measures with air quality co-benefits, the facility must achieve those co-benefits no matter how it plans to comply with the rule.
Greenhouse Gas Emissions and Energy Management for Manufacturing 2 (GEMM 2) Rule
A related rule to address 18 more industrial sources of greenhouse gas emissions in Colorado was adopted by the commission in 2023. Learn more about the GEMM 2 rule.