Biofuel, Ag Groups Comment on SEC Climate Disclosures Rulemaking

by Erin Voegele (Biomass Magazine) ... Growth Energy’s comments focused on the calculation of biofuel GHG emissions. “The proposed rule would require many public companies to calculate and disclose GHG emissions from throughout their entire supply chain and production cycle,” Growth Energy said in its comments. “How obligated parties calculate the GHG emissions associated with biofuels in their supply chains – and the modeling and data those parties rely on – could significantly impact the biofuels industry and the critical role that biofuels can play in addressing climate change. It is therefore important that these disclosures are accurate and based on the most updated lifecycle emissions science.

“We expect that many obligated parties will be looking for guidance in characterizing biofuels’ GHG emissions for the purposes of their GHG disclosure obligations,” Growth Energy continued. “The SEC should ensure that obligated parties use the best available science in calculating these emissions. In particular, the best available and most recent science–including studies published by the Department of Energy’s Argonne National Lab and the U.S. Department of Agriculture— demonstrate that the lifecycle GHG emissions of corn ethanol are substantially lower than a petroleum baseline, in the range of 39-46 percent lower. These results are bolstered by other studies, including the expert analyses of Environmental Health & Engineering, Inc. (EH&E) and Life Cycle Associates.”

The RNG Coalition submitted extensive comments to the SEC discussing the impact of the proposed rule on the RNG sector. “RNG Coalition generally supports efforts to promote and standardize reporting of climate related information so long as those efforts also provide companies with the tools they need to accurately account for GHG emissions and offsets,” the group wrote. “Because of the differences across economic sectors, we believe those tools are best developed through a collaboration of government, registrants, investors, and other stakeholders.

“Even if the SEC does not prescribe methodologies, we believe that increased transparency will lead to a convergence of methods based on what investors and the market find useful.

“However, while we appreciate the phase-in approach, safe harbor for certain emissions disclosures, and exemption from certain reporting requirements for smaller reporting companies, we encourage the SEC to further consider how to best transition to such complex new requirements before imposing significant potential liability on companies acting in good faith with respect to these types of disclosures,” the RNG Coalition continued.

A full copy of the proposed rule is available on the Federal Register website. Full copies of public comments the agency received can be downloaded from the SEC website. READ MORE

Excerpt from Politico Pro: Financial regulators in New York state said more than two years ago that they want banks and mortgage companies to assess and manage the threats they face from climate change. Now, regulators in the Empire State are in the early stages of carving those expectations into stone.

The New York Department of Financial Services released draft guidance late last month that would provide lenders with sweeping guidelines about how they should prepare for intensifying extreme weather events and the clean energy transition.

At a high level, the proposal — which builds on a 2020 letter sent to New York institutions — says the agency expects all state regulated banks and mortgage lenders to infuse climate considerations into their risk management processes and corporate governance structure. Also critical, the proposal says, is that banks provide equal services to all communities, including those most vulnerable to rising temperatures.

Notably, the New York agency said it aims to align its proposal with climate guidance released by federal banking regulators over the last year. READ MORE

Excerpt from E&E News: West Virginia Attorney General Patrick Morrisey said as much yesterday after the Supreme Court curbed EPA’s ability to regulate planet-warming emissions. He argued that the Biden administration and agencies including the SEC have intentionally sidestepped Congress to fight climate change and that his and other Republican states’ challenge against EPA is just their first effort to fight back.

“We’ll also be looking at a lot of the other rules the Biden administration and independent agencies are putting forth. Particularly, the SEC’s” rule, Morrisey, who spearheaded the challenge, said yesterday during a press conference.

“West Virginia has already led a 24-state comment letter against [the SEC rule]. And I think that would also fall into the major questions category where the Biden administration is trying to transform all these agencies, what their traditional mission is, and turn them into environmental regulators,” he added.

As to whether the EPA ruling has any implications for the SEC’s rule, Todd Phillips, who directs financial regulation at the Center for American Progress, a progressive group, argued the two situations are “fundamentally different.”

“My take is the West Virginia v. EPA case was about a very specific statutory authority for the EPA, and what the SEC is doing or proposing to do is just nothing like that,” said Phillips, who is also a banking and administrative law attorney.

“The SEC has proposed a rule to require companies to disclose information to investors and potential investors,” he added. “That is what the SEC has been doing since it was first created.” READ MORE