From the Director (EHS Advantage, April 2009)

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From the Director (EHS Advantage, April 2009)

Pardon the pun, but climate change legislation in the U.S. is “heating up”. Two significant pieces of legislation impacting the semiconductor, flat panel display and photovoltaic manufacturing industries were released in March and are currently in a public review and comment period.

Mandatory Greenhouse Gas Reporting Rule

On March 10, 2009, a proposed Mandatory Greenhouse Gas (GHG) Reporting Rule was signed by the EPA Administrator, Lisa P. Jackson. The proposed rule will apply to facilities that directly emit GHGs and to suppliers of fossil fuels and industrial GHGs. In general, the rule will require that suppliers of industrial greenhouse gases and facilities that emit 25,000 metric tons or more per year of GHG emissions submit annual reports to the EPA. The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).

In the proposal, there appears to be seven source categories that are applicable to SEMI members. These are:

    1. Ammonia Manufacturing (40 CFR part 98, subpart G)

    2. Electronics Manufacturing (40 CFR part 98, subpart I)

    3. Fluorinated Greenhouse Gas Production (40 CFR part 98, subpart L)

    4. Hydrogen Production (40 CFR part 98, subpart P)

    5. Nitric Acid Production (40 CFR part 98, subpart V)

    6. Phosphoric Acid Production (40 CFR part 98, subpart Z)

    7. Suppliers of Industrial Greenhouse Gases (40 CFR part 98, subpart OO)

As an interesting note, the proposal requires that semiconductor facilities with an annual capacity greater than 10,500 m2 of silicon use the process-specific utilization and byproduct formation factors developed in accordance with the International SEMATECH Manufacturing Initiative’s (ISMI) “Guideline for Environmental Characterization of Semiconductor Process Equipment”, which is currently being revised. All other facilities would use the default factors provided in the rule.

For a more thorough summary of reporting requirements, please click here.

Greenhouse Gas Cap-And-Trade Program

On March 31, 2009 the U.S. House of Representatives Committee on Energy and Commerce released a 648-page draft energy and climate bill (The American Clean Energy and Security Act of 2009) that includes a cap-and-trade program (Titles III and VII). Sources of greenhouse gas emissions greater than 25,000 tons per year will be capped. The bill will eventually cover 85% of U.S. emissions, starting with coal-fired electricity generation, liquid-fuel production and geologic-carbon sequestration in 2012, expanding to industrial sources in 2014, and including gas distribution companies in 2016. The bill is intended to reduce GHG emissions 3% below 2005 levels by 2012, 20% below 2005 levels by 2020, 42% below 2005 levels by 2030, and 83% below 2005 levels by 2050.

Some of the key provisions in the bill are:

  • Designated Greenhouse Gases: The following are considered greenhouse gases: carbon dioxide; methane; nitrous oxide; sulfur hexafluoride; hydrofluorocarbons emitted as a byproduct; perfluorocarbons, nitrogen trifluoride; any other anthropogenic gas designated as a greenhouse gas by the (U.S. EPA) Administrator.
  • Offsets: Allows covered entities to increase their emissions above their allowances if they can obtain offsetting reductions at lower cost from other sources. The total quantity of offsets allowed in any year cannot exceed 2 billion tons, split evenly between domestic and international offsets. Covered entities using offsets must submit five tons of offset credits for every four tons of emissions being offset.
  • Banking and Borrowing: Allows unlimited banking of allowances for use during future compliance years. The bill establishes a rolling two-year compliance period, which effectively allows covered entities to borrow from one year ahead without penalty. Allowances from two to five years in the future can be borrowed under limited circumstances.
  • Strategic Reserve & Safety Valve: Directs the EPA to create a strategic reserve of about 2.5 billion allowances by setting aside a small number of allowances authorized to be issued each year. This will create a cushion in case prices rise faster than expected. The draft bill directs the EPA to make allowances from the reserve available through an auction when allowance prices rise to unexpectedly high levels (safety valve). The proceeds of the auction will be used to purchase additional offsets that will replenish the strategic reserve.

From the perspective of the semiconductor, flat panel display and photovoltaic manufacturing industries and supply chain, the biggest issue with the cap-and-trade program in the draft bill is that it seeks to control emissions of global warming gases by establishing an upstream (production source) emission allowance program for fluorinated gases (HFCs, PFCs, SF6, NF3, etc) used by covered facilities. This may result in severely limiting availability and increased cost of these gases.

How You Can Help / More Information

SEMI is organizing a SEMI member Interest Group on the topic of Greenhouse Gas Emission and Climate Change. If you are interested in participating, please contact Sanjay Baliga (SEMI Senior Manager).

Aaron Zude

Senior Director

SEMI EHS Division

April 7, 2009