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February 17, 2023

ACEC Submits Comments on Federal Contractor Greenhouse Gas Disclosure Rules

The proposed amendment to the FAR, called the Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk, would require federal contractors to disclose their greenhouse gas emis­sions. It would also require larger firms to set science-based emis­sions reduction targets.

The rule creates two classifications for federal contrac­tors: “Significant” contractors receive between $7.5 and $49.9 million in federal contracts, while the threshold for “Major” contractors is $50 million in federal contracts annu­ally. Significant contractors are required to report Scope 1 and 2 emissions, which include direct emissions produced by a firm and indirect emissions from generating sources of electricity that are purchased for a firm’s consumption from another entity. These requirements also apply to major contractors, as well as a requirement to report Scope 3 emissions, defined as greenhouse gas emissions from the operations of the firm that occur at sources other than those owned or controlled by the firm—usually a subcontractor and other members of a supply chain.

ACEC submitted comments on the rule, reflecting con­cerns from firms over the cost impact and other implementa­tion issues. As the rule is written, many terms are vague and could be broadly interpreted. This variety of interpretation possibilities has significant cost implications and may create both advantages and disadvantages based on a particular interpretation. Many smaller firms also lack the expertise to determine greenhouse gas emissions, establish appropriate reduction targets, and measure and monitor whether those targets are being achieved. This would result in many small businesses having to hire consultants or outside staff to meet the proposed requirements.

Read our comments.

All comments to blog posts will be moderated by ACEC staff.

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February 17, 2023



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