Around the world in air emissions requirements

As climate change momentum grows, so will your company’s list of air emission requirements. Learn how regulations are expanding across the globe with this update on key developments.

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Quick Summary

  • Air emission regulations are tightening fast across the globe, and companies need to keep pace with requirements in the EU, US, and Asia-Pacific.
  • The EU is proposing to extend its Emissions Trading System, the EPA is pushing to cut carbon emissions, and APAC is accelerating its own practical measures.
  • The IPCC warns that global warming will exceed 1.5°C this century unless greenhouse gas emissions are cut collectively — making compliance not just a legal issue but an urgent business priority.

What’s in it for you?

  • Learn the EU’s proposal to extend its ETS 
  • Read how the EPA plans to reduce carbon emissions 
  • Discover APAC’s increased pace and practical measures 

By Evelyn Chuang, Beatriz García Fernández-Viagas, and Nathaniel Gajasa, EHS regulatory consultants

In August 2021, the Intergovernmental Panel on Climate Change reported that global warming will increase by more than 1.5°C this century unless we collectively cut greenhouse gases (GHG). Worldwide, leaders are answering that call with additional protective measures. The EU, US, and Asia-Pacific are responding loudest — through more stringent legislation. Here are the key developments in air emissions regulations you need to know.

EU: Ambitious efforts to curb climate change

The European Union is at the forefront of international efforts to tackle climate change. It is the only region in the world with a climate neutrality target enshrined into law. To reach climate neutrality by 2050, the EU has committed to reducing GHG emissions by at least 55% by 2030, compared to 1990 levels. The “Fit for 55” package is the European Commission’s set of proposals to achieve that goal — and the list of legislation under review signals big changes ahead.

Of particular note is the broadened scope for emissions control. The Commission proposes to extend the European Emissions Trading System (ETS) to cover additional sectors, including buildings, maritime, and road transport. Companies in these newly added sectors would need to report their emissions and surrender allowances to cover them. The Commission also proposes to reduce the ETS’s total number of emission allowances by 4.2% each year, with free allocation made conditional on companies’ decarbonization efforts.

Beyond ETS changes, the Commission wants to address carbon leakage through the carbon border adjustment mechanism (CBAM). The CBAM is a proposed carbon price on specific products imported to the EU. It would require EU importers to buy carbon certificates corresponding to the carbon price they would have paid if the goods had been produced under EU ETS rules.

US: Setting sights on the cost of carbon emissions

Emissions are rising to the top of the US priority list. The EPA’s new strategic plan for 2022–2026 sets climate change as the number one priority, with a particular focus on the cost of carbon in air emissions. Even companies that do not produce significant volumes of GHG need to be aware of the potential impact.

The Clean Air Act requires the EPA to consider costs and benefits in several regulatory programs — in permitting and in general rulemaking. The most recent considerations include all sources of CO₂, methane, and other GHG. If the EPA estimates greater benefits from reducing these emissions, the cost burden on companies that exceed limits could increase. As the estimated social cost rises, the EPA would be permitted to impose higher costs on businesses through new or updated rules.

APAC: Picking up the pace on net-zero

Asia-Pacific is equally active in cutting emissions. In 2021, the region saw 591 regulatory developments related to air emissions management — ranking it third most active in Enhesa’s global database. And it is set to accelerate further. Net-zero goals have urged India and Southeast Asia to speed up legislation and introduce more practical measures to achieve carbon neutrality. China, India, and South Korea have all published more stringent air emission standards at both national and state or province level.

China’s forthcoming informational platform will ensure greater transparency in carbon trading by requiring more detailed reporting on companies’ GHG emissions. Companies that participate in carbon trading must submit a GHG emission report for the previous year to the Ministry of Ecology and Environment annually, and publish it for public oversight. China has also amended several regulations covering GHG calculation, auditing, and reporting obligations. One of the most impactful changes is a carbon trading mechanism that allows companies to exchange surplus allowances against their facilities’ emissions.

The Intergovernmental Panel on Climate Change reported that global warming will increase by more than 1.5°C this century unless we collectively cut greenhouse gases (GHG).

As climate change momentum grows, so will your list of requirements

Air emissions are on more regulatory radars than ever. The greatest shifts come from the EU, US, and Asia-Pacific — all pursuing climate neutrality within the next 30 to 60 years. As these regions lead with new requirements, your multinational company will face increasing pressure to meet them.

The time to prepare is now. Expanding your view of changing environmental policies — and building the flexibility to respond — is what separates companies that stay ahead from those that scramble to catch up.

Regulatory forecaster: key developments by region

The developments below were compiled by Enhesa’s EHS regulatory consultants in December 2021.

European Union

  • CountEmissions EU initiative — roadmap to establish a harmonized EU framework for calculating and reporting transport-related GHG emissions (19 November 2021)
  • Revision of Ambient Air Quality Directives — initiative to align EU air quality standards with WHO recommendations, potentially introducing stricter limits for nitrogen dioxide, sulfur dioxide, and carbon monoxide (23 September 2021)
  • Carbon border adjustment mechanism (CBAM) — proposal to prevent carbon leakage on imports of specific products; some requirements could apply from 1 January 2023, others from 1 September 2025 or 1 January 2026 (22 July 2021)
  • European Climate Law — companies emitting GHG may face stricter reduction measures to achieve EU climate neutrality by 2050 (29 July 2021)
  • Review of the Effort Sharing Regulation — proposal to increase the EU-wide emission reduction target from 30% to 40% by 2030 compared to 2005 levels (15 July 2021)
  • Review of the EU ETS — proposal to extend the ETS to buildings, maritime, and road transport sectors and accelerate the reduction of allowances (15 July 2021)

Finland

  • Building owners and developers would need to increase the share of renewable energy in new and renovated buildings (7 October 2021)

France

  • Companies in all sectors will need to comply with additional requirements introduced to fight climate change and raise consumer awareness. From 22 February 2022, companies placing products on the market must display the environmental impact of those products (5 October 2021)

Germany

  • Stricter GHG reductions came into force following the amendment of the Federal Climate Protection Act (31 August 2021)
  • Germany committed to reaching climate neutrality by 2045 — five years ahead of its original target (30 June 2021)

Spain

  • From 1 July 2022, companies must implement energy and environmental performance requirements for new office buildings (6 October 2021)

United Kingdom

  • New amendments to the Environment Bill proposed by the House of Lords, affecting Extended Producer Responsibility measures and resource efficiency requirements (10 September 2021)
  • Technical guidance published for companies complying with the Energy Performance of Buildings Regulations 2021 (3 August 2021)
  • Companies must comply with requirements under the CRC Energy Efficiency Scheme closure guidance, as published by the Environment Agency (3 June 2021)

Canada

  • Updates proposed to emissions reporting tables covering heat value by fuel type, emission factors, and default GHG emission factors for Canadian provinces and certain North American markets (4 October 2021)
  • Proposed regulations amending the Output-Based Pricing System under the Greenhouse Gas Pollution Pricing Act (16 July 2021)

United States

  • EPA issued a draft strategic plan to address climate change and advance environmental justice and equity (21 October 2021)
  • Companies must phase down their use of hydrofluorocarbons (HFC) and comply with recordkeeping and reporting requirements for HFC use, consumption, production, destruction, and transformation (15 October 2021)
  • The INVEST in America Act signaled future regulatory focus on energy efficiency, battery disposal and recycling, and persistent chemicals (PFAS) contamination (19 August 2021)
  • Companies in areas overburdened by pollution may see strengthened EPA enforcement of environmental statutes (14 July 2021)

Brazil

  • The National System of Air Quality Management (MonitorAr) and National Program Pure Air are now established in Brazil (7 September 2021)
  • New buildings may be required to install photovoltaic generation systems (12 August 2021)
  • Law proposal regulating the Brazilian Emissions Reduction Market approved by the Commission for Economic Development, Industry, Commerce, and Services (15 July 2021)

Chile

  • From 14 September 2023, companies importing generating sets into Chile must comply with emission standards including limits for particulate matter and carbon monoxide (27 September 2021)

Peru

  • Companies generating pollutant air emissions will soon need to report them to the Registry of Emissions and Transfers of Pollutants (3 August 2021)

China

  • Companies would not be permitted to newly establish or expand chemical production of five types of HFCs used for controlled purposes such as refrigerants and foaming agents (8 October 2021)
  • Companies generating trifluoromethane (HFC-23) as a byproduct of HCFC-22 or HFC production must not release it directly into the atmosphere (23 September 2021)
  • China ratified the Kigali Amendment to the Montreal Protocol, which took effect 15 September 2021

South Korea

  • Korea enacted the Framework Act on Carbon Neutral and Green Growth in Response to Climate Crisis (FACNGG), effective 25 March 2022 (13 October 2021)
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