Greenhouse Gas Emissions and Energy Management for Manufacturing in Colorado (GEMM 1)

Overview

The Colorado Air Quality Control Commission adopted the Greenhouse Gas Emissions and Energy Management for Manufacturers in Colorado (GEMM 1) rule on Oct. 22, 2021. The rule took effect on Dec. 15, 2021, now known as 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 through an audit process that they are using Greenhouse Gas Best Available Emissions Control Technologies and Energy Best Management Practices.
• Achieve an additional 5% reduction in their greenhouse gas emissions.

Interested in a related rule to greenhouse gas emissions in Colorado? 

Learn more about the GEMM 2 rule.

Covered facilities

GEMM 1 rule requirements currently apply to four Colorado facilities:

1. EVRAZ Steel Mill in Pueblo.
2. Holcim-Portland Plant in Florence.
3. GCC Rio Grande in Pueblo.
4. Cemex Construction Materials South in Lyons.

Requirements and resources 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 Dec. 31, 2022 to the air division for review. Each plan was developed by a third-party auditor who met the division's auditor selection criteria. Audits must be done by a professional who does not work at the facility.

The audit plans must describe:

• The greenhouse gas emitting equipment that would be audited.
• The selected 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.

After the 2022 audits were completed, 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 Colorado Air Quality Control 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 on-site 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 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.