CAP Regulatory Compliance & Reporting 3 — Questions and Answers
Question 1: Which provision in the Inflation Reduction Act (IRA) directly incentivizes industrial facilities to reduce GHG emissions through tax credits?
- Section 48C Advanced Energy Project Credit
- Section 45Q Carbon Oxide Sequestration Credit (Correct answer)
- Section 30C Alternative Fuel Vehicle Refueling Credit
- Section 179D Energy-Efficient Commercial Buildings Deduction
Correct answer: Section 45Q Carbon Oxide Sequestration Credit
Section 45Q provides tax credits per metric ton of qualified carbon oxide captured and sequestered or utilized.
Question 2: TCFD stands for Task Force on Climate-related Financial Disclosures. Which of its four disclosure pillars addresses how a company identifies and assesses climate-related risks?
- Governance
- Strategy
- Risk Management (Correct answer)
- Metrics and Targets
Correct answer: Risk Management
The Risk Management pillar describes processes companies use to identify, assess, and manage climate-related risks.
Question 3: A facility subject to 40 CFR Part 98 must submit its annual GHG report by what deadline?
- January 31 of the following year
- March 31 of the following year (Correct answer)
- June 30 of the following year
- September 30 of the following year
Correct answer: March 31 of the following year
EPA's Mandatory Reporting Rule requires covered facilities to submit annual reports by March 31 for the prior calendar year.
Question 4: Under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), which category of airlines must monitor and report emissions?
- All domestic airlines regardless of size
- International airlines operating routes between participating states (Correct answer)
- Charter airlines only
- Cargo airlines with fleets over 50 aircraft
Correct answer: International airlines operating routes between participating states
CORSIA applies to international airlines operating routes between states that have opted into the scheme, requiring emissions monitoring and offsetting.
Question 5: In the context of carbon markets, what does 'additionality' mean for an offset project?
- The project generates more offsets than originally projected
- Emission reductions would not have occurred without the carbon finance incentive (Correct answer)
- The project adds new technology to an existing facility
- Additional countries join a multilateral carbon trading agreement
Correct answer: Emission reductions would not have occurred without the carbon finance incentive
Additionality requires that the emission reductions are beyond what would have happened in a business-as-usual scenario without carbon credit revenue.
Question 6: Which ISO standard provides requirements for third-party verification of greenhouse gas assertions?
- ISO 14001
- ISO 14064-3 (Correct answer)
- ISO 14067
- ISO 50001
Correct answer: ISO 14064-3
ISO 14064-3 specifies principles and requirements for verifying GHG assertions, guiding third-party auditors.
Question 7: The Western Climate Initiative (WCI) links carbon markets between California and which other jurisdiction?
- British Columbia only
- Ontario and Quebec
- Quebec only (Correct answer)
- Quebec and Nova Scotia
Correct answer: Quebec only
California and Quebec operate linked cap-and-trade programs under the Western Climate Initiative framework.
CAP Regulatory Compliance & Reporting 3
Which provision in the Inflation Reduction Act (IRA) directly incentivizes industrial facilities to reduce GHG emissions through tax credits?