Carbon Accounting and EPA Reporting: What Every Company Must Know for 2026

The expansion of the Clean Air Act requires all U.S. companies to report air emissions to the EPA starting in 2026. With major changes, new deadlines, and stricter enforcement underway, businesses must prepare now—or risk violations, inquiries, and penalties.

• By Brad Franzen, George Sullivan
• August 25, 2025

Carbon Accounting Changed forever in 2022.  The Clean Air Act expanded to include ALL companies to report their Air Emissions to EPA in 2026.  Major Changes are continuing to accelerate on Emissions Air Reporting.   Is your company prepared for current reporting requirements due in March 2026?  Is your company reporting to a 3rd party framework?  What risks is your company taking with regard to EPA reporting that may create inquiries by the EPA about your emissions reporting?

In the first two quarters of 2025 EPA announced, Sunsetting Energy Star Portfilio Manager, and the US Environmentally Extended Input-Output model (USEEIO) used for Scope 3 Supply Chain or Value Chain Carbon Reporting.  Calafornia Air Resource Board (CARB) has issued their answers to Freaquently Asked Questions (FAQ’s) defining the size of a company footprint in Calafornia that will have to report their emissions to CARB in 2026. 

In the 3rd Quarter of 2025 EPA has started to issue Request for Information (RFI) to existing reporting companies that currently report their emissions to EPA but offer different emission numbers to 3rd Party frameworks such as i.e.: Corporate Greenhouse Gas Initiative (Corporate GHG), Science Based Target initiative (SBTi),  Global Real Estate Sustainablity Benchmark (GRESB), Carbon Disclosure Project (CDP), etc.. 

Are you Ready to Report your Emissions to the EPA between January 1, 2026 and March 31, 2026?

In 2022 Congress passed the Inflation Reduction Act (IRA) of 2022, included in the IRA is a section that requires the Environmental Protection Agency (EPA) to expand and enforce the Clean Air Act.  This expansion includes all companies, and pulls in industries that have not had to Measure, Calculate, and Report their Air Emissions previously to the EPA.  Industry examples are: Real Estate, software companies, social media companies, law firms, accounting firms, design firms, retail and internet retail companies, food and clothing manufactures, distribution and logistic companies, etc..

What do you know about emissions reporting?

No 3rd party reporting framework is recognized by regulatory bodies for emissions reporting.

Corporate Greenhouse Gas Protocol or Initiative now retitled a Standard (Self Proclaimed) also know as Corporate GHG or GHG is the largest of the 3rd party reporting frameworks in use by corporations.  Which allows the company to place or push their emissions into indirect emissions, and miscalculate the companies emissions.

Lets review two simple examples where Corporate GHG is incorrect:

1. Real Estate Investment Trust (REIT) owns an Office Building with multiple tenants, Corporate GHG allows the REIT to only calculate and report the emissions for the utility meters billed to the building (owned and or controlled), the tenant utility meters are not reported and listed as indirect or Scope 3 Emissions.  That is incorrect.  Regulatory Reporting for the office building requires the Building Owner or Manager to Report the entire emissions of the building which are common areas plus tenant utility meters, exterior lighting and or parking lighting. 

1. The same office building listed in 1) above supplies Hot Water and Chilled Water to the Tenants and common spaces in the building for heating and cooling allowing the tenants to control the space conditioning.

1. Scope 1 fixed fuel equipment (Natural Gas Fired in our example) Corporate GHG is missing 4 important Items: 1) Natural Gas Analysis (Methane is usually only 50.5% the remaining gas is made up of other flammable gases and fossel C02), 2) Equipment efficiency is missing Corporate GHG assumes 100% efficient equipment which is incorrect, 3) Flue Gas Analysis which provides two items, exact listing and quantity  of emissions, and natural gas burner efficiency, 4) All Fuels have a Carbon Intensity (CI) which is included in calculating the Fuels Carbon Emissions when used, Carbon Intensity is the extraction, processing/refining, transportation, and distribution losses on the way to the final customer in our case the office building.

1. Scope 2 Purchased Energy ALL purchased energy has transmission and distribution losses, Electricity has Line Losses.  Transmission and Distribution Losses as well as line losses are included in Scope 2 Emissions, Corporate GHG Assigns T&D, and Line Losses to Scope 3 which is incorrect.  Corporate GHG also looks at the United States Grid as one Electricity Grid that is wrong it is a set of small grids called e grids and CO2e is calculated based on the local grid or e grid.

1. Scope 3 Corporate GHG is full of measurements not reflecting EPA standards and indirect emissions that need to be included in a company’s carbon accounting,  US EPAs  CO2e/USD Spend is an estimate that is modeled using the EPAs Environmentally Extended Input-Output Model, which is no longer supported. 

With ALL Companies Required to Report their Emissions to EPA in 2026 you should be asking your supply chain about their Mandatory Reporting Requirements which are also due in 2026.  That information will give your company a great insight into how to handel your Scope 3 Emission Reporting which will be required reporting to EPA in 2028.

Reduction Claims, Carbon Neutrality, and Net Zero Emissions Claims.  Are your Claims Correct?

Reduction Claims – the most common mistakes we see in reduction claims are:

1. The Environmental Attribute (Renewable Energy Certificate or Credit, Renewable Index Number or Carbon Offset or Credit) being retired is not retired in the facilities name.

1. The Environmental Attribute is not traceable or traceable on a specific market or to a specific project, i.e. “from our retired stock of…” means the most a company could say is they are supporting that environmental attribute.  This is also referred to as the “secondary” or “voluntary” market and would not pass the test of regulatory scrutiny or attestation review.

1. Renewable Energy Certificates or Credits and Renewable Index Numbers or Biofuels have no Carbon Intensity or Carbon Score is incorrect.  They have a carbon footprint and are calculated for regulatory emissions reporting, tracking and tracing.

Carbon Neutrality and Net Zero Emissions

1. Both terms are universally applied in a “general or generic terms” and they are not:
1. Both terms break down into:
1. Operational which covers the annual emissions for the year.
1. US DOE issued a definition of Carbon Neutral Operations as an all-electric facility with no connection to any fossil fuels and using 100% renewable energy.
2. True Definitions of both terms also include the facilities and their build carbon emissions and land use changes and loss of the natural carbon sink that existed on the site of the facility.

With this overview do you feel that your current Carbon Accounting is correct?