If I understand you correctly, you have no problem using the all-caps string EMCON as an abbreviation of "Emissions Control," but rendering the spelled-out form as "EMisions CONtrol" to indicate where the letters in the abbreviation come from "doesn’t seem right" to you.
Let's suppose that you have other entries in your list that are true initialisms, so that EMCON appears in a setting like this:
EMAP Emergency Management of Artillery Projectiles
EMB Extrasensory Manipulable Bodies
EMCON EMissions CONtrol
EMDID Essential Medical Descriptive Identity Detail
EME Effective Mechanistic Extrusion
In that case, it seems to me, your colleague has a valid point in arguing that, by capitalizing the EM in EMissions and the CON in CONtrol, you are maintaining a consistent approach to the list, by using capital letters to identify each letter included in each abbreviation. Since you haven't indicated to readers that some of the "acronyms" in your list are true initialisms and others are amalgams of the first syllables or first few letters of constituent words, capitalizing the letters in the constituent words makes clear at once to readers what is going on in a particular abbreviation like EMCON.
The alternative, of course, is to render the abbreviation as (for example) EmCon and then to run it in the list as follows:
EMAP Emergency Management of Artillery Projectiles
EMB Extrasensory Manipulable Bodies
EmCon Emissions Control
EMDID Essential Medical Descriptive Identity Detail
EME Effective Mechanistic Extrusion
This treatment is consistent in capitalizing only the letters that are capitalized in the abbreviations, and it also clearly distinguishes between entries that are first-letters-only initialisms and entries that are first-syllables or first-few-letters abbreviations.
Both forms of the list that I present as block quotes above are consistent and, therefore, eminently reasonable approaches.
