N.Y. Comp. Codes R. & Regs. Tit. 6 §§ 231-2.6

Current through Register Vol. 46, No. 50, December 11, 2024

Section 231-2.6 - Emission reduction credits (ercs)

This section represents the required provisions and criteria for certification, registration, and use of emission reductions as ERCs for all emission units (including those that are not subject to Part 201 of this Title), and for mobile sources and demand side management (DSM). Unless otherwise specified, the term ERC in this section refers to past reductions as defined in section 231-2.1 of this Subpart.

(a) Certification of emission reductions.

(1) Certification basis. Emission reductions must be certified as ERCs on an emission unit basis.

(2) Certification deadlines. Applicants are encouraged to apply for ERCs soon after the occurrence of the emission reductions, although there are no time restrictions for submittal of ERC applications. The department may deny ERCs if sufficient supporting documentation is not submitted as required by paragraph (5) of this subdivision.

(3) ERC creation mechanisms. ERCs may be created from past or future reductions resulting from facility shutdown, emission unit shutdown, curtailment, source reduction, over-control of emissions beyond an applicable limit or any other reduction mechanism acceptable to the department.

(4) Future reductions. Future reductions shall not be certified if they are not linked to a proposed major facility or proposed source project through enforceable permit conditions. Any certified future reduction shall become invalid if the applicant abandons the proposed major facility or proposed source project linked to the reduction prior to commencement of operation.

(5) Application for ERC certification. The applicant must submit an air permit application requesting a minor permit modification (as defined in Part 201 of this Title) for certification of an emission reduction. Such an application must include the following:

(i) a notarized letter indicating the name and title of the person authorized to act on the company's behalf for certification/transfer of ERCs. Subsequent to the permit modification, an ERC certificate will be issued to the authorized representative for the company;

(ii) a complete Emission Reduction Credit Quantification Form with supporting documentation establishing that the emission reduction is surplus, quantifiable, permanent and enforceable. The above-mentioned ERC criteria are described below:

(a) surplus. The applicant must ensure that the emission reduction for an emission unit is in excess of any reduction required by RACT or MACT or any other regulations applicable to the emission unit during the baseline period for the emission reduction. The determination of "surplus" is as follows:

(1) for an emission reduction which physically occurred prior to the State or Federal Register publication date proposing RACT or MACT requirements, the applicant is eligible for the full amount of the reduction. Otherwise, the applicant is eligible only for the lesser of the prior actual annual emissions or prior allowable annual emissions reflecting RACT or MACT emission limits;

(2) for a future reduction as defined in section 231-2.1 of this Subpart, if the date of certification of the ERC is prior to the State or Federal Register publication date proposing RACT or MACT requirements, then the applicant is eligible for the full amount of the reduction. Otherwise, the applicant is eligible only for the lesser of the prior actual annual emissions or prior allowable annual emissions reflecting RACT or MACT emission limits;

(b) quantifiable. The applicant must use a reliable basis for quantifying the reduction. Continuous emissions monitoring data, stack test data, emission statements, EPA's AP-42 data, fuel and solvent purchase records are acceptable bases for quantifying emission reductions;

(c) permanent. The applicant must ensure that all reductions are permanent as defined in section 231-2.1 of this Subpart; and

(d) enforceable. For any ERC to be enforceable, the permit modification establishing the ERC must be noticed in the Environmental Notice Bulletin and a local newspaper for a 30-day public comment period.

(6) Retention of ERCs by the department.

(i) For VOC or NO _x ERCs (except those meeting the criteria listed in subparagraph [ii] of this paragraph) generated from facility or emission unit shutdowns in a moderate or severe ozone nonattainment area, 25 percent of such ERCs shall be retained by the department and may be used in support of the New York SIP to demonstrate reasonable further progress towards attaining and maintaining the national ambient air quality standard for ozone.

(ii) An ERC is exempt from retention by the department provided it:

(a) is used at the same facility as part of a net emission increase determination of nonapplicability, an internal offset, or as an emission offset; or

(b) occurs at a nonmajor facility.

(7) Certification issuance. Upon approval of an ERC application, the department will issue ERC certification as follows:

(i) Reduction from an emission unit subject to Part 201 of this Title located at a facility subject to a State or title V permit (Subparts 201-5 and 201-6 of this Title). For such a reduction resulting from:

(a) over-control of emissions beyond an applicable limit;

(b) emission unit shutdown;

(c) curtailment; or

(d) source reduction.

A permit modification with federally enforceable special conditions representing the emission unit will be issued.

(ii) Reduction from the shutdown of an emission unit subject to Part 201 of this Title located at a facility subject to registration (Subpart 201-4 of this Title). Such a reduction shall be made federally enforceable if the applicant demonstrates to the satisfaction of the department that the emission unit has been physically removed or rendered inoperable.

(iii) Reduction from the shutdown of a facility subject to Part 201 of this Title. Such a reduction shall be made federally enforceable if the applicant surrenders the title V permit, State facility permit, or registration certificate as appropriate.

(iv) Reduction from an emission unit not subject to Part 201 of this Title. Such a reduction shall be made federally enforceable by requiring the applicant to submit a single source SIP revision for department and EPA approval. Upon such approvals, the department will issue a SIP revision approval letter along with appropriate enforceable conditions.

(v) Certificate issuance.

(a) For past reductions (see section 231-2.1 of this Subpart) listed in subparagraphs (i) through (iv) of this paragraph, a certificate establishing the amount of the ERCs for each nonattainment contaminant will be issued subsequent to the issuance of the permit modification or SIP revision approval letter, as appropriate.

(b) For future reductions (see section 231-2.1 of this Subpart), the permit for the emission unit creating the ERCs would be modified. No certificates will be issued for future reductions.

(vi) Certification date. The date of certification of an emission reduction as an ERC shall be the date of issuance of a certificate establishing the ERCs.

(8) Certification disapproval. If the department determines that the emission reduction cannot be certified, the applicant shall be notified in writing of the reasons for such determination.

(9) Issuance of certificates for ERCs which have been previously certified through permit modifications. A certificate establishing the amount of ERCs will be issued by the department to the owner of any available ERCs listed in the New York State ERC Registry.

(10) Mobile source and demand side management ERCs. Applications for mobile sources and demand side management ERCs will be approved by the department on a case-by-case basis upon submittal of acceptable protocols. A single source SIP revision must be submitted by the department to EPA for approval to make the ERC federally enforceable. A certificate establishing the amount of the ERCs will be issued along with the SIP revision approval letter.

(b) Registration. All certified emission reductions shall be entered into a listing of available ERCs (Registry) maintained by the department. This listing may be obtained from the department upon request.

(c) Transfer of ERCs. For transfer of ERCs, the authorized representatives of the transferor (seller) and transferee (buyer) companies shall sign and date the reverse side of the ERC certificate. Both signatures must be notarized. After completing the reverse side of the ERC certificate, the transferor shall send the certificate to the department (address provided on the certificate). Subsequent to the receipt of this certificate, the department will issue certificates to the transferor and transferee reflecting the transfer.

(d) Use of ERCs.

(1) An ERC may be used in a net emission increase determination or as an internal offset or an emission offset.

(2) An ERC may be used as an offset without time limit or restriction, within New York State or in another state in the ozone transport region if New York has established a reciprocal trading agreement with that state.

(3) An ERC shall be of the same class of nonattainment contaminant as the emission increase requiring ERCs. For example, only a particulate form of emission shall be used as an offset for new particulate emissions, only CO shall be used as an offset for new CO emissions, and so on.

(4) An ERC may include emission reductions from control or elimination of fugitive emissions, provided these emissions are contained in the New York State emissions inventory.

(5) An ERC may include incidental emission reductions which the department has not relied upon in issuing any permit under a federally approved SIP or delegated Federal regulation.

(6) An ERC, or portion thereof, which was used in a net emission increase determination of nonapplicability or as an internal offset or an emission offset shall not subsequently be used for demonstrating attainment with ambient air quality standards or reasonable further progress in a federally-approved SIP.

(7) An ERC, or portion thereof, which was used in a net emission increase determination of nonapplicability shall not subsequently be used for internal offset or emission offset purposes, but may be used in a subsequent net emission increase determination, if contemporaneous.

(8) An ERC, or portion thereof, which was used as an internal offset or an emission offset shall not be used again for any purpose.

(e) ERCs for replacement and relocation of emission sources.

(1) ERCs for the replacement of an emission source with new similar equipment (connected to the existing stack or a new stack) shall be quantified as follows:

(i) the difference between the lower of the prior actual annual emissions or prior allowable annual emissions of the emission unit representing the old emission source; and

(ii) the future potential of the emission unit representing the new emission source.

(2) The relocation of an emission source within the same facility would neither qualify for ERCs for the shutdown of the emission source nor be subject to this Subpart at the new location. However, such a relocation must comply with all other applicable Parts of this Title and result in acceptable air quality impacts pursuant to section 200.6 of this Title.

N.Y. Comp. Codes R. & Regs. Tit. 6 §§ 231-2.6